Economic emancipation still elusive

Bangladesh was born out of a war for freedom, democracy, social justice, self reliance and economic emancipation, what Andre Malraux once called "the last noble cause." After achieving independence and sovereignty in 1971, the densely populated nation has swung between hope and despair, between mass apathy and violence in the streets.
Growth oriented development economic models, which create both the gross and net happiness for the elites, are yet to bring genuine and lasting happiness for the broad majority. It is necessary to formulate a self-reliant social development model for our country, whose people are striving for political, economic and social emancipation. Self-reliant development must be measured and indicated on the basis of social proficiency and happiness, not only on economic efficiency and productivity.
Bangladesh was a prosperous region of South Asia until modern times. It had the advantages of a mild, almost tropical climate, fertile soil, ample water, and an abundance of fish, wildlife, and fruit, allowing a high standard of living compared with other parts of South Asia. Independent Bangladesh, from the beginning, has been regarded as a test case for development by economists, policymakers, and programme administrators of donor countries and international financial institutions.
In 1971, Bangladesh had 75 million people and its per capita annual income was $100. In four decades, its population has increased to around 150 million and per capita income to $644. Since 1991, its average annual growth rate has improved at the rate to 4.4%, compared to the 5.1% average of all South Asian countries for the same period. Bangladesh was a self-reliant country in the past in the sense that it depended entirely on the efforts of its own people, but the introduction of the Green Revolution in the 1960s caused a sharp change in its self-reliant stance. It led to dependence on outside aid, which is a well-known phenomenon that slows down the journey towards sustainability.
Development plans which depend on substantial foreign aid may do much damage to the spirit of self-respect and self-reliance of the people. Even in the narrowest economic terms, or in academic sense, the loss is greater than the gains. Resources, particularly money, are not value-free. Aid may not be available in the future, and has significant disadvantages that outweigh the advantages. Carmen (1996) notes that development aid is tied to the power of money, and the power of money is identified with the right to intervene. Such interventions generally impact negatively on traditional systems in a society, causing a breakdown of its integrity.
Bangladesh's dependence on foreign aid can be traced to the compulsions of a war ravaged economy of 1971, but what initially began as a necessity for the rehabilitation of 10 million refugees displaced by the nine months of war, soon became a pattern of dependent development. It seemed a convenient and easy option in place mobilising domestic resources and improving the yield of dying investments. Bangladesh receives various aids, grants and loans in the form of food aid, commodity aid and project aid. An empirical study (Rehman Sobhan, Iftekharuzzaman and Rumana S. Khan) revealed the following:
- A new elite class has emerged in Bangladesh whose affluence derives from such aid programmes, so much so that the percentage of businessmen and industrialists among the legislators has increased from 4% in 1954 to 24% in 1973, 59% in 1991-92 and around 70% in 2008-09;
- Bangladesh's human rights record, defense expenditure and other internal developments, all remain under the observations of the donor countries;
- Privatisation and disinvestment of the public sector enterprises have grown due to foreign aid, but at the cost of lack of sustained industrial growth. It is estimated that a significant percentage of aid went to the donors in the form of costs of procurement of projects inputs and consultancy fees to foreign experts;
- Aid leads inevitably to a heavy debt burden that future generations of Bangladeshis will have to pay one day or the other. Aid dependence may erode the sovereign power of any country in the economic realm. The massive amount of borrowed (about $28 billion from 1971-June 2012) has imposed a serious financial burden on future generations of Bangladeshis. The high loan burden has substantially curtailed the country's development spending;
- Heavy dependence on external resources for public expenditure has had an impact on the domestic economy. Domestic savings as a percentage of the GDP have fallen, and this declining rate of saving is in turn reflected in the low rate of gross investments. This could explain the lack of dynamism in the economy.
Self-reliant sustainability and economic emancipation involve a simple lifestyle with enough for basic needs. Self-reliant living is a viable means of caring for nature and other human beings, hence achieving sustainability.
Grassroots people should be encouraged to realise that they are the key agents to a better future; that the best route to sustainable development is one where development is managed by the people themselves; that their work will be strengthened and much more successful through unity and solidarity; and that they should form local self-help groups in order to initiate income generating activities.
Against the backdrop of high loan interest and a very low number of registered taxpayers, the National Board of Revenue (NBR) may move to generate tax money from potential taxpayers to help the government out of the credit trap; urge people to pay their taxes spontaneously; create a client-friendly tax administration; and narrow the gap between the taxpayer and the collector by changing their mindset. All these should help to transform the economy from credit dependence to self-reliance, to ensure economic emancipation of the mass people.

The writer is a former Secretary and a former Chairman, National Board of Revenue.
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