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economy-bank 3Ever since independence, we have heard talk of how in the ‘60s South Korea was barely ahead of Pakistan, and Malaysian students used to come to Dhaka to get a medical education. In the ‘80s, Singapore and Taiwan were added to the list of the countries to envy. In the ‘90s, China and Thailand made the list. This past decade, we have watched with wonder the growth of India and Vietnam.

Now, for something new: The Economist just predicted 14 percent growth for Ghana next year. In the latest UNHD report, Bangladesh ranks one spot ahead of Ghana. If they continue to make better policies and take better actions, they could well race ahead of us someday.

As a nation, we aspire to the amazing growth levels of the Tiger economies. But do our deep-seated attitudes, and the consequent policies, support that kind of ambition?

What do countries that enjoyed transformational growth have in common, considering that they display great diversity in their political and economic orders? Our East Asian neighbours range from one-party autocracies to stable democracies. Economically, most of these countries have embraced free-market economies, but they have interpreted “free-market” in quite divergent manners. Also, while double-digit growth was thought to be the provenance of autocracies, now stable democracies like India — even Ghana — are starting to match that kind of attainment.

Clearly, neither autocracies nor democracies have a singular claim as a pre-condition of economic quantum leap. Nor is some narrowly defined free-market model the silver bullet. So, what do these countries have in common?

On close inspection, the Tiger economies seem to yield three points of convergence. No matter how imperfect their political system, most of them are politically not as unstable as we are (recent Thai kerfuffle being an exception). Despite variously tweaking the free-market models, they have supported and allowed private enterprise – from giant corporations to the tiniest start-ups or rural outfits – to become the primary engine of their amazing growth. Finally, they have also been far more competent at implementing large-scale public projects.

It must also be noted that many of the comparison countries ranked poorly in corruption perception when they began their turnaround. So, while corruption is certainly no asset, it alone does not necessarily have to hold back growth. Rather, in many cases, as a country became more prosperous, a larger middle-class often aided the process of making governments more democratic, transparent and accountable.

Facing several problems, especially ones locked in a vicious circle, one would do well to tackle the ones that are easier to solve. Promoting a more stable political order or curbing corruption both require a kind of political will and risk-taking that is not easy to muster. So then, what about unleashing private enterprise and getting better at “getting-things-done”?

These two factors – unleashing enterprise and getting-things-done – should be immensely attractive as priorities to a political leadership.  Even marginal success on either front stands to boost a party’s political capital. Governments rarely get voted out if they are shepherding a booming growth, and creating jobs at an unprecedented pace.

The current government has in fact stated both its support for private sector growth, and also for building large and vitally necessary infrastructure. One is encouraged, for example, to see many new power projects getting implemented. Yet, we need to raise the capability and motivation of the bureaucracy when it comes to getting-things-done.

In addition to the slow progress of infrastructure, what worries many local investors is an environment where the private sector can still become the target of hostile rhetoric and policies with far too much ease. The government has recently passed several new laws – e.g., for telecom, housing and private universities – that run contrary to the spirit of fostering enterprise. The laws, excessively focused on curbing alleged perfidies of each sector, have managed to throw the baby out with the bathwater.

It is not hard to calibrate better between necessary oversight and rightful autonomies of the private sector. This vital need is hampered by the very manner in which our laws are made. Bureaucrats, intent on maximising their control, rather than fair distribution of powers and rights to various stakeholders, have too much say in the process. Also, the process allows an unbalanced voice to anointed experts and activists. Many so-called experts, despite lacking real depth on issues, often enjoy outsize importance both in law-making and in public discourse.

Politicians and bureaucrats do note operate in a cultural vacuum. Damaging regulations or interventions are made possible in part by a media and public that enjoy the take-down of anyone or anything big. This kind of attitude is partly responsible for a culture that not only permits but even welcomes over — and unfair regulation (especially as long as it is affecting others). While everyone enjoys rise-and-fall narratives, in the successful economies the private sector overall also enjoys great public admiration and a far more stable and fair regulatory regime. In the absence of such supports, our excessive excoriations or over-regulation of the private sector can be demoralising to many investors.

It is not going to be easy to readily match the successful economies on many indices: political stability; reduced corruption; efficient roads-ports-and-power, etc. By comparison, our policy- and opinion-leaders could herald a change in attitude when it comes to regulatory stability and unwarranted denigration of the private sector. It must be emphasised here that when we speak of enterprise, we must not imagine only the big companies. One must absolutely find ways to promote the smaller enterprises, who could well become the largest employers of a transformed economy.

A thought-climate like ours prevailed even in next-door India till the late ‘80s. Since a mindset and policy shift, led first by a leader like Narasimha Rao, India has been hitting ever higher rates of growth. Not a single Tiger economy became transformed because their government-held companies or NGO’s became big. China and India have both lifted more people out of poverty, once they embraced an enterprise culture, than they did during their respective communist or socialist periods.

The government can set policies to speed up or retard growth. Ghana’s growth next year will be led by natural resource extraction. While this is not the same as the manufacture and export-led rise of the East Asian Tigers, they are displaying bold decision-making that fosters growth. We are still debating whether we should mine coal at all, not what is the least damaging way to do it.

Judging by the harsh policies and rhetoric that still abound in this country, it is not clear if we have either learned or accepted the real lessons of the Tiger economies that we so admire. If we really wish to grow and reach a dignified status as a nation, and not settle for pats on the back for piecemeal “development”, we need not only better policies but also a different attitude. Until we start making mindset and policy changes that are more consistent with our ostensible dreams, get ready to envy Ghana in 10 years.

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K. Anis Ahmed is vice-president of the University of Liberal Arts Bangladesh.

10 Responses to “Unleashing enterprise”

  1. Shuvo

    Be aware, our finance minister may sue you tomorrow. What do you know? You know nothing. Our politicians know everything and they might even claim that you are trying to jeopardise…errr maybe “the war-crimes tribunal”.

  2. Mannan

    A timely article but unfortunately may get wasted as most of our policymakers either come from a different planet or doesn’t have any cue about the reality.

  3. Firoz Alam

    “We are still debating whether we should mine coal at all, not what is the least damaging way to do it;” – it’s really a matter of pity that our opinions and actions cannot converge on what is good for the country; opposing only for the sake of displaying a different stand has proven fatal for the country’s economy. The so-called experts and environmentalists in favour of a closed economy should remember that non participation in a game not only wipes out the possibility of losing a game but also eliminates any chance of winning it. My heartfelt thanks to the author for the thought-provoking article; now let’s only hope and pray that our policymakers start taking into considerations such opinions and suggestions.

  4. Sabbir

    The main problem of Bangladesh is we do not try to upgrade ourselves. We were so proud of our golden fiber that we didn’t bother carrying out further research on jute. And what’s the outcome? We had slide out of the market. Thankfully, we have started to upgrade jute products and began gaining some market value. We have to continue upgrading ourselves. And the process should start with our politicians.

  5. Sharif Rahman

    A thought-provoking article. Something the policymakers should not ignore.

  6. Golam Arshad

    You are right … ” not only better policies but also a different attitude” is required to upgrade our economy. Primate sector deserves our salutation, for doing a wonderful job! Bangladesh will be marking its position in reaching the higher ladder of economic success! Thanks for your magnificent observation!!

  7. Saad

    What you say is sensible, however, the people in power will never listen to you, which is the main obstacle to the betterment of our economy.

  8. Nasim

    Interesting article, but I think the private sector also has often not acquitted itself particularly well in demonstrating effective self regulation or restraint, a la developers run amok or telecos running massive VOIP operations . This kind of behaviour makes us the private sector an easy target . Would have liked to see a bit more on that as to why we fail to condemn and punish violators amongst us instead of denial and indifference .

  9. Kabir Khan

    A nice and very thoughtful piece. We need more cross-country non-superficial articles like this.

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