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A balance between the state and the market

  • Published at 04:37 pm February 2nd, 2018
  • Last updated at 08:40 pm February 2nd, 2018
A balance between the state and the market

Our finance minister, while talking on his party’s election manifesto in a television interview in 2008, focused a lot on the party’s commitment towards building a “digital” Bangladesh. How far have we moved towards this goal?

Possibly a lot. Yet, there is a long way to go in changing a dynamic society like ours. A few would say we need more, or this is not the way to handle “digital progress.”

We also don’t have definitive answers on achievement under public-private partnership, or when our entrepreneurs and business community can stop lamenting because of the irregular supply of gas and electricity.

Added to these could be: Will the elevated expressway ease the traffic gridlock in Dhaka city? Will Padma Bridge finish within the stipulated time? Is the nation’s journey towards middle-income country status on schedule?

Will the common people get justice from the court of law, or even the law enforcing agencies? Will the kids get quality education in the rural places to come out of poverty? The list could be pretty big.

Yes, the government has passed nine years without any major debacle; rather it has had successes in agriculture, furthering relationships with those who matter (US, China, and India), a forward-looking education policy, the Annual Development Program (ADP) implementation, and higher revenue collection.

I think that the prime minister is well aware of “where the shoe pinches” -- I got this feeling while trying to read between the lines of her recent speeches in the country and even at the climate change conferences abroad.

Economists and policy planners all over the world are being challenged to draw a balance between the state and the market. The situation is much worse in countries where there is poverty when the government is committed to private sector-led growth, and thereby wealth creation, though equitable distribution remains a question.

We need to attack the archaic laws which are not supportive of growth

In a transition economy like ours, each government comes up with long “to do” and “laundry lists,” however, the execution is often constrained by “capacity” issues in civil bureaucracy, excessive politicization, regulatory bottlenecks, vision disconnects, failure in teamwork, lack of proper planning, and focused execution with the fear of being unpopular.

In the same way, the present government led us to dream more than what is possible with the country’s “capacity” level and intellectual solvency.

That is exactly why we are seeing that monetary policy, while trying to address price spiral, possibly cannot do equal justice to the growth agenda, or that the regulatory body at frequent intervals remains mum about “fixing issues” in the capital market.

Added to these are the law and order situation, infrastructure deficiency, and more importantly, the lack of a forward-looking policy which could accelerate growth.

In a labour surplus economy, a government has to focus on employment creation. It is imperative for a savings surplus country like Bangladesh to create a congenial environment for investment, domestic or foreign.

More importantly, we need to attack the archaic laws which are not supportive of growth, an education system which does not accommodate future needs, and a public health system which is failing us.

In Bangladesh, the government often fails to maintain the fire wall with the political party, more significantly from the bad influence of the party rank and file on judiciary, civil administration, police, or even state-owned entities.

Way back in 2002, I read a book titled Who Moved My Cheese? by Dr Spencer Johnson. It was about people looking for “cheese,” which was used as a metaphor for what people want in life: A satisfactory job, a loving relationship, peace of mind. And where they look for it: Within the family, community, or organization.

The book revolved around four characters, each character signified the personality traits in human beings. One character’s trait was to be able to predict the change beforehand, and change himself accordingly. The next one’s was to jump to conclusions, another’s was to fight the fear of change and deal with it, and the last one’s was to stay in the comfort zone and not deal with the change.

The current government has a few more months to go. It came up with a “big bang” about “change.” It was, of course, very popular at the beginning with an “emerging vote bank” with lots of “cheese” around.

There is a mixed feeling -- the government is focused on large public projects, transfer of urban assets to rural places, and bringing speed to day to day operations of the government. On the other hand, there are also allegations.

Who knows, the government may be asking at the end of 2018: “Who moved my cheese?” And that may be too late.

Drawing a balance between the state and the market is increasingly becoming a serious issue. Government agencies are seen protecting too much of a vested interest of the rogue private capital, instead of safe-guarding the legacy of public institutions.

Mamun Rashid is an economic analyst.

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