“If every politician aspires to become a businessman, the consequence is the degeneration of party organisation.”
Prof Rehman Sobhan
Influential business houses and groups are exerting their influence in order to make rules favourable to them, said a number of economists yesterday.
An example of such influence is visible through the retaining of the taka overvalued for a long time to support importers, the focus on the import of liquefied natural gas (LNG) instead of exploring gas resources locally, the electricity purchase through quick rental power plants, and various other regulations.
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The issues came at a discussion at the 6th Sanem Annual Economists Conference at the Brac Centre Inn organised by the South Asian Network on Economic Modeling (Sanem).
At the discussion styled “Regulation has become a source of capital accumulation,” Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD), said since independence, capital accumulation has taken place in Bangladesh through the grabbing of abandoned properties, foreign-aided projects, the defaulting on loans taken from specialised banks in the 1980s, and the manipulation of stock markets.
“Now, we see capital accumulation by inflating the cost of the state’s projects.”
Even after that, the noted economist pointed out, elites are not serving their own interest. As a result, an authoritarian system has emerged in the absence of democratic accountability.
Debapriya said the relative autonomy of the state has eroded because of such practices. And now, external agents such as the International Monetary Fund and the World Bank had imposed the conditions that economists had been advocating for the last five years.
“We are becoming vulnerable to external agents in the absence of relative autonomy of the state.”
The present political system is also not aligned with the vision of becoming a developmental state, said Debapriya.
“The allocation for healthcare is far below the allocation for mega projects,” he said, citing an example.
CPD Chairman Prof Rehman Sobhan said while many businesspersons were joining politics, many politicians also saw politics as an entry point to business.
“Such a tendency is visible among politicians from union councils to parliament. Once you get into politics, you can use this as an entry point to business.”
Prof Sobhan cited the seven-murder case in Narayanganj against Nur Hossain, a bus helper who made Tk 3 crore a day from the sand trading by joining politics.
He, with the help of some Rab members, carried out the murder to climb up the political ladder.
“If every politician aspires to become a businessman, the consequence is the degeneration of party organisation,” said Prof Sobhan.
“This is because they have become financially autonomous. There is no ideology to hold them together.”
“So, you now have an aggregation of businessmen who in many ways are competitive. So, the degeneration of party and consequential commercialisation of the state meant you are functioning a state of anarchy.”
Nazrul Islam, the founder of the Bangladesh Environment Network, said the relative autonomy of the state had reduced amid a decline in the inter-class contest in politics.
He said the taka was kept overvalued against foreign currencies owing to the influence of the import lobby. “This has discouraged exports.”
Owing to the dollar shortages caused by higher import bills, the central bank has had to adjust the exchange rate abruptly. As a result, the local currency has lost its value by about 25 percent against the US dollar in the past one year.
A similar example is seen in the case of gas exploration, Nazrul said.
“Bangladesh was able to explore gas in only 19 wells in the past 20 years. So, the country has become dependent on LNG because of the influence of the LNG lobby group.”
About quick rental power plants, Shapan Adnan, a researcher, said thousands of crores of taka are being taken from the state coffer through indemnity and financial undertakings.
And this has been done in a way that one can’t challenge in courts, he said.
Similarly, the voices and welfare of the working class are becoming absent, the researcher said.
“The working class are not given the scope to play its role. This is alarming.”
Mirza M Hassan, a senior research fellow at the Brac Institute of Governance and Development, said certain business groups such as the associations representing bankers and garment exporters were becoming very powerful in changing the policies of the government.
MM Akash, professor of Dhaka University’s economics department, said there was no debate that the state was serving the capitalist class.
“Politics is dominated by money, muscle and manipulation. And when politicians, bureaucrats and businesses join hands to manipulate, elections take place even though there is no voter and the cost of a project rises three times.”