YPF Talking Policies with Dr. Akhtar Mahmood: Episode 3

"Past shapes the present and that shapes the future. They are linked in a chain." - Professor Nurul Islam

The third episode of Youth Policy Forum's flagship series "Talking Policies with Dr. Akhtar Mahmood" is a journey through history that explores economics, politics, and policies through the eyes of Professor Nurul Islam, Deputy Chairman of the First Planning Commission of Bangladesh. The session titled "The Quest for an Egalitarian Bangladesh" aired on June 13, 2020, and has been viewed over 6200 times since.

On the Importance of Learning 'Economic History' and 'History of Economic Thought'

Professor Nurul Islam was one of the three South Asian students during his time at Harvard. Back then Economic History, History of Economic Thought, and Econometrics were compulsory subjects, which unfortunately is not the case anymore. 

"You can't understand the present of economics without knowing its past," he said. Economic thought has evolved over time, and by understanding this evolution, the theories become easier to comprehend. Economics in universities these days is centered around mathematics and doesn't focus much on exploring the link between economics, societal evolution, and social policy change. This creates a vacuum that students later have to fill when they start working.

To illustrate the necessity of learning economic history, Professor Islam quoted his teacher, Alexander Gerschenkron - "How will you understand history today if you don't understand how countries like Russia and Japan developed - the forces that drove them, the lessons we must learn from them?"

On the Theory of Two Economies

The Harvard Advisory Service, consisting mainly of Americans, used to advise the Pakistan Planning Commission. "The Americans were a very influential force," remarked Professor Islam.

The advisory committee noted the uniqueness of Pakistan in that it was divided into two parts by 1100 miles. It was not at all feasible for the people of East Pakistan to spend twice their average income to travel to West Pakistan and access economic opportunities. This gave rise to the theory of two economies. Under this approach, the economies of West and East Pakistan would be independent of each other. Hence, they would have to be treated as two countries.

"We told the government to formulate different plans for East and West Pakistan or to empower local administration through decentralization," Professor Islam recalled.

There were multiple discussions surrounding this proposal, but it was met with constant opposition from the politicians. The government ultimately paid no heed to the proposal.

On the Dialogue with General Ayub Khan

In 1960, Professor Islam received an invitation along with two other economists to discuss the differences between the East and the West with General Ayub Khan. During the meeting, the General questioned them about the unrest and asked to draft a memorandum explaining their stance. The memorandum addressed two key issues - the two-economy approach and mobility. The economists recommended that Ayub Khan increase his visits to the East as it was lagging behind, or that he let the provinces act independently through decentralization.  When this memorandum was presented to the planning commission, the economists were labeled as "separatists", and that concluded their dialogue with Ayub Khan.

During his time in the Price Commission, Professor Islam proposed maintaining different price indices for East and West Pakistan to combat rising inflation. This proposal was also disregarded.

On Removing the Disparity between the East and the West

Ayub Khan displayed an interest in removing the disparity between the two parts of Pakistan since it was a political problem. The Bangali members in his committee were in agreement.

The issue on hand for the commission was how to distribute the central resources among the East and the West, for which Professor Islam and his team determined a simple solution - to reduce disparity, 56% of resource allocation should be weighted by the disparity in income. D. K. Power, a British Civil Servant and ICSI officer, was the first to agree with this idea, and he encouraged them to fight for its implementation.

According to Professor Islam, "There were two economic reports - one for East Pakistan, and another for West Pakistan. But the report for East Pakistan was ultimately rejected."

In 1962, Ayub Khan declared the reduction of disparity between East and West Pakistan in the shortest period of time as one of the objectives of the government. He formed a second finance commission in 1963 and asked them to once again propose solutions. The commission maintained that the situation was unchanged and so the debate continued till 1970.

"It was clear that they did not attempt to actually reduce the disparity because that would diminish their power," Professor Islam observed.

The disparity continued to grow as West Pakistan kept funneling resources from the East to maintain the British Indian Army and to amplify their growth.

"Although they were aware that this inequality could not be sustained, those in power believed that any rebellion by the Bangalis could be easily subdued," remarked Dr. Islam.

On the Six Point Movement and Its Background

When asked about the six-point movement, Professor Islam stated, "To understand the six-point movement, you first need to understand its background - the 21 points."

The 21 point was the manifesto of the United Front in the 1954 election. In 1940, the first resolution of Pakistan happened under Mohammad Ali Jinnah. They proposed that Muslim majority areas in the East and the West of India will constitute autonomous sovereign states.  This was detailed in a 21 point manifesto. The manifesto posited that the central government would consist of defense, foreign affairs and currency, and the rest would be under the two provinces including revenue. It further stated that East Pakistan would be self-sufficient and would have armor factories to defend themselves, and the Ansar forces should be converted to an independent army to defend themselves.

"The idea of autonomous sovereign state creation was being discussed in 1954 which was extraordinary and revolutionary," said Professor Islam.

The six-points were formulated after eliminating the radical clauses from the 21 points, and stated that while the central govt will have defence, foreign ministry and currency along with revenue, East Pakistan will have a paramilitary force like a national guard. This was a tactical move.

Ayub Khan promised that he would meet the 6 points with the force of arms, and in a massive repression of the Awami League, he kept his word and put all politicians, including Bangabandhu, behind bars.

On Research and the Willingness to Sacrifice

At that time, Professor Islam moved to Karachi and began developing the Pakistan Institute of Development Economics (PIDE). PIDE was an independent institution, and Professor Islam maintained that any political interference in his research would be met by his resignation.

"To ensure my protection, I used to create a Foreign Advisory Committee every year at PIDE," he said.

The Pakistan government failed to see the potential of this organization, and so refrained from interfering. Professor Islam, together with a Norwegian economist, published a report detailing the per capita disparity between East and West Pakistan. The report quickly gained traction and caught the attention of the Pakistani government, but with foreign advisors watching, there wasn't much they could do.

Professor Islam believes that researchers need protection and willingness to sacrifice. "My salary in Karachi was four times my salary in Dhaka. But had they interfered with my work, I would have left and not looked back," he said.

When asked by Dr. Mahmood if he felt that this willingness to sacrifice had diminished over time, Professor Islam offered a solemn smile.

"The price of honesty is heftier now. For me, being honest meant giving up my rickshaw fare. But today you stand to lose your home, your car, your children's school fees," he remarked.

On Bangabandhu and Socialism

When the topic of socialism came up, Professor Islam mentioned that people have wrong ideas about the social system Bangabandhu wanted. "Bangabandhu's socialism had no link with Leninism, Marxism, or any other theoretical ideology. His main concern was to provide basic needs for the poor," said Professor Islam.

On Bakshal

Although Professor Islam has no direct links to Bakshal, Dr. Mahmod sought his commentary on the topic.

Professor Islam stated that the idea behind Bakshal was to overcome the difficulties arising from a failed bureaucracy. He believes that some aspects of Bakshal would have been changed through trial and error.

Before Professor Islam left the country in 1975, Bangabandhu said to him, "I have started a journey through a forest with a jeep. The forest is really dark and it is raining heavily. I hope I reach the other side and see the sunshine."

Professor Islam believes that there were a lot of speculations surrounding Bakshal because people didn't think deeply about it. He encouraged the members of YPF to analyze Bangabandhu's speeches on Bakshal.

On Negotiation, Diplomacy and Foreign Support

Professor Islam states that the public too needs to be credited for the support received from India in 1971. The people involved took to forums and explained the cause of Bangladesh, garnering public empathy.

"When a small country is facing a big power, it has to be thrice as smart as the bigger power. And it has to fight with excellence." - Professor Nurul Islam

Dr. Mahmood remarked that a successful negotiation is dependent on taking the necessary precautions, research, and consultation with relevant experts.

On Bureaucracy and Bureaucrats

When Dr. Mahmood said bureaucrats should be independent, Professor Islam disagreed. He opined that bureaucrats cannot be independent because the government is run by politicians. The bureaucrats can neither be independent of the politicians, nor can they be political agents. So it is a difficult balancing act. Bureaucrats should act as advisors to politicians, however without a political agenda.

Professor Islam concluded the session with good wishes for YPF and the hope that YPF members continue their pursuit of knowledge and history.

Information collected by: Anika Bushra, Core Team Member, YPF