The New Nation - Internet Edition

For business-friendly environment

THE business community of the country have demanded that the next elected government should provide social and political stability, improved law and order and strong policy matrix for steady growth of the national economy. Political stability is indispensable for a strong national economy. A stable government can ensure sustainable policy support for steady growth of the economy. They stressed that all stakeholders need to work jointly to ensure stability in all spheres of the society.

The business leaders asked political leaders to forget the past bitterness and work together. Reiterating their demand for a peaceful environment, they said that they did not want to go back to pre-1/11 situation characterised by chaos and confusion. They expressed their strong opposition to 'hartal' that cause serious harm to production in mills and factories. During the long period since independence the country could not achieve development at an expected pace. Lack of political stability and inconsistent development policies contributed to this.

Now, when the national economy is facing huge losses due to repeated natural calamities and political unrest, it is also faced with global economic meltdown. The World Bank, in its latest assessment, reportedly predicted a decrease in the GDP growth to 5.4 per cent from the projected rate of 6.5 per cent. An appropriate policy package under a sustainable democracy can help face the challenge of global economic shocks. The future of the country hinges on how the political leaders act. It is hoped that in view of the importance of their role, the leaders would rise to the occasion and work conscientiously to ensure sustained economic growth of the country.

Growth puts pressure on resources

AS revealed by a recent government-donor joint study, continued growth in Bangladesh has eventually put pressure on the country's resources like skilled manpower, land, electricity and finance preventing further expansion of the private sector. Despite enormous potentials to increase productivity, create more job opportunity and reduce poverty faster, growth of micro, small and medium level firms has now been hindered by poor allocation of resources. Constraints faced by the private sector and assessment of the competitiveness of firms in the country are the subjects of evaluation in the second report launched the other day.

The five major constraints to investment climate are shortage of electricity, political instability, lack of good governance, insufficient land and inadequate access to finance. The report discusses how a more enabling business environment would promote stronger and faster economic development. Bangladesh's gross domestic product has grown at a rate of only around six per cent annually in the past five years. The report was prepared by the Board of Investment along with the World Bank, Bangladesh Investment Climate Fund, South Asia Enterprise Development Facility and UK's Department for International Development.

For continued growth and prosperity, Bangladesh would have to focus on issues such as adequate electricity supply, flexible financial services for new, small and medium firms, greater access to services, land and building, better-matched labour skills. Frequent power outages that rob the country of an estimated 2 percentage points of national growth, cause particular concern to all involved in industry and business. The report indicates that public-private partnership for generation and distribution of power will lead to faster economic growth. Further, to sustain growth, foreign direct investment and export competitiveness need obviously to be stimulated for industrial development and expansion.

Be aware of ill motivated prediction

Dr. M. S. Haq

Predictions about things are not realities unless turns of events and other developments in pertinent areas are successful in converting those predictions into realities - relative to time, space and other variables, though. The World Bank (the WB or WB or the bank) reportedly predicted on 27th day of November 2008: a shockwave of global meltdown might hit Bangladesh in 03 months. The Bank - based on its calculations, estimations, assumptions, approximations and other things - projected that the country's GDP growth in the current fiscal year might come down to 4.8 percent from the planned figure - - that is, 6.5 percent for the year mentioned.

One of the motives of WB behind sharing - at this point in time, the GDP related projection with people of Bangladesh and others, in particular the next government, at present, in a virtual sense, though - is not only to alert in advance Bangladeshis and others regarding possible impacts of the global recession on the economy of Bangladesh but to assist them, in a proactive, reactive and result-oriented manner, in meeting challenges and harnessing opportunities that might arise out of for example, the scenario predicted by it, I mean the bank.

The army supported government rejected the above projection on a number of grounds such as: one, the present day macro-economic health of the country; and two, the estimated tensile strength (used in an engineering sense) of economy to withstand the thrust of global meltdown during the remaining period of fiscal year. It may be fine in certain ways. But one of the questions here - is: why is Bangladesh apparently afraid of considering the bank's analysis and prediction as additional resources (used in a wider sense) in pursuits of developing somewhat pessimistic (against the backdrop of say, present day favorable situation!) but possible scenarios in the midst of existing optimistic scenarios in relevant areas?

I believe the bank's projection should not be rejected outright on account of number of reasons. A few of them have been presented below.

1. The limitations associated with knowledge, understanding and application - in areas say, capturing at least a 100 percent short term future at any time - have been hindering efforts of world people and world governments including other institutions towards meeting challenges of survival, continuity and progress in the universe and towards harnessing relevant opportunities, all in a more effective and efficient manner than that at present. Further, the inability, so far, on the part of economics - to put a prominent scientific face on it - has inter alia been instrumental in 'forcing' people, governments and others to continue their dependence, at the going rate, on the development and the use of economic scenarios as inter alia tools for: exploring, identifying and understanding critical paths to say, economic goals; and for creating course correction opportunities in the course of achieving those goals in the best possible manner, at the best possible cost and to the satisfaction of all concerned - as far as practicable.

The bottom line is: Bangladesh should consider the WB projection as building blocks (for example) for probable alternative scenarios in pertinent areas - simply because the army-supported government is not - at this point in time - in a position to offer a 100 percent guarantee to people of Bangladesh and others on the outcome of its GDP related stances.

2. The time of announcement of WB prediction, the reported content of WB prediction and the base period of WB prediction are inter alia and as appropriate found to be: relevant; proper; and critical to the health of country's economy in the near future. A few examples in that respect have been presented below.

(a) the bank has attempted to fulfill, in a timely manner, its accountability to people of Bangladesh (including inter alia politicians) and others by sharing with them the bank's concern, as well as prediction about the country's economy in the near future - against the backdrop of say, the global recession;

(b) the base period of WB prediction could witness the departure of army-supported government and the arrival of people-elected government - provided that the transfer of power takes place within that period. A crucial period for Bangladesh economy to catch viral infections;

(c) the WB prediction is supposedly equipped with say, stabilization measures for meeting instabilities during the base period that could see the change of government, as mentioned above;

(d) the base period could see the impact of recession on Bangladesh in a clearer manner than that at present - positive or negative or otherwise. A windfall from the development could help make decision-making in pertinent areas timely and easier than that at present; and

(e) the prediction could, as appropriate, be instrumental in shaping the country's contingency plan - in pertinent areas - during the base period.

3. The prediction could act, in certain ways, as an antidote to credit and blame games during the initial period of elected government, if that comes into force during the base period, for example.

4. The prediction could be used in the assessment of risks and vulnerabilities associated with GDP related stances of the army-supported government.

5. The achievement of economic outcome by Bangladesh as per its prediction - after say, the expiry of fiscal year could, in pertinent areas, improve further - than that at present - the credibility of Bangladesh, army-supported government of Bangladesh and concerned others before other world countries and donor organizations including inter alia the WB. A windfall from the development could help create additional opportunities for Bangladesh in areas say, economic diplomacy. On the other hand, the credibility of WB could, in pertinent areas, improve further - than that at present - in the event of WB prediction becomes a reality after say, the expiry of fiscal year.

It will not be out of place to mention here the outcome could bring about a win-win situation, in part, for all concerned. In any event, it is expected inter alia the assessment of economic performance covering the fiscal year will be conducted in an honest, professional and acceptable manner.

In light of above, at least one thing has become clear: reforms in the domain of forecasting should be pursued in an aggressive, result-oriented and sustainable manner so that the number of unknown and uncontrollable variables in pertinent areas could be reduced to an acceptable level, resulting hopefully in a continually incremental improvement of quantity and quality of prediction through the foreseeable future. I believe an 'accurate' or a near 'accurate' forecasting and its productive (= effective + efficient) implementation could help: minimize wastage; ensure maximum utilization of scarce resources; and reduce the gap between objectives and outcomes of for example, development projects and programs including those aiming at the poor.

In that respect, I also believe factors such as: a breakthrough in mathematics of forecasting; an improved capturing, circulation, retention and use of meaningful, as well as useful data, information and statistics throughout the world; and a proper and result-oriented management of data having exponential magnitudes with the help of say, upcoming quantum computers; could inter alia be instrumental in ensuring quantitative, qualitative and other improvements in areas of forecasting. One of the concerns here is: the domain of forecasting is not at present immune to threats, risks and vulnerabilities emanating from say, politics, diplomacy, terrorism and competition at relevant conceptual, operation and other levels, and antidotes available to cope with existing and evolving challenges associated with forecasting are, in an average sense, meager and deficient in the per capita affordability.

The last word: no person or entity or both should be allowed to blackmail - in a conscious and deliberate manner - Bangladeshis and others on any matter including the one pertaining to GDP projections. An ill motivated GDP related prediction could be devastating for Bangladesh and in particular, for poor people of Bangladesh at the time when a global meltdown has already started and the country is passing through one of the critical hours of its history - all against the backdrop of a progressively re-integrating and increasingly interdependent universe.

The outcome of predictions made respectively by the WB and the army-supported government could trigger inter alia the need for a quick and result-oriented BMR (balancing, modernization and rehabilitation) exercise at relevant levels of the government and the WB, as appropriate. But I believe the BMR exercise in pertinent areas of forecasting should be a continuous activity.

Let us cultivate forecasting skills at individual, collective and other levels. Let us stop making forecasting a continuous victim of pollution, among other things. Let us work towards improving anti-poverty competitiveness of self and society through more realistic and more implementation potential-laden forecasting than that at present. May Almighty God bless all His creatures and their good endeavors!

The politics of big capital

Dr Rahul Pandey

On the 5th of November I was in Khandwa, a town in central India, taking part in a rally organized by the Narmada Bachao Andolan (NBA), or Save the Narmada Movement. About 20,000 rural people, mostly landless farm labourers or small-medium farmers, many of them tribals, had traveled 50 to 400 km on tractors, trucks and buses to participate in the rally, all at their own expense. Every family carried a packet of food cooked at home to last for a day or two. The women with babies carried them along as well.

The day long rally and mass gathering looked like a sea of people - women in colourful saris and men in white dhoti-kurta - united by common peril and anger. The peril of them and their children becoming pauperized. The anger at being taken for a ride. These people represented more than 100,000 families, or over half a million citizens, who have been displaced because their original villages and lands are either submerged or about to be submerged by the reservoirs of six big dams built on the river Narmada. The dams are Indira Sagar, Onkareshwar, Maheshwar, Maan, Upper Veda, and Bargi. The people in the rally narrated their woes and demanded land for the lost land that is guaranteed by the government's own resettlement and rehabilitation (R&R) policy but denied to them.

The experience of these people from the Narmada valley is the story of how the poor always get a raw deal by the politics of the market driven economic paradigm. It is the story of how inequality and poverty are reinforced by the current system. Broad contours of this story are the same all over the globe wherever the profit and growth objectives of big money come in conflict with the basic livelihood rights of the economically weak - landless labourers, small farmers and artisans in villages, tribals in forests, fishing communities in coastal regions, and city based vendors and workers living in slums and other low income areas.

Here is what has happened to the people in the Narmada valley. Some time back a team of five persons from academic institutes, including myself, carried out an independent survey of 429 families displaced due to Indira Sagar dam, to understand how their living conditions have changed after displacement. At the time of the survey these families had been already displaced for 3-5 years and living either privately or on government resettlement sites. We visited eleven such sites. Most of resettlement sites lacked basic amenities like access to markets and employment opportunities, proximity to affordable and cultivable land, trees, clean water, grazing land for cattle, and drainage.

Although no family received any land as mandated by the R&R policy, the government provided them some cash compensation against the fixed property lost in submergence. This compensation was grossly insufficient to help families make productive investments. We did not find a single family that could rebuild its lost livelihood even after 3-5 years of displacement. Most farmers lost substantial farmland to submergence but could purchase at best a small fraction as the cash compensation for land was much below the market rate. Small farmers became either landless labourers or more dependent on farm labour work to supplement insufficient income from farming. The landless farm labourers were pushed further to the brink of precarious survival. Their income fell sharply and became more uncertain as both farm labour demand and wage rates were squeezed in the areas in the vicinity of submergence.

As economic hardship deepened and common grazing land was no longer available, almost all families were forced to sell all or part of their cattle. Several children were withdrawn from schools. Health problems like physical illness and psychological depression had increased. With earning opportunities shrinking locally, seasonal migrations had become common and some families were contemplating longer-term migration. The irony was that people were not sure which would be a good place to migrate and whether their economic condition would improve after that. In retrospect, almost everyone we met felt they should have been given land for land.

When people, whose main skill base is in agriculture and local resources, are suddenly uprooted, there are only two ways to rebuild lost livelihoods. Either they get back good quality agricultural assets (i.e. cultivable lands along with support systems) and other natural resources which they can harness with the skill and knowledge they already possess. Or they are provided with alternate productive assets with potentially attractive markets and granted sufficient material support and cushion of time to acquire new skill base required to operate new assets economically, source new inputs, market new outputs, and begin lives afresh.

The people who came for the NBA rally were the ones for whom sparing a day from farm work and traveling up to Khandwa was not easily affordable. But they came because they are convinced that the only hope to gain their right is to come together and make their voices heard. They also have faith in NBA activists like Chittaroopa Palit, Alok Agarwal and others who have stood behind them like a rock and have patiently pursued countless court cases on their behalf.

Though justice has been repeatedly repudiated, persistent struggle has also brought some successes like the recent High Court judgment that land for land with a minimum of 2 hectare be allotted to each displaced family. However, the State Government, as always, wants to reject this demand and has challenged it in the Supreme Court. So yet another tiresome phase of court hearings lies ahead. Every flicker of hope has been followed by long spell of despair. The disciplined march and gathering of 20,000 people, all carrying in their heart such memories of years of frustration and struggle, yet displaying remarkable resolve and calmness, resonated in such a way that it felt like emanating spiritual energy of 20,000 individuals meditating together.

A friend of mine who was shocked at listening to this story, asked, "How could the Government subject half a million citizens to such cruelty?" The answer is: our political structures are not democratic enough to empower the ordinary people. On the contrary, such people are constantly denied their right to livelihood when they come in the way of commercial projects that demand large scale acquisition of land, water, minerals, forests and other natural resources. The state has almost always sided with the big business. This is how the free capital driven markets work. They strip the poor of whatever capital they have and pass it to those who are already overloaded with it. In case of Narmada dams, for instance, the State Government has granted several concessions to the corporations owning the dams. As for the displaced families, it says there is no land available in the state. At the same time it has doled out more than 100,000 acres for biodiesel crop plantations and thousands of acres for industrial parks and special economic zones.

Interestingly, the GDP of the nation may often rise in the process as most of lost wealth of the poor was not accounted in the formal markets whereas most of new wealth acquired by the rich is. Hence the process of pauperization of the poor does not raise hackles of those policy makers, economists and intellectuals who are worried mainly about economic growth and capital investments. It also does not bother many politicians as their funds come from supporting the rich and votes from dividing the vulnerable poor. Thus the poor like those living in the Narmada valley remain perpetually caught in a recessionary spiral. The recent global financial recession is no news to them.

So, what can be done when years of chasing court cases and appealing to the governments have not yielded much? The only non-violent way is for the people to reorganize with greater vigour and numbers and make the system accountable. The people's movements like the NBA do not oppose industrialization. They oppose the process that unilaterally takes away resources from the displaced communities and makes their living conditions worse, and channels most of the benefits of industrial projects to the affluent. As an alternative, they demand a much more democratic way of deciding who will give up what resources, how the displaced will be rehabilitated, and how the benefits of projects will be shared.