The AL policy favoring the oligarchs has diminished the economy

The Awami League government favored the super-rich who controlled the capital and laundered the funds, shrinking the country’s economy.

Meanwhile, ousted Prime Minister Sheikh Hasina has announced a zero-tolerance policy on corruption, which is the “biggest mockery of the century”, said former central bank chief economist Birupaksha Paul.

The economics professor at the State University of New York in Cortland, USA, discussed disproportionate economic growth, falsified data, the link between democracy and development and many other issues in an interview with The Daily Star last week.

He said the AL’s economic policy was gradually biased towards the super-rich who already occupied means of production, capital and land in this land-scarce country.

Flawed economic policy severely affected bank financing and the capital market malfunctioned. “So in these cases, the Awami League has not done a good job at all,” Paul said.

He said that surrendering to the oligarchs and pandering to the super-rich, despite being a grassroots party, ruined the AL’s fundamental ethics and deviated from its own commitments.

“And the super-rich not only controlled the capital, they also laundered much of it,” he said.

The market economy was introduced in the early 1990s to get rid of monopolies, but AL created some government-sponsored monopolies, Paul said.

“Someone controls everything. Someone controls the gold industry, someone controls the banking industry, and someone captures seven banks.

“Why did you (Hasina) say the zero tolerance thing when people very close to you were extremely corrupt? Even before the mass uprising, this fact was disclosed by the media but the government did not take any step,” he said he.

INFORMATION

Pavel also questioned the data of the economic indicators. Even if the World Bank’s calculation that Bangladesh’s average GDP growth has been 5 percent over the past decade and a half is true, the rate is not bad, he said.

“The problem is that growth does not necessarily indicate development or address income inequality. The most shocking part is that you are growing, but you are growing out of proportion.”

The growth is coming from the industrial sector, especially only garments and intermediates with very little added value, the economist said.

Unlike politicians, economists were very serious about data integrity. However, the data was unreliable due to falsification by some ministers to show high per capita income and growth, as well as low inflation and unemployment.

“The government was not serious about the integrity and honesty of politics. And the Awami League paid the price,” remarked Paul.

DEMOCRACY AND DEVELOPMENT

There are some ideal stories where countries like England show that democracy and development are not mutually exclusive, Paul said. “In fact, democracy can make a better way of development.”

He believes that there was democracy initially during AL’s tenure, but later the government started saying that development is very important for democracy.

For a strong democracy, institutions must be strong, but in Bangladesh, the institutions were mainly run by people who obeyed the government. “The best example was the retired bureaucrats who said nothing and were not innovative at all,” Paul said.

“Although South Korea is developing, why couldn’t North Korea do that? The same people, the same culture, but they didn’t create the institutions. Now, South Korea’s income is more than 10 times that of North Korea.”

AL showed that there are institutions in the country, but even the judiciary, the Anticorruption Commission, the Competition Commission, the banks, the capital market – all were corrupt, Paul said.

“A leader (AL) made 360 ​​houses in London, England, and without any liability. Even the prime minister knew about it but did not take any step.

“That’s why I said zero tolerance for corruption is the greatest mockery of the century.”

East Asian nations have invested a lot of money in research, education and health, while these sectors are grossly neglected or sometimes totally politicized in Bangladesh, Paul pointed out.

“We cannot improve our educational ranking because we put all political people in institutions and politicized the campuses. Now the interim government has done something like banning a party, a student front. Why not all student fronts?”

Paul hailed the current Bangladesh Bank Governor Ahsan H Mansur for fighting inflation.

To tame inflation, Paul advised the authorities to keep the supply chain mechanism consumer-friendly and prevent extortion at all levels.

“And a reliable data mechanism should be introduced so that manufacturers can make decisions accordingly.”

Paul recommended abolishing the Financial Institutions Division under the finance ministry to ensure minimal government influence in the banking sector.

He suggested the adoption of a fiscal responsibility law to ensure fiscal discipline, transparency and long-term sustainability of public finances.

The economist also recommended restructuring the period of the fiscal year, starting from January instead of July.