Published in the Forum (May 2008 )

These are difficult times for the global economy. Economic growth is weakening around the world, reflecting the fallout from the sub-prime mortgage crisis and associated financial market turbulence. A recession appears to be imminent in the United States — the question now is about its severity and length. Other developed economies are also expected to slow. As are, to a lesser extent, major emerging economies in Asia. And the slowdown is happening in a period of significant inflationary pressure, complicating the job of macroeconomic policymakers.

What has caused the slowdown? What is the global economic outlook? What is the outlook for Bangladesh? If the global slowdown is much more protracted than the current forecasts, what would be the impacts on Bangladesh? I try to explore these questions in what follows. I also touch on some difficult macroeconomic policy choices facing our policymakers.

Global economic outlook
The International Monetary Fund published its latest World Economic Outlook (WEO) in early April. It began with this sentence: The global expansion is losing speed in the face of a major financial crisis.

Table 1 shows the IMF’s latest economic growth forecasts for the major economies.

Source: IMF WEO April 2008, http://www.imf.org/external/pubs/ft/weo/2008/01/pdf/tables.pdf.

(a) Asian newly industrialised economies are Korea, Taiwan, Hong Kong and Singapore. (b) ASEAN-5 are Indonesia, Thailand, the Philippines, Malaysia and Vietnam. (F) Forecasts.

The proximate cause of the US recession is its housing sector. Construction of new houses has fallen sharply, reflecting an unwinding of an oversupply of houses. Exacerbating the construction downturn are rising mortgage default rates — particularly the sub-prime ones — and falling house prices. Flowing on from all this is an intensifying credit squeeze — put simply, banks and lending institutions have become extremely cautious, denying loans to some borrowers who have projects that would have been funded in other, less turbulent, times. The housing and financial market developments are mutually reinforcing. As a result, the IMF’s baseline scenario has the US economy dipping into a mild recession in 2008.

The US accounts for a quarter of the global economy, and has important trade and financial linkages with every economy around the world. Historically, US recessions have caused slowdowns in other major economies. Hence the adage: when the US sneezes, the world catches cold. That’s why the IMF forecasts sluggish economic growth projections for the other developed economies.

The IMF does not, however, forecast quite as dramatic a slowing in the emerging Asian economies as it does for the developed world. This is broadly consistent with the “decoupling hypothesis,” which holds that major Asian emerging economies — China and India, but also the smaller ones such as the NIEs or the ASEAN-5 — have matured enough so that the US recession might not affect them as much as was the case in the past.

In its latest Asian Development Outlook (ADO), published in March, the Asian Development Bank examines the decoupling hypothesis using a number of techniques. The ADB concludes thus: Developing Asia is not immune to global developments, but neither is it hostage to them. Citing structural transformations, robust productivity growth, and favourable policy climate, the ADB forecasts that the Asian economies will experience a moderation in growth, rather than a sharp downturn.

Source: IMF WEO

(A) Asian newly industrialised economies are Korea, Taiwan, Hong Kong and Singapore. (B) ASEAN-5 are Indonesia, Thailand, the Philippines, Malaysia and Vietnam. (F) Forecasts.

The IMF also forecasts inflationary pressures to continue in both the developed and developing worlds (Table 2). There are two reasons for the recent rise in inflation around the world. Firstly, the robust growth of the developing world — particularly the large economies of India and China — has been causing rapid rises in demand for food and energy commodities. With supply lagging demand, their prices have risen to record highs. With growth expected to continue in the emerging Asian economies, the prospect for commodity prices are still high. Subsidies to bio-fuels are the other major reason for the recent rise in global food price inflation.1 These subsidies are politically popular, and it is unlikely that they will be removed, particularly in an election year in the US.

The inflationary environment makes the macro-economic policy-makers’ job — the restoration of stability in housing and financial markets without setting off a spiral of inflationary expectations — in the US and other affected economies all the more challenging. Plus, history gives grounds for pessimism. The last time the world economy experienced inflationary shocks generated by a commodity boom was in the 1970s. It ended in a period of high inflation coupled with high unemployment and sluggish growth, an episode dubbed as stagflation. And recessions that involve major damages to the financial systems and housing markets tend to last much longer than other recessions, with the Great Depression of the 1930s being the most extreme example of how bad things could get.

On the plus side, the Federal Reserve Chairman Ben Bernanke — who spent much of his stellar academic career studying the Great Depression — appears to have the confidence of the market, and neither a depression nor a stagflation is on anyone’s baseline scenario, yet.

Economic outlook for Bangladesh
The global economic environment described above sets the background to the projections contained in Table 3. While the pace and extent varies, all forecasters project a slowdown in the Bangladeshi economy in 2008 and a recovery in 2009, with inflation expected to remain high throughout the forecast period. When the Budget is brought down in mid-May, the official forecasts are unlikely to be substantially different from these.

Source: Asia-Pacific Consensus Forecasts, April 2008; ADB ADO March 2008, http://www.adb.org/Documents/Books/ADO/2008 /statapps.pdf); the Economist Group.

(a) Financial year (for example, 2008 refers to the year ending 30 June 2008). (f) Forecasts.

According to the ADB, the slowdown in economic growth in the 2008 financial year “is attributed to the erosion of business confidence and the effects of the natural disasters.” The projected recovery in 2009 rests on the assumptions that business confidence will return and there will be “substantial external assistance” to mitigate the effects of the natural disasters.

Looking into the sectoral components of GDP, the economic slowdown is most evident in the industry sector. Growth in production and exports of garments and knitwear has been much weaker in the current financial year. In addition to business confidence, a combination of other factors has been responsible: labour turmoil in the previous years; very weak demand from the US; and higher raw material import costs. A sharper than expected US recession and continued price rises in the global market are of course likely to dampen industrial production and export growth even if business confidence were to be restored.

Agriculture has been hurt by the natural disasters, and its recovery is to a large extent at nature’s mercy. In contrast, the service sector is expected to experience a much more modest slowdown, as strong remittance flows are expected to continue to shore of up consumption.

The ADB expects inflation to remain high throughout the forecast period. Higher inflation is attributed to: rising commodity prices — particularly foodgrains and oil — in the global market; the domestic foodgrain shortfall; and the lagged effect of higher than programmed monetary expansion. In addition to the perennial threats of political upheaval and natural disasters, rapidly growing inflation is listed as a major near-term risk to the outlook. The ADB warns: the failure to rein it [inflation] in could seriously undermine political and economic stability.

Implications for Bangladesh of a worse-than-expected global slowdown
The ADB projects the US economy to grow by 1.5 per cent in 2008 and 2 per cent in 2009. This is much stronger than the 0.5 and 0.6 per cent growth forecast by the IMF. The IMF’s gloomier outlook for the US translates into the projection of a sharper slowdown in the Bangladesh economy. What if the US recession, and the associated global slowdown, turns out to be more severe, or last longer, than is currently anticipated?

There are three major channels through which a worse-than-expected global slowdown could affect Bangladesh: investment, exports, and remittances.

Let’s consider investment first. Should the credit squeeze worsen in the global financial markets, interest rates are going rise even more. Further, at times like this, there is a “flight to quality” — that is, lenders seek the relatively less risky borrowers. As a result, credit spreads will widen, and Bangladeshi businesses will find it harder to borrow. This, in turn, will hurt investment. The flight to quality will also mean foreign direct investment might dry up.

In the near term, sharp slowdown in investment will hurt employment and household income, with flow on effects on consumption. In the medium term, slowdown in investment, particularly foreign direct investment, will hurt industrialisation, technology transfer, and productivity growth — all very important factors for poverty alleviation through sustained economic growth.

The second channel through which a worse-than-expected slowdown could affect Bangladesh is exports. About a quarter of Bangladesh’s exports are to the US, with Germany, the United Kingdom, France, and Italy accounting for another third.

If the US recession is worse than anticipated, or if one or more of the major European countries enter a recession, exports will suffer. A sharp slowdown in exports will have additional impacts on investment, employment, and household income.

Remittances will also suffer, especially if the credit squeeze worsens. This is because most non-resident Bangladeshis, particularly those living in the developed economies, will have to pay higher interest payments in their house mortgage, credit card debt, or personal loans. Remittances have shored up household income and boosted consumption in recent years. If remittances were to start drying up, consumption will hurt, and the service sectors such as financial services, property, and telecommunications will suffer.

Macro-economic policy options
The task of macro-economic policy-maker in Bangladesh is never easy. But it is a particularly difficult balancing act to stimulate a flagging economy at a time of inflationary pressures. This is just as true for our Ministry of Finance and the Bangladesh Bank as it is for the US Treasury or the Federal Reserve. As long as inflation, particularly food price inflation, remains at the current highs, the government will come under pressure to subsidise foodgrains and/or widen social safety nets.

Some possible policies — food for work programs, greater government investment in rural infrastructure projects to generate rural employment — are worthwhile in their own right, regardless of the inflation situation. However, to the extent that they cost money, their implementation is problematic, as the government’s coffers are already in the red. The ADB forecasts a budget deficit of 4.8 per cent of GDP in the 2008 financial year.

The Economist puts the number at 5 per cent. Unless the food subsidies and related programs were financed by external assistance, the government will have to make some difficult choices. Other policy options — liberalisation of foreign investment regimes to encourage new energy projects, or policies aimed at improving agricultural productivity — may not require much government expenditure, but will not yield results immediately.

And in an environment of 40 taka per kg of rice, calls for subsidies that assist the poor here and now will be very difficult to ignore for the government. If significant external assistance is not forthcoming, the government will have to either cut expenditure elsewhere and/or raise taxes, or finance the widening deficit somehow. The former option presents obvious political difficulties. The latter presents significant macro-economic risks. In an already tight global credit market, government borrowing to finance widening budget deficit will crowd out private investment. Alternatively, if the Bangladesh Bank were to finance the deficit by printing money, we would be taking the first steps to hyper-inflation.

Even the most optimistic scenario — one of a very mild US recession and a quick global recovery — still leaves our macro-economic policymakers with little wiggle room. As long as inflation remains high, our policymakers will have to balance difficult policy trade offs. If the worst should happen — a protracted global slowdown with continued inflation — we could be looking at the worst economic crisis since the 1970s.

This is indeed a very bleak outlook, with no good policy options. It is in this environment that the budget will be brought down. And quite possibly, the newly elected government will inherit a more challenging set of tasks than any of its predecessors in decades. No matter what happens in the political arena, it is important that this grim situation is understood.

1. See here: http://www.thedailystar. net/forum/2008/February /food.htm
2. Full details of the ADB’s outlook for Bangladesh are available here: http://www.adb.org/ documents/Books/ADO/2008/BAN.pdf

Mashuqur Rahman and Sikder Haseeb Khan

Published in the Forum (Feb 2008)

Preserving and protecting national security is one of the most important responsibilities of any government. As foreign policy and national security challenges have become more complex, governments have looked to devise appropriate analytic and decision-making bodies. One such innovation has been the National Security Council.

In democracies that have adopted the National Security Council, the council acts as an advisory body on national security policy to an elected head of government. It is subordinate to the head of government (which in Bangladesh would be the prime minister), and has no authority over the decisions of the government’s chief executive. In its more severe form, however, the National Security Council is often used to exert military control over policy, even after power is handed over to civilian governments (Thailand is an example of this).

munem wasif/ Driknews

There has been some discussion recently about forming a National Security Council in Bangladesh. This article aims to add to that disccussion by reviewing the role and structure of the National Security Council (NSC) in the United States, which is considered the prototypical example of such a body under a democratic system. While security is the council’s area of concern, the three key features of the US NSC are its restrictive role as an advisory body, its focus on external, not internal, issues, and its mechanism to assert civilian control over security affairs in a democracy.

A purely advisory role
In the United States, the chief executive authority in the government rests with an elected president. The president is also the commander-in-chief of all armed forces of the United States and is responsible for executing the national security policy of the country. To facilitate the president’s decision making, an advisory group called the National Security Council was created in 1947 by a law passed by the US Congress. The law, known as the National Security Act of 1947, was a consequence of lessons learned during the military campaigns of World War II and an anticipated need to coordinate the different “hard” and “soft” dimensions of security during the Cold War. According to the act, the NSC was created to “advise the President with respect to the integration of domestic, foreign, and military policies relating to the national security so as to enable the military services and the other departments and agencies of the Government to cooperate more effectively in matters involving the national security.”

Like its economic counterpart (the National Economic Council), the NSC is part of the Executive Office of the President. Its meetings are chaired by the president, or a person designated by the president, and attended regularly by the vice president and key members of the cabinet, including the secretary of state, the secretary of defense, and the secretary of treasury. Heads of other departments are often invited to attend NSC meetings when appropriate. To help coordinate national security policy and response among the different departments of the government, the president appoints a national security advisor, who acts as White House’s top analyst and focal point on security-related issues.

A focus on external security
In the United States, a strong system of checks and balances keeps foreign and domestic security apart and civilian command firm. There has also been a legal and political tradition of keeping the military out of domestic policy and domestic deployment. James Madison, one of the founders of the American political system, wrote powerfully in 1788: “A standing force, therefore, is a dangerous, at the same time that it may be a necessary, provision. On the smallest scale it has its inconveniences. On an extensive scale its consequences may be fatal. On any scale it is an object of laudable circumspection and precaution. A wise nation will combine all these considerations; and, whilst it does not rashly preclude itself from any resource which may become essential to its safety, will exert all its prudence in diminishing both the necessity and the danger of resorting to one which may be inauspicious to its liberties.” The Posse Comitatus Act of 1878 and its update of 1956 formally limited government authority of using the military for enforcing domestic law and order.

This tradition of separating foreign and domestic security has influenced the design of the NSC. The NSC deals mostly with external threats to national security, such as the Soviet threat during the Cold War or the threat of terrorism now. During the Clinton administration, the NSC’s main concerns were the Balkan Wars, Somalia, consequences of the first Gulf War, and the expansion of Nato. In the current administration, the War on Terror is the main concern and the Middle East the primary focus, with secondary concerns around North Korea, China, Pakistan, and an increasingly assertive Russia. In all this, the NSC advises the president and the cabinet on external security — and it is the president who ultimately makes policy decisions to the extent permitted by the Congress.

Control by civilians
It is the same type of checks and balances that keep the control of the NSC in civilian hands. In addition to the civilian heads of departments, the director of National Intelligence and the chairman of the Joint Chiefs of Staff attend National Security Council meetings. The Joint Chiefs of Staff consists of the service chiefs of the four major branches of the United States military: the army, the navy, the air force, and the marine corps. The chairman of the Joint Chiefs of Staff is one of the service chiefs and is appointed to his position after being nominated by the president and confirmed by the United States Senate. The chairman is the only non-civilian member who is a regular attendee of NSC meetings. The chairman attends the meetings in his capacity as the principal military advisor to the president of the United States.

All the service chiefs of the US military, including the chairman of the Joint Chiefs of Staff, report to the civilian secretary of defense, who in turn works for the president. The Joint Chiefs of Staff, though they are service chiefs, do not have any command authority over the US military. To separate military advice from military command authority, the US Congress passed a law known as the Goldwater-Nichols Act.

Goldwater-Nichols ensures that the military chain of command in the United States runs firmly from the civilian president, to the civilian secretary of defense, directly to the military combatant commander in the theater of military operations. The service chiefs (Joint Chiefs of Staff) do not have any operational control over the US military and act, through the chairman of the Joint Chiefs of Staff, in an advisory role to the president of the United States. This separation of military advice from military chain of command is one of the crucial mechanisms to safeguard civilian control of the military, and thereby national security affairs, in the United States.

A mixed record
In more than half a century of existence the US National Security Council has had a mixed history. Each American president has molded and used the National Security Council according to his own personal style. Some presidents, such as John F. Kennedy and Lyndon Johnson, made little use of the National Security Council, relying instead on ad-hoc policy making sessions and personal relationships with department heads. Still other presidents, such as Richard Nixon and George H. W. Bush, relied heavily on the council to gather information and shape national security policy.

Often the effectiveness of the council has depended on the strength of the national security advisor and the advisor’s ability to balance the competing agendas and personalities of the secretary of defense and the secretary of state. Strong national security advisors, such as Henry Kissinger, have had significant influence in using the National Security Council to provide the president with national security policy options, although the policies so formed did not always meet with success and at times led to spectacular failures.

Most recently under President George W. Bush, a weak national security advisor faced with a powerful secretary of defense and a weak secretary of state resulted in a National Security Council that was ineffective in providing the president with informed national security advice. The outcome was a foreign policy blunder and a march to war based on one of the most significant intelligence failures in United States history.

Democratic and the non-democratic parallels
All in all, even in the most powerful country in the world, the NSC has been neither indispensable nor unquestionably successful. But what remains unquestionable is that in the US, the NSC’s role has been restricted carefully to prevent military interference in elected authority. In contrast, in countries like Turkey and Pakistan, such councils are set up essentially to retain and exert military control over a wide range of policy. This is potentially dangerous: it creates an unaccountable authority, compromises the value of democracy, and undermines the professional purpose and integrity of the military by thoroughly politicising it. But one thing that Pakistan and Turkey have in common is that they both face troubling external security environments. Bangladesh faces a far less complex external threat environment; therefore, any perceived benefit of setting up a National Security Council should be weighed carefully.

Tanvir Ahmed/ DRIKNEWS

Even in the United States, which faces the most complex external security environment in the world, the National Security Council remains a purely advisory tool for elected governments to use, with a focus on external, not domestic, issues, and commanded in both letter and spirit by civilians, not the military. In a country where power belongs to the people, national security policy has been no exception, even in times of turbulence and war.

Tazreena Sajjad

Published in the Forum (Feb 2008)

“The problem is why we can or should no longer speak of evil, and why who so seem to be increasingly suspect, self-serving and irrational; why to speak of evil is in a peculiar way to perpetuate it, but at the same time, to refuse to be contaminated by the word is to perpetuate what it denotes … the repertoire of evil has never been richer, yet never have our responses been so weak.”
– Andrew Delbanco

Artwork by Kamrul Hasan

At a talk in Washington D.C. in January, I heard the following: “[T]here is talk in Bangladesh right now of trying the war criminals, you know, those who sided with Pakistan, having these tribunals, but I personally think it’s not the time for Bangladesh to come up with policies that divide the people. It’s more a time to improve our democracy, or to strengthen our institutions. It’s not time to try people who … I mean at the time of the ci … liberation war, Bangladesh was East Pakistan before it became Bangladesh. And so we don’t over here try people who supported slavery in the South. It was a civil war at that time. And so I think it’s time for Bangladesh to move ahead. I think the country should focus on having elections rather than, you know, how do we beat up on our citizens.”

These words are neither new, nor the thoughts original. The population of every country transitioning out of war and with experience of mass atrocities comprises, roughly speaking, two camps — those who want justice, and those who want to let bygones be bygones.

I have come across similar arguments multiple times in the context of Bangladesh. They ran along the slightly (and I used the term “slightly” deliberately) similar vein of those in Pakistan who continue to define 1971 as a “civil” war, an unfortunate mistake which claimed a few thousand lives and was largely an Indian conspiracy.

Before any reader takes offence, I am not suggesting that anyone with such sentiments necessarily fall in the camp of genocide deniers. But minimising the extent of the suffering of the victims — those who died, those who survived, as well as those who resisted — does appear to be the modus operandi of how we today deal with our own tragic history.

Compartmentalise, minimize, and move on — a convenient philosophy which greatly facilitates the focus on contemporary problems. The “peace now, justice later” echoes with the same refrain of “development now, democracy later” — setting up both a false dichotomy and assuming these are mutually exclusive. Before analysing the problematic natures of these assertions, let me attempt to understand the logic that underscores this interpretation of our past.

First, such pragmatists are present-centred — the problems of the present take precedence over the past. Bangladesh has a host of severe challenges: poverty alleviation, economic development, women’s emancipation, corruption, overpopulation, environmental degradation, health — the list is both extensive and exhaustive. Why try to address events that happened “so long ago” when we have so much more to do in terms of the present?

Second, there is an argument regarding resources — why invest in tribunals, truth commissions, or any other form of mechanism to address crimes of the past, when the resources can better serve the population today?

Third, along the same vein, the resources we do have regarding the judicial infrastructure is better put to use in addressing the crimes of today, not to prosecute crimes committed “so long ago.”

Fourth, there is the argument for stability — we want peace at all costs, even if the definition of peace is based on the minimum requirement of the absence of violence. As eloquently stated by the speaker above, we do not wish to wish to “beat our own citizens on the head and divide a nation.” Punitive measures will destabilise the country and create more hostilities when we can easily leave the past behind.

And finally, and most controversially, there are those amongst us, who have not yet reconciled with the birth of Bangladesh and its divorce from Pakistan and who would have liked to see the entity continue as a whole. For them, a discussion of who did what to whom is at the least uncomfortable.

Given both the tenacity and compelling nature of these arguments, what can someone say, sentiments aside (if that were indeed possible), about the dire need to start a war crimes tribunal? Let me begin with three general reasons why burying the past by deliberately forgetting is, simply put, not such a good idea.

First, some may be able to forget; but they are never the victims or the survivors. A national policy geared on the principles of collective amnesia cannot obliterate individual memory.

Second, if the government does not attend to the victims and their injuries, then it fails in one of its basic political duties — protecting and upholding victims of injury is one of the basic raison dêtres of the state. Creating the space for survivors, liberators, victims to claim their right to remember and to ask for a national response to their trauma is within the premises of what a nation-state owes to its citizens. Bangladeshis are not unique in this demand. The state has both the responsibility to both protect and preserve. The survivors have a right to demand.

Muktijuddha Jadughar

Third, grievances without redress tend to fester. Festering leads to not only hatred for the perpetrators and their descendants, but also generates an endemic mistrust of a state that has failed in its duty to vindicate the past once before, and maybe ready to tolerate injuries in the future.

In the context of Bangladesh, the movement for demanding accountability not only highlights the politics of the different camps with differing opinions about 1971, but also sheds light on certain misconceptions and assertions that can be bandied around in public rhetoric. It is important to point to some of these.

First of all, the demand for justice can not only be minimised by pragmatists as being practically unfeasible, but also conceptually improbable, since they can argue that it is based on naïve sentiments. In reality, the demand for a trial for war criminals is based on legal proceedings; punishment is not being sought for, and neither can it ever be handed down by a court of law for ideological differences. Particularly, conflation of the terms “supporters of Pakistan” and “war criminals” is highly dangerous and misleading. Siding with Pakistan, or supporting the unity of Pakistan, although distasteful for many, is not a crime in legal terms; participation in the destruction of human lives and property is.

The demand for trial is for those who directly or indirectly participated (organised, orchestrated, mobilised) in the killing, raping, torturing of civilians in the course of the war. Punishment is being sought for real crimes, not for political opinions. To distill this in layman’s terms, the arms of law cannot punish an individual for thinking of a criminal act, but only for executing it.

Furthermore, those who argue that any form of justice is unnecessary for 1971 basically suggest that a murderer who lives in your own neighbourhood, and has murdered your family member, ought not be tried because it will disturb the peace of the neighbourhood. Surely, even such a crude example captures the absurdity of the understanding of peace at all costs.

Art Work by Arif Haque

Second, what needs to be clarified perhaps is the demand for war crimes is a move towards a systematic appeal to address the issue of accountability. A focus on trials, whether effective or not, or whether they will come to pass or not, is secondary to a more critical issue. The desire amongst those demanding trials is for justice, not vengeance. This should be a move forward through an organised, highly transparent procedure, led by the state, through functional legal and hence legitimate mechanisms whether effective or not, or whether they will come to pass or not, is secondary to a more critical issue. The desire amongst those demanding trials is for justice, not vengeance. This should be a move forward through an organised, highly transparent procedure, led by the state, through functional legal and hence legitimate mechanisms and far removed from narrow political interests and motivations of individuals or groups.

Third, the desire is for identifying individuals, not groups or political parties as a whole for crimes they committed in 1971. Being able to separate group identities and focusing on individuals for their role in causing suffering goes a long way to establishing individual culpability and exonerating those who have had to shoulder the stigma of being associated with collaborators.

Fourth, there needs to be recognition that such a process will never be clean and easy. Serving justice is a messy business, and when it involves war crimes and crimes against humanity, the reality is messier. There is no pretty picture to paint for this reality. If the reliance is on punitive measures, and barring any possibility of a truth and reconciliation commission, then the country has to live with the “not guilty” verdict while it celebrates guilty verdicts. And finally, because these individuals who did not believe in Bangladesh are still citizens of the country, they deserve a fair trial, regardless of whether we can truly grasp the ramifications of such decisions.

It is also important to note that those who suffered the least, are the most willing to forgive and forget, and some of those who have suffered the most, still hold out for some hope of justice. From a bird’s eye view, the quiet resignation of many have implied that in general we had reconciled with our horrific past. I question this. With blanket amnesties provided for political reasons after the war, and incorporating purported war criminals into the political process, there has been little scope to discuss the issue of accountability and little hope that demands for justice will ever be heard.

Resignation, as has happened in many countries, has been mistaken for reconciliation. In turn, for thirty seven years, the state and those who are wary of the tribunals have basically asked rape victims, torture survivors, orphans, persecuted religious minorities, eyewitnesses, and those who have lost homes, families, identities to live side by side by those who have betrayed them as a demonstration that we as a nation have reconciled, and are ready to move on. May it be contemplated that we have punished our own, by making them relive the horrors of their experiences for 13,505 days and counting. 1971, a poor man’s war, continues to be largely a poor man’s burden.

Finally, the pragmatists’ focus on the present is interesting because it
We do not have to look very far. The critical decision to forgive collaborators and include them in mainstream politics has, after three decades, come to haunt us. The choice of not dealing with the past, combined with other realities in the domestic and international front, is breeding the challenges for today. Our desperate desire to compartmentalise and fragment our own history has meant we now have a serious problem to deal with, and in so many ways, so inadequately prepared to contend. This is one of the many legacies of 1971. These are the many prices we pay.

Forgive, forget, move on and reconcile within our own selves, the horrors we witnessed and the scars we bear, not just as survivors, but as a nation, that has been systematically denied its right to a continued, comprehensive history of its emancipation. Implicit in this call to forget, is the message that it is not yet time. Perhaps, according to some camps, a transitional society, with a weak, non-existent rule of law and a host of post conflict reconstruction challenges can offer this argument (although in some cases as in Rwanda, Bosnia, East Timor, Uganda, Liberia and Sierra Leone, the need to address justice has gone hand in hand with the necessity to deliver peace).

The question is, does this message apply to Bangladesh? Has this period of waiting — thirty seven years of waiting with hope and resigning with despair — been a sufficient period of time to hold out for demands for accountability? How much longer should a nation have to wait for deliverance, or at least an acknowledgement of their demands? Can the pragmatist look survivors in the eye and tell them what they mean by the “right” time and when it will come?

Is there ever a good time, a right time, to prosecute war crimes, crimes against humanity and crimes of genocide? Does waiting, and biding for the ideal moment to try systematic rape, torture, destruction of villages, slaughtering of civilians, massacre of intellectuals, forcing women to have children born of sexual violence, make the issue of seeking justice any easier?

Waiting for the right moment can perhaps only mean one substantive reality — the loss of more eyewitnesses, the loss of momentum in creating documentation for trials and truth commissions, and a continued fostering of a sense of resignation of survivors that the state will never hear their voices, because they were never important.

Asif Saleh

Published in the Forum (January 2008)

I carry a Newsweek from last year that has on its cover a profile of a confident young sari clad woman and a caption that blazes: “New India.” My dream is to have Bangladesh on that cover one day, flashing: “The Resurgent Bangladesh.”

In January this year, like most of the populace, I had hoped that we could begin that journey towards resurgence. But it didn’t take long for that bubble to burst. There have been a lot of negatives and positives in the past eleven months. Mistakes have been made, credibilities have been dismantled, moral authority has been lost.

But it is not too late to start to get that Newsweek cover out in 2009 — after our election. If our current power holders can assess where they are now and be innovative about the next few months towards the election, it is still possible to bring back that positive aspiration that has now all but disappeared.

Lessons for the caretakers
The four most important lessons that the government should take from the past few months are:

• The capacity of this government is much more limited compared to the tasks they have taken.
• The political forces are a reality in Bangladesh and they will not just disappear without a fight.
• A policy is a bad one if it does not take into account its macro impact.
• With no direct mandate or moral authority, its not possible to forcibly make drastic changes in the rules of the game without disastrous side effects.

As the government started implementing a more expansionist agenda with increasingly less transparency, its acceptability has gone down and its legitimacy has been questioned. Its response to these events have caused a further down-ward shift in popularity. The moral authority with which the government came to power has slowly eroded over the last eleven months, making it more vulnerable to various internal pressure groups. That pressure is only going to increase if there is no drastic change in how the caretaker government is approaching reform and the upcoming election, and chances are the government may resort to harsher measures to stop the dissent.

There are twelve months left to the election. For a government whose legitimacy is now increasingly under question because of the sweeping changes it is trying to make, that is a long time for things to go as per plan. They must understand that it will be impossible for people to have complete faith in their end game without restoring their moral authority to previous heights. Ultimately, the big question is will the status quo work and what is the best way to move forward keeping the big picture in sight.

In order to see whether the existing set up will work, one must look at the issues that are currently facing the government.

Moral authority
When the government came to power, it was told that it would be purely judged by its actions, and its acceptability and legitimacy will solely depend on their being able to continue to carry the moral authority they came to power with. Unfortunately, the moral authority has somewhat eroded due to certain actions. Unquestionably, the government scored its biggest points by taking on the untouchable high almighties. However, widely reported human rights abuse cases still remain unpunished. The result is that there is a growing number of people who feel the justice is not so blind towards the neo-ruling class.

Transparency
With a goal towards setting a standard for good governance, along with coming up with a lot of good measures, the advisers themselves have not been able to stand out. As politicians are getting jailed for lying in their wealth statements and government officers are being asked to provide their own wealth statements, the advisers themselves and the our top power brokers strangely seem out of the whole process, not having to furnish their own wealth statements. Most importantly, the government seems to be taking fundamental policy decisions, claiming mandate without bothering to justify it.

Precedence
The current caretaker government has set a precedent in dealing the politicians who have established reputations in corruption or have been perceived to be corrupt. The efforts were initially seen as cleaning up the politicians’ mess. But it is setting a dangerous precedent for the future. Similarly, the amount of policy decisions they are taking without clear constitutional legitim- macy is setting an alarming precedent that our constitution can be ignored as long as you can claim the people are with you.

Acceptability
The government has tried to engineer the reform process and break up the political parties. With the falling popularity of the government, these reformers are increasing being seen as the latest in the turncoat politicians that the country has seen. In the process, the government has successfully managed to completely disengage the majority of the parties and their grassroots workers.

Given the issues of legitimacy, this government will simply be unable to govern without addressing the issues above. Nothing short of a wholesale change in government policy will actually do that.

Lessons from Iraq and Nepal
The current political mess in Iraq began when the United States banned all members of the Ba’ath party from the new government, as well as from public schools and colleges. Under the previous rule of the Ba’ath party, one could not reach high positions in the government or in the schools without becoming a party member. So by excluding the Baathists, US designed ways to block many experienced and able people to participate in the new government. By the time, they reversed this policy, it was far too late and the political vacuum was filled by far more dangerous extremist elements in the country. The present regime in Bangladesh, has successfully portrayed politics to be a dirty word and decided to leave the politicians out of the process of cleaning up their “mess.” But the end result of this might not be a new set of clean political leaders, but possibly rather sporadic violent protests and the political land grabbing of opportunists like Jamaat-e-Islami,

As the government claims that conspiracies by the “evil-doers” from the political parties caused the unrest a few months ago, it is also tacitly accepting that the political parties are capable of shutting the country down completely as well.

Is nation building for the supposed new era possible without the millions of people that support the mainstream BNP and Awami League? Without venues for expressing dissent, the response from these groups is bound to become increasingly violent if they are not brought in as stakeholders in the process. Similarly, political parties must try to engage in meaningful conversation with the powers that be. In this context, a meaningful national dialogue is in the best interest of the country to come up with a roadmap towards a functional democracy with all the key parties having a stake.

In order to make the political parties stakeholders in the process, we can suggest that the caretaker government should be revamped within the framework of the constitution to include politicians. Some of the advisers from the current lot should be replaced by members of key political parties. The trust between the government and the parties must be brought back. The main political parties along with all the stakeholders in the current government need to come together and sign a national accord to agree on keeping some of the existing reform agenda to be pushed after election by whoever is in power. We have examples of such agreement where in 1991 both BNP and AL agreed to revert to parliamentary democracy in 1991 after the election.

The national accord among other things can discuss having an election like the Nepal model to elect an assembly that may be in place for two years with a room to review the constitution and make amendments as necessary based on what worked and did not work in the past 16 years. Nepal is heading to election to elect a constituent assembly for two years, that will decide the future of monarchy in the country among other things. Not only they are resolving the long-standing Maoist problem by bringing them into the political process, they also are forming a truth commission for all the minority communities to come together and form a constitution where the rights of all these groups are well protected.

Similarly, Bangladesh also can elect a constituent assembly which will be responsible for implementing solutions for the long-standing issues that have plagued our country. This will implement further reforms agreed to by all the parties and further strengthen reform and institution building for the following two years with a much needed legitimacy in their actions.

Post 1/11, the country looked forward to a new kind of politics. Unfortunately, due to some poor decision making, the country is headed for the same old confrontational politics and election boycotting. It is time to throw the challenge back to all the groups to show some vision and far-sightedness.

On one hand we need to admit, the politics and democracy practiced in the last fifteen years had flaws and on the other hand we must acknowledge politicians are key stakeholders in our future progress and bypassing them forcibly will only bring more chaos and unwanted results. So let’s have national unity and regeneration as the key goal towards any future settlement in order to see that Resurgent Bangladesh that we all envision.

Jyoti Rahman

Published in the Forum (November 2007)

Rising food price inflation is a major, perhaps the most important, economic issue facing the country. But it’s not only in Bangladesh where food prices are rising. It’s a global phenomenon that the Economist has dubbed agflation.¹ There are macro and microeconomic reasons behind agflation, and policies to combat it will have to take these factors into account.

Let’s start with the global reasons. There are three reasons behind the global agflation. First, concerns about the effects of climate change have resulted in a rapid rise in the demand for bio-fuel whose production relies on corn. This has led to rises in the price of corn and its substitutes like wheat and other grains. Second, rapidly rising prosperity in poorer countries, particularly India and China, are raising global demand for food products, and are thus fuelling price rises. Thirdly, as grain prices rise, so do those of other food products — there is less land for growing vegetables and the poultry industry itself depends on grain.

Agflation in India has strong implications for us as our food market is quite strongly linked with that of our neighbour.

One would expect food prices in Bangladesh to move in concert with those of India. This indeed was the case until 2003, as Chart 1 shows.²

The chart also shows that food prices in Bangladesh started rising in 2003-04, about a year before Indian prices.

Chart 2 shows how the taka has depreciated against the Indian rupee since 2003. One Indian rupee cost 1.20 taka in late 2002. In mid-2007 the rate was 1.70 taka per rupee. That is, whatever cost 1 rupee in late 2002 now costs 50 paisa more in Bangladesh.

Now a story can be told. As the taka started depreciating against the rupee, Indian imports became more expensive in Bangladesh. So, even before Indian food prices started to rise, our prices were taking off. Of course, once Indian prices started rising, the continued depreciation made matters worse.

If the depreciating taka is the problem, then is an appreciation the solution?

Any appreciation of the taka could hurt exports, a sector that has done relatively well in recent years (Chart 3).

Exports may have become more competitive internationally by the depreciation of taka against the euro and the US dollar over the past few years (Chart 4).

However, the exports sector depends heavily on imported intermediate machineries, and a weak taka makes them expensive. Further, exports really started taking off in 2004, after taka started depreciating against the euro but before its fall against the dollar.

Compared with a weak taka, potentially a much more important reason why the exports have done better is strong growth enjoyed by the developed economies since 2004. This strong growth has resulted in consumers in those countries demanding more of our exports.³

Structural changes within our garments sector –a move towards knitwear — have also helped exports.

Since rupee is the primary import currency, especially for food essentials, any depreciation against rupee has major inflationary impacts, but little competitiveness gain for our exports. If the rupee exchange rate were to stabilise at say 1.50 taka/rupee, then the taka would appreciate a bit against both US dollar and euro. Policymakers need to evaluate how much such an appreciation would hurt exports and balance that against the gain in terms of lower import — and thus food — prices.

In addition to any exchange rate policy, there are, of course, a range of microeconomic factors that need to be addressed in stabilising food prices. Much has been made of the collusive behaviours by business syndicates and hoarders, and the impact of the anti-corruption drive on business confidence. In this regard, it is important to think about the underlying economics of our food market. As an essential, food, particularly rice and other grains, are relatively price inelastic — that is, a large rise in prices lead to only modest fall in demand. In addition, given the scales involved in operating a food imports business in Bangladesh, the wholesale market for food is likely to be dominated by a few large players. This means that faced with falling supply, the natural market response would be to raise prices — this is not immoral behaviour by any businessman, rather, it is what economic theory suggests a profit maximising businessman would do.

Of course this hurts the consumer. To safe guard consumers’ welfare, it is important to create an independent competition watchdog. However, the exact composition and mandate of such an agency, and the way it will work with other agencies such as the Anti-Corruption Commission or the tax authorities require careful consideration.

In addition to an agency to enforce competition policy, there are other avenues that our policy makers should pursue. Sharp rises in prices following (or in anticipation of) a fall in supply can be somewhat mitigated against by better provision of information.

For example, the lack of reliable data about the magnitude of our large informal food trade with India makes it harder for the market to adjust. A commodities future exchange would help traders to smooth out the impact supply shocks. The restoration of the food stock buffer system that was built up over the 1980s and 1990s, but run down in the current decade, should also be a priority. And finally, more investment in improving agricultural productivity is needed.

But most of these policies will yield benefit only in the medium-term, whereas rising food prices is a clear and present danger. The authorities would do well to remember that price controls and command economy have not worked anywhere, and treating economic problems as law and order issues will not help. It appears that macroeconomic policies are the only realistic options left to our policymakers in the short term.

A lot has been written lately on the recent discussions between our policymakers and the pundits from the IMF. Media reports suggest that the Bangladesh Bank is signalling an accommodative monetary stance — contra IMF advice — going forward.⁴ The expansionary monetary policy that is being reported is likely to lead to further depreciation of the taka against the rupee. If stemming agflation is the objective, it is hard to see how this is going to help.

In the long term, improving agricultural productivity is the only way to stop spiralling food prices. In the medium term, we need to build institutions such as a competition watchdog or commodities future exchange. But in the short term, an appreciation of the taka against the Indian rupee is likely to be the best option to combat agflation.

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1. The Economist, The agonies of agflation, August 25, 2007.
2. All data are from the CEIC Asia Database.
3. The Economist, Knitting pretty, August 16, 2007.
4. Taslim MA, Crying wolf the third time, Daily Star, October 1, 2007.

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This article has benefited from discussions at: Unheard Voices (http:// www.drishtipat.org/blog/), Addafication (http:// addafication.com/) and In the middle of nowhere (http://rumiahmed. WordPress.com/).

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Mridul Chowdhury  

Published in the Forum (August 2007) 

The writer reflects upon what he learned making the film and in attending screenings of it in several cities across the world

One boat, 42 lives; 17 dead, 25 waiting to die — they have been floating on the sea for about 10 days without food or water. One looks at another as potential “food” and wonders which part of a dead-body may be easier to swallow, while another uses his last breath to look for something sharp enough to cut up a dead-body.

This was the experience that a group of young Bangladeshis had to go through as they undertook an illegal journey in early 2005 to reach Spain. They trailed through the Sahara Desert — sometimes by a jeep, sometimes on foot — with hardly enough to eat or drink, and always afraid of being shot at by border patrols. After barely surviving the desert, and spending weeks in jails in horrendous conditions, the group had to take a small rubber boat to cross the mighty Mediterranean Sea. The boat’s engine stopped after a few hours and they were stranded on the boat for about 10 days until the Algerian authorities rescued them. Some survived to tell the heart-wrenching story of the entire journey — the inhuman suffering in having to drink one’s own urine, the pain of watching a brother or a friend slowly starve to death, and the horror of making the cruel choice between death and eating up body parts of a dead friend.

Popular writer Anisul Haque narrated their story in his novel Dusshopner Jatri, which provided the initial inspiration for making a film based on their experience. After pulling together most of my personal savings and receiving generous financial support from friends like Nadia Afrin and Tahmina Khanam, Sujan Mahmud and I embarked on our own journey to make a film that eventually became Deshantori. Little did we know at that point that we were not only going to get into the lives of those who went on that tragic journey, but also into the mind of an entire generation of young Bangladeshis.

The making
It was in March 2006 that we started interviewing the survivors of that harrowing journey. What unfolded was a picture that we did not quite expect — almost none of the 26 people who went on that journey came from families suffering abject poverty. Most had TV in their houses and many had other family members sending money from abroad; two even came from a middle class family with own apartment in the heart of Dhaka. Clearly poverty was not a major factor behind these people taking such life-and-death risks in trying to emigrate to a developed country. But then, what was?

Our quest to find the answer to this is what forms the underlying basis of Deshantori. In the process of making the film, we roamed across the nation interviewing the youth from various walks of life asking their views on Bangladesh’s future, their possible role in it, and their reasons for wanting to migrate so desperately. What we found was a deep-rooted frustration caused by the endemic injustice that in their minds was almost a permanent phenomenon. Widespread corruption, extortion by politicians and their allies, unpunished crimes, armed politics in university campuses — these are only parts of why they felt that they do not see any future in Bangladesh. One interviewee summarised the widespread psyche of many young people in Bangladesh: “With my qualifications, I cannot do anything worthwhile in Bangladesh; if I can go abroad, I know I can.”

Even those who came from relatively well-off families and had the ability to gather some decent amount of money did not seem to have the confidence to use it for any investment in the country. Rabiul, one of the survivors of the journey, had borrowed a substantial sum of money from his relatives. He said during the interview: “If I were to ask my relatives money for starting a business in Bangladesh, none of them would give me money, not even my parents. If I tell them that I will use the money to go abroad, only then will they give me money.” We found that the thought that “Bangladesh is not a country worth living in if there is a way out” is quite deeply embedded in the psyche of much of the young generation.

However, that was not all that we found.
In our quest to probe into the minds of the youth in Bangladesh, we found the other side of the story as well. There are numerous young people who had come back to Bangladesh with a strong sense of optimism after having worked or studied in developed countries; and there were also others who did not want to leave the country for anything other than academic purposes. These people had a faith that things will turn around in Bangladesh and they wanted to participate directly in or lead that process with everything that they have. A young interviewee from a small college in Cox’s Bazar said: “This is my motherland; it has made me who I am today. If I do not give back to my motherland, I think my whole life will become meaningless.”

The final form of Deshantori became more than just a visual reconstruction of the horrific experience of those 26 Bangladeshis — it told the story of the youth of Bangladesh, with all its glory and its sadness, and always with unrestricted openness. While making the film was an eye-opener for me in many respects, yet another kind of experience was waiting for me at the screenings of the film.

The screenings
Deshantori was publicly premiered in Bangladesh at the Liberation War Museum International Film Festival where it won the Audience Award. The young crowd embraced it since it spoke their voice, brought out their internal conflicts, their dilemmas, their frustrations, their joy and their pride. Drishtipat, a global youth activist organisation, organised the first international screening of Deshantori in London in February of 2007. It was shown in front of a full-house audience comprising of mostly young Bangladeshis living in the United Kingdom, many of them second-generation British-Bangladeshis. It clearly struck a chord with the expatriate community — it was a film that rekindled their longing for the country, provoked deep anger towards the corrupt power-brokers that were destroying the nation and also brought to surface a craving to do something to change the way things are.

In the last few months, Deshantori has been screened in a number of cities with high concentration of Bangladeshis in the United States, United Kingdom and Canada. I was lucky to be present at most of these screenings. What was personally most satisfying to me was that at the end of the screenings, the audience would spend much of the time during the Q&A period talking about how they can get involved in trying to contribute positively to the country rather than the negative aspects that drive young people to such desperation. The pain from seeing such a horrific true story brought to life and the frustration that comes from hearing the youth utter words of hopelessness are, in most cases, overshadowed by a resolve to try to change the country for the better.

One viewer wrote the following in the Deshantori blog: “I watched the movie last night. It is 4 o’clock in the morning and I still have not been able to go to sleep. This movie has not only rekindled my love for our Bangladesh, but has also affirmed my plans for doing something constructive for Bangladesh. I am a ‘probashi‘ who has been living in America for the last 16 years but who has Bangladesh in her heart every single day. I urge all the new generation like me to watch this movie and promise ourselves that we have to do something for Bangladesh today. Not in the future — but Today. Our country needs us NOW.”

In the first US-based Bangladeshi film festival held in Dallas in April 2007, Deshantori was selected as the opening film of the festival. After the screening, in the theatre lobby, a young man in his late 20s suddenly burst into tears rather loudly. When I approached him, the only words he could manage to say was: “I haven’t gone back to my country for more than I can remember. I miss Dhaka.” I didn’t know what to say, so I just stood there waiting for him to calm down. When he finally did and regained his composure, he took my hand into his and said: “Bhai, just tell me what I can do for Bangladesh and I will use all my strength to do it.” Then it was my turn to break down into tears. As I embraced him, I knew at that very instance that the tireless hours and sleepless nights of the entire crew and all our hard-earned money that went into making Deshantori had found a meaning.

Deshantori will be screened at various universities and hubs of youth communities in Bangladesh and around the world in the next few months. The post-screening discussion will center around the formation and activities of an emerging global youth-based organisation called Phiriye Ano Bangladesh that is in the process of engaging the youth to realise the dream of creating an prosperous, equitable and democratic Bangladesh.

When making Deshantori, little did we realise that it would one day be used as a tool to rally youth support around the cause of taking Bangladesh to heights it has never reached before. As I write the conclusion, all I can think of is to say to the spirits of all those young people who have suffered painful deaths while trying to escape the injustice of the very country that many of our earlier generation gave blood to create — your untimely deaths will not go in vain. We will create a Bangladesh from where people will never have to flee recklessly out of desperation. Where Deshantori will leave off, Phiriye Ano Bangladesh will begin. Amra Bangladesh phiriye anbo-i.