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Perspectives
Extending impractical and unfair advice
Enayet Rasul
7/29/2006
 

          Country directors of important multilateral donor organisations such as the WB and the ADB are important figures in the host countries where they are posted. What they say or their views are taken seriously by the officials and policy planners of the host countries. But elevated positions also entail high responsibilities. The country representatives of these organisations are expected to be caring about making remarks or observations because these are not seen as ordinary ones but considered as having much significance with potential to profoundly affect governmental policies. Thus, they are duly expected to make these remarks-- which are nothing short of policy statements -- after weighing carefully all the consequences of the same for the host countries.
Therefore, it caused quite a stir when the country director of the World Bank for Bangladesh advised our government recently to start pursuing a policy of integrating with the Indian economy. Justifying her recommendation, she drew attention to the undivided economy of the Indian subcontinent prior to its partition in 1947 . Before 1947 and the creation of erstwhile East Pakistan, the predecessor entity of today's Bangladesh, the economy of Bangladesh was part of the larger Indian economy and functioned well, according to the WB country director. In her view, salvation for the much burdened Bangladesh economy , at present, involves walking backwards and establishing the same kind of economic linkages that existed between the territories of Bangladesh with that of India before the 1947 partition.
What a preposterous suggestion from the luminary of the donor community who is supposed to have the best interests of the recipient country in her mind . She should indeed know better. There could not be a worse distortion of truth that the Bangladesh economy was operating well in the time, before 1947, as part of an all-Indian entity. The reality was that there was hardly any urbanisation worth the name in Bangladesh in that period. Bangladesh had an almost hundred per cent rural existence. Not even the rudiments of industrialisation were noted here at that time. Bangladeshis before 1947 were preponderantly poor with no better economic status than hewers of wood and carriers of waters. They were dominated by a section of affluent Hindu elites. The natural resources found in the territories of Bangladesh were sold at throwaway prices that led to no significant returns for their Bangladeshi producers. No attempt was made in that period to set up industries in Bangladesh such as jute industries to add value to natural products and create local employment, local earnings
and wealth for the local population. Bangladesh was exploited in a colonial manner or as a hinterland for the manufacturing activities of neighbouring West Bengal which is today a part of India.
But this picture changed very remarkably after 1947 when Bangladesh got delinked from India. Under Pakistan, a great deal of economic growth and transformation were noted in the territories that form Bangladesh today. When there was not a single jute mill in existence in Bangladesh before 1947 though it produced the greatest quantities of jute in the world and also the finest, 77 jute mills were established in quick succession in this region after 1947. Similarly, other industrial enterprises such as textile mills, sugar mills and industries to produce basic goods were also set up in vast number in former East Pakistan or today's Bangladesh. Industrialisation, urbanization progressed rapidly here after 1974 and significant expansion of the utility services and road networks were seen. All of these positive economic advances and more have only picked up greater speed after the creation of Bangladesh which only disprove the WB country director's wishful theory that economic progress of Bangladesh was better when its economy was linked to India and so we should try and turn the clock back.
Of course, the economies of all the countries of the South Asian region including that of Bangladesh can benefit a great deal from planned attempts to increase mutual trade and investments. Bangladesh is not adverse to such a move. In fact, it has been the pioneer of a regional organization to this end. But it is common knowledge in Bangladesh that this regional organization, SAARC, is failing to become truly an engine of economic growth like ASEAN in south-east Asia because the biggest entity in SAARC, India, is still not ready and willing to exchange genuine give and take with its neighbours for the collective economic gains of all. SAARC can increase manifold the economic benefits of all its members. Indeed, it can satisfy the economic aspirations of all its members, fully, including that of India. But India wants parochial developments in SAARC unlike in ASEAN or EC, to reserve the greater benefits arising out of the regional economic platform for itself. Thus, accelerating economic growth of Bangladesh involves not its integration with the Indian economy but protection of is vital economic interests in the face of a giant neighbour which is not willing to practice economic live and let live.
The country director of the ADB in Dhaka also drew attention last week for her comment that Bangladesh did not act wisely by allowing acceptance of Tata's investment offer to be postponed on political grounds. She underlined in her statement that Bangladesh should have accepted the offer for its own good in the economic sense. Like the WB country director, she too, is all for integrating the Bangladesh economy with the Indian one. Now, the question that cannot help but arise is : are we all fools in this country, including our government, and that we have no capacity to be able to distinguish between what constitutes good for our country from the bad ? Bangladesh government subjected Tata's investment proposal through an elaborate evaluation mechanism staffed by experts. Only after scrutinising the investment proposal thoroughly and finding the shortcomings in it from the perspective of the vital national economic interests, the government of Bangladesh deemed it fit not to accept it in its present form. Nothing but the economic interests of the country were taken into consideration while evaluating the merits of this proposal. Why then Bangladesh should now be so inaccurately blamed that it looked at an essentially foreign investment proposal through a political lens ? Is Bangladesh obligated to accept a foreign investment proposal even when it is expertly examined and found to be seriously deficient in protecting the economic interests of the country ?
Clearly, the country directors who are referred to here, seem to be not doing their job with true professionalism. They are sounding and acting more like the public relation officers of vested interests. Besides, their observations also reflect what poor knowledge they have of the economic or developmental history of the country where they are serving.

 

 
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