YEAR IN REVIEW,
2010 dawns with serious concerns for economy, sovereignty
The first light of 2010 ushers in the arrival of a new year and a new decade. It, however, comes with legacies of the two-year long emergency rule, a controversial election, and, severe negative impacts on the nation's economy, its armed forces and the sovereignty.
Besides, the year 2009 witnessed further weakening and fragmentation of our major political parties and other institutions like the ACC while the intense sense of pride we so far possessed as a nation of 150 million strong monoliths has begun to waver.
There are those who might find such characterisation as sweeping generalisations, but they may find themselves wrong-footed in the end. Fact remains: Nation's borders are perfunctorily guarded since the grisly BDR massacre in February 2009 while trade imbalance with India has soared well past US$3 billion. Added to the unaccounted for data generated by huge influx of Indian goods into the country through smuggling (worth nearly $ 8 billion, according to some estimates), the trade imbalance with India must be measured by tripling or quadrupling the official data.
Faltering economy
Moreover, 2009 witnessed alarming reduction in the export of RMG (by nearly 28 per cent), while the increased flow of remittance remains a mismatch with the ground reality portrayed by the huge number of workers returning home each day and the reduced number of new workers going abroad.
The consequent closing of about 151 garment factories lately, and further shrinking of employment opportunities in other sectors of the economy, has left millions more unemployed, making Dhaka and other major cities further problem ridden due to exodus from villages of an ever-growing army of unemployed, resulting in multiplication of the instances of crime and other anti-social activities.
Yet, demonic attempts to depict rosier pictures by sleight of hands continue unabated. One such news is the increased remittance from wage earners, which is nonsense in reality. Various anti-terrorism and money laundering laws in all nations, including ours, having ensured strict compliance of official remittance, resulting in more and more remittance coming via financial institutions and making the data look bigger and brighter, the gains were expected and palpable. Upon close inspection, one however finds that the data on increased remittance fail to correlate positively with other allied variables (the number of workers returning home and the massive unemployment in the source countries), leaving no room for solace or celebration.
Also observable is, whatever foreign investment had trickled down to the economy has had little impact on employment creation, and the government did precious little either to improve that picture. According to BB statistics, net FDI was $207 million in July to October period (which was $402 million in the same period a year ago) while portfolio investment dropped by $29 million in the first quarter of the current fiscal, compared to $7 million drop in concurring period of the previous fiscal.
The overall growth trajectory has stymied further due to the investment-GDP ratio remaining as yet below 25 per cent, in comparison to 45 per cent in China and 36 per cent in India. And, employment opportunities are further dampened by average annual growth of gross capital formation being, on average, 8.6 per cent (2000-2007) only, against China's 13.4 per cent and India's 15.1 per cent.
The rosy picture of economic successes also belie the ADB report of 2008 that had placed Bangladesh as the second lowest nation in terms public investment-GDP ration among 44 Asia-Pacific countries.
Trade gap with India $3.016 billion
Above all, the year witnessed bilateral ties with India transforming from 'sovereign equality to hegemonic partnership'. In fiscal 2007-08, exports to India stood at only $358.08 million against imports worth $3.375 billion, leaving a whopping trade gap of $3.016 billion. The ever galloping trade imbalance is a matter of serious concern for a number of reasons.
First, the imbalance does not indicate the existence of any pragmatic trade pattern prevailing between the two neighbours. For example, Canada is by far the largest trading partner of the US, accounting for 20% of all U.S. international trade. Although the US is 300 million strong while Canadian population is yet to cross the 35 million mark, the US carries the burden of larger trade deficit with Canada, despite Canada having imported $261.2 billion worth of goods from the USA in 2008 alone.
Same is the case with another poorer neighbour of the US, Mexico. In 2007, U.S. trade deficit within NAFTA alone (Canada & Mexico) surpassed $116 billion while in 2008, the deficit rose to $143 billion. These data shows one thing for certain: bigger economies have bigger deficits with neighbours under liberalized trade regimes, not vice a versa.
Decaying RMG sector
That fundamental principal having been amiss in the Indo-Bangladesh ties, more so in 2009, our economy may never bounce back unless the 'India factor' is addressed with courage and determination. Especially since early 2009, the mainstay of our export, the RMG sector-which accounts for over 70 per cent of total export earning-has been badly mauled and debilitated by hidden and transparent Indian interventions.
Contrary to much publicised reasoning by certain quarters, the gradual weakening of the RMG sector did not come about due only to reduced demands from buyers abroad, it has a regional factor to blame. That fault line must be identified sooner, as some latest data shows, apparel export revenue fell to $814 million in September, posting a 27 per cent decline from the same month of 2008. On the other hand, according to the Export Promotion Bureau's statistic, apparel exports fell cumulatively (between July-September 2009) by $325 million, in comparison with earnings in the first quarter of the previous fiscal.
More ominously, from January to September 2009, total earning from RMG export stood at only $2.66 billion, indicating clearly that, once released, final data of fiscal 2009-10 is bound to show more gloomy pictures due to total export earning in the first two months of the current fiscal (2008-2009) having registered only $2.81 billion, down from $2.9 billion during the corresponding period of the previous fiscal.
Economic hegemony
Now look deeply why and how it happened. Since the beginning of the bygone decade, India began to feel alarmed by the rise of our RMG sector. And, as Bangladesh stood poised to overtake India by 2008 (India fetched only $2.27 billion between Jan-September 2009 from RMG export, which is less than Bangladesh), India began to set up industries in Bangladesh to blunt our competitive edges upon installation of an overly-India-friendly regime in early 2009.
Three distinct reasons worked behind such a hegemonic move. First, Bangladesh has a cost edge over India of 9-29 per cent across various products. Secondly, it has duty-free access to EU markets which India does not, and, finally, the labour is much cheaper than in India.
All these niches prompted prominent Indian RMG manufactures-like the House of Pearl Fashions and the Raymond group-to install their factories in Bangladesh while at least seven other companies are slated to move soon to take over a huge chunk of our RMG market. Meanwhile, the trend facilitated more import of Indian raw materials for those industries, which shoved out of business many of our indigenous textile factories.
Besides, as products from these foreign companies are sold under our country tag-while the cost of import of inputs and profit/capital repatriation ate away much of the benefits that our government expected to gain from such foreign investments-the dividend to our economic basket proved marginal or none.
Telecom link with North-East
Added to Indian proposed intrusions into the thriving telecommunication market and the decision to link up sub-marine cable communications with India's North-East via Cox's Bazaar, Indian total share of our market economy could overshoot $50 billion by 2012, inclusive of the proposed investment worth $5 billion in the nine power projects (and a liquefied natural gas (LNG) terminal), for which the botched road show in Europe could not generate any hope on one hand as it was stained by a series of kickback allegations between our energy officials and Chevron, the US oil conglomerate.
Amidst this, despite cautions from experts that Bangladesh will soon turn into a virtual appendage of the Indian economy, some of our economic policy makers kept behaving like an ostrich in the desert sand. On December 16-17, a selective team of officials from the Bangladesh Power Development Board (BPDB) visited India to study both private and state-owned coal power projects to arrange import of electricity from India, despite India being so power deficit that it imports from Bhutan about 13,000 MW of electricity per day to meet peak hour power shortages.
Thus, one of the most lamentable jokes of the year 2009 was the proud utterances of Alamgir Kabir, chairman of BPDB, when he said a few days back that "Bangladesh plans to import up to 1,200 MW of electricity from India by the middle of 2012."
Hoaxes and mirages
These hoaxes and mirages aside, time has come to ponder seriously why India plans to deploy a 50-member strong special force to guard its diplomatic compounds in Dhaka. One plausible reason may be, India has establishments to guard in Bangladesh and the numbers are growing. Or, is it?
From a strategic perspective, the move looks akin to what Delhi has been doing in Afghanistan since its military and material helps to the so called Northern Alliance forces managed to overthrow the Taliban regime in 2001, in cohort with the USA. The war in Bangladesh, however, was fought with ballot; that's the only difference.
One wonders why India currently maintains seven consular offices in Afghanistan, where hundreds of military staff work in disguise as development workers, according to reports. Some experts fear, India will militarily trounce and overrun Pakistan once the Pakistan military gets further bogged down and demoralized in the ongoing civil war with its own insurgents.
Any gain-loss for Pakistan aside, how different are we, until now, compared with Afghanistan? Despite Dhaka's denial that it had not been approached officially by Delhi with the proposal to bring security forces to guard its chancery, foreign secretary Mijarul Quayes said on December 28 that "the Indian High Commission in Dhaka could deploy additional security personnel within its chancery premises if such deployment does not constitute violation of Bangladesh's domestic laws."
Well said. We may not be quite sure how our Foreign Office mandarins want to interpret laws relating to diplomatic protections, but we know for certain that these laws have originated from a series of Geneva Conventions, making it incumbent on the host government to ensure safety and security of foreign diplomats stationed within any country's geographic boundary. Besides, the Indian mission in Dhaka never faced any attack in Dhaka, as it did in Kabul on July 7, 2008, in which 58 people were reportedly killed.
That is precisely why, in this maiden dawn of a new decade, we are increasingly concerned that none of our polite objections have so far deterred India from doing anything it wanted to do inside Bangladesh since coming to power of the AL-led government early this year.
While that misfortune is a making of our own, we should not cease to move stridently to forestall any Indian move to bring armed security forces within our territory from other countries, on the pretext that they too have intelligence to suggest risk of danger from militant Islamists.
HOLIDAY > FRONT PAGE
. Similarly free market and nicety of globalization has become the choruses of Indians only after their nationalistic credo has been deeply planted in their minds, making sure of industrial reach surpassing neighbors after long isolation and confirming militaristic superiority over others in this hemisphere. Let us bridge those skills gap, will ya before drinking more of your free market daru?
