I am with Abul Maal!

Published : 11 Feb 2016, 10:59 AM
Updated : 11 Feb 2016, 10:59 AM

It is not very often that I agree with a sitting government minister (any sitting minister) or high official. They tend to talk through both sides of their mouths and blur facts and fiction. Some of these people started as idealists, but the process of acquiring power and wielding it has made them corrupt and venal truth-benders. As they say, "Politics ain't no bag", and once one achieves political power, we can assume the conflation, economy of truth, and self-promotion are simply part of the mix.

In this context, I was momentarily jolted out of my worldview when I saw two news articles, both attributed to the Finance Minister Abul Maal Abdul Muhith that said, "Muhith admits government failure to end corruption" and "Americans are of no use to Bangladesh".

The truth coming out from the minister was so refreshing that I thought I should congratulate him and urge him to get rest of the power-brokers to start to practice a little more truth-telling. Since I will never be able to get to him, this rant is my aforementioned congratulations.

Let us start with, "Americans are of no use to Bangladesh" comment.

The Finance Minister was making the comment after a high profile visit by the President of Export Import Bank (EX-IM) of the USA, Fred Hochberg. A truer statement has not been made by any government official in some time.

Lately, Bangladeshi business and officialdom have been lamenting the lack of action by the US for the restoration of GSP and a lack of Foreign Direct Investment (FDI). I think the Bangladesh government and business class labour are under a profound misconception as to how the American system works and who it works for.

This lack of understanding results in false and misguided expectations resulting in disappointment and resentment.

Let us look at EX-IM Bank.

This is no Bank at all. It is the official export credit agency of the US government. They finance projects that benefit US companies and/or US strategic interests. They are famous for funding the construction of Burma Road which runs from Kunming to Rangoon.

The goal of the organisation is to provide credit to US exporters who sell to foreign countries and companies whose credit is too risky. The EX-IM bank comes into play only if private sector banks are unable and/or unwilling to provide credit facilities to US exporters.

There is intense disagreement as to the net benefit derived from EX-IM Bank. EX-IM bank is a hapless political football in the rough and tumble world of US politics. Its authorisation was denied by the US Congress on July 1, 2015, drying up its funds for new projects.

The Libertarian wing of the Republican Party portrays the EX-IM Bank as a pillar of crony capitalism. The left-wingers portray the Bank as propping big companies like General Electric and IBM.

So, at the end of the day this profound sounding institution is of no use to anyone. Just another entry into the fraud, abuse, and incompetence column of the well-intentioned but FUBAR US balance sheet.

On December 4, 2015, Barack Obama was able to reauthorise the Bank through September 2019. However, the reauthorisation had to be tucked into a must pass Transportation Bill. So, much for the Paper Tiger and its ability to get FDI for countries like Bangladesh.

The honourable Finance Minister is right. Americans are of no use to Bangladesh. At least not these types of Americans.

These US government employees travel around the world, sprinkle magic dust of hope and falsehoods, and they then take their cushy retirements to some Think Tank in the Washington beltway.

There is of course another whole segment of America and the rest of the developed world that could be involved in Bangladesh in the form of FDI and other enterprise. That is the private sector driven by profit motive.

Now the other comment by the finance minister, "Government has failed to end corruption", comes into play. This statement is somewhat depressing but then again, we should jump for joy because it is truthful. The government, nay society, has failed to end or even confront corruption in a meaningful way.

As of January 27, 2016, Transparency International's report ranks Bangladesh 139th in the Corruption Perception Index (CPI). That ranking is below such paragons of thievery as Ukraine, Nigeria, Paraguay, Nepal, and Pakistan.

Obviously, the recovery and repair of any malfunction depends on first acknowledging that a problem exists. Until now the Bangladeshi officialdom has simply refused to accept that corruption is a problem in all spheres in Bangladesh.

Most famously, when the World Bank pulled out of the Padma Bridge construction funding, the powers that be, from the Prime Minister on down, went on a frothy blather about how there is no corruption in Bangladesh.

The state minister who finally left the office maintained the "no corruption" myth, when all the while his cohorts in the Canadian firm that rigged the bid for his 10% were prosecuted and finally imprisoned. Therefore, it is refreshing the finance minister acknowledged defeat in the fight with corruption.

There are ways to reduce the effect of corruption and start the long process of recovery and healing.

First and foremost is transparency in all transactions. Transparency will loosen the grip of the vested interests somewhat. However, it will not throttle it unless there is real political will. Let us focus on Transparency for a minute.

Recently there has been protests by various councilors and party members about the way Dhaka North mayor allocated various projects. One such Party apparatchik said, "The Mayor gave many of these contracts by using e-tender and even to BNP members".

The implicit complaint is that there should be no open electronic tenders and the contract work should only be allocated to the ruling party members. Right there is the root of most of the issues with corruption.

Even if technology is available the vested interests will try to block the deployment of technology that will invariably lead to transparency. There is a sense of entitlement and a lot of Bangladesh's politics is tied into the contracts, tenders, and the sharing of loot.

I have known people who are remarkably unapologetic about dipping into the public well as part of their due. The reason the country is stuck in the bottom part of the CPI (Corruption Perception Index) has to do with these structural and societal constructs. I think the change has to be generational.

However, a good step would be to mandate that all public works and contracts must be allocated online and there must be public progress report on the progress of the funds and disbursement of money.

Once again, I stand with Abul Maal. How can you not be, especially for someone with a name like that? However, all kidding aside he has taken a small step towards acknowledging the deep -seated structural problems with Bangladesh.

This will, hopefully, accelerate transparency which will be followed by FDI and a steady march towards being a truly middle income country.