Fri 9 May 2008
“What is exercising me is not the identity of our next PM or his or her government. Well before the aborted 2007 election, I said we should ignore the election and focus on the following one (then slated for 2012). I continue in that belief that we should focus on the election after next (assuming we have one this winter)…What I mean by that is not the identity of the future winner, but the basis on which our political debate will be conducted in the future. The victor of the election this winter will have hell to pay. The new regime will not be able to control the country. Two years into its tenure, it will be in crisis. For those who have greater ambitions for this country I would suggest minimising the debate about who will be PM in Dhaka come March 2009. Rather, I would ask for a radical overhaul in the terms of the debate about national development. For those exercised about protecting resources such as gas and coal, an equivalent “committee” to protect the small farmer and landless is needed. While some doubt where the money will come from, I prefer to ask, where is the money going?”
Read the whole write up by Farid Bakht where he asks the political agenda to move to the left and learn from Nepal.
May 12th, 2008 at 11:59 am
Sorry not to see more discussion on this thread. This was really a refreshing read at a time when everyone is happy to substitute analysis for horserace predictions about the elections (ie. will they or won’t they happen).
I read this a while back, so here’s what remained with me:
“They view the rapid growth in urbanisation as a sign of success, another excuse to move to “modern” thinking. That view does not see the forced migration by landless labourers to filthy, crowded slums as a failure. This is compounded by the attack on rickshaw pullers for blocking “their roads.” Thus, we complete the circle by demolishing slums, restricting rickshaws, and beautifying the city.”
So, so true no matter who is in power.
“Would it not be just if the uprooted labourer-turned-migrant were to support his compatriots by sending some of his riyals, euros, and dollars into a Fund for Small Farmers?”
Amazing dream that alliance between migrants and the farmers they leave behind. But isn’t the specifics of this proposal just taxing the rural elite (who can afford to send their people abroad) to support the rural poor? Isn’t sending remittances enough, do we have to tax that too?
The kneejerk anti-WB-IMF reactions isn’t to my taste, but it would be nice to know a bit more about the dismantling of our own food buffer system.
May 14th, 2008 at 6:35 pm
Farid writes:
With remittances at record levels, who is deciding how those billions are being used? How much is being used to import products for the urban consumer or subsidise the city? What proportion is being invested, if at all, and how much in rural areas?
Has anyone talked about setting up a rice procurement fund for the small farmer?
Farid, can you elaborate a bit more on this rice procurement fund idea or any other such projects surrounding rural areas. I saw the news today on DS about this new town next to Dhaka which costs 21000 million taka and thought about this article. How much more would we have gotten had we invested the money in the rural areas? Yes, we need to change the debate radically. None of current and past players seem likely to change the debate though.
This is where the money is going…see link.
http://www.thedailystar.net/story.php?nid=36603
May 14th, 2008 at 9:44 pm
Q: With remittances at record levels, who is deciding how those billions are being used?
A: The receipient families of the workers abroad are deciding how those billions are being spent. Perhaps the writer is confusing remittances with the petro dollar reserves of the middle eastern countries where the government often holds the claim to oil receipts. In Bangladesh, families hold claim to remittances.
Q: How much is being used to import products for the urban consumer or subsidise the city?
A: Given that most of the workers abroad are not from the major cities, my guess is that only a portion is being spent by the urban consumers. The question of subsidizing the city sounds a bit odd!
Q: What proportion is being invested, if at all, and how much in rural areas?
A: If we assume the national average, for every 100 taka, about 30 taka is saved and invested. For workers abroad from the rural areas, perhaps a lower proportion is saved and invested because the consumption needs of their families might be higher than national average.
May 15th, 2008 at 11:53 am
Our migrants earn foreign exchange abroad. When they send money home,
that foreign exchange (riyals, dollars, sterling) ends up in
Bangladesh Bank. This Central Bank then provides an equivalent amount
in Taka which then arrives in a local bank branch in Sylhet etc..
While everyone talks about the Taka being (mis)spent, I am referring
to the foreign exchange.
Bangladesh Bank (via advice from the Finance Ministry and IMF….)
allocate those dollars. Usually to pay for imports.
My issue is that those dollars could be used wisely - investment,
rather than luxury consumption….
For example, if we reduced less desirable imports (through higher
duties or restrictions), and instead used those dollars to import 3 MW
gas generators etc, we could provide more electricity, quickly and in
small towns without recourse to large IPPs on onerous contracts.. Etc
Etc etc.
Or pay for engineers to build a bridge… rather than asking for
another aid project…..
or buy rice for warehouses to distribute to poor landless in return
for work (rather than another hand out frmo WFP).. etc etc
The point is the migrants are not only helping their families improve
their lives (for housing, education, further migration and therefore
getting a job, etc), they are also shoring up the foreign exchange
reserves of Bangladesh.
In that respect, migrants offer far more than the ready made garment
industry - whose headline figure of say $8 billion exports masks the
$5 billion that goes straight out again in imports of cloth, etc etc).
Of course, if migrants send via hundi, the dollars do not get into
Bangladesh……
The use of foreign exchange is crucial.
As for a fund, this is my point about asking where the money is going.
If we were wisely allocating domestic or foreign money, this would be
legitimate. But we are not. Think of all the subsidies and unnecessary
urban projects spent over the years. Add corruption on top and you get
the picture.
Of course, the country is poor but we are not using what we have wisely.
Effectively, all the political debates are about whether it is
Dhanmondi or Banani that wins. The urban (and wastedul, non industrial
) bias means we think we are developing but we are ignoring the vast
majority of the population.
Re: migrants and settlers……think about this…For a long time, I
have advocated that the Government of bangladesh should offer a
Farmer’s development fund.
i.e. a bond of say $200 million a year that would be offered to
migrants abroad at an attractive coupon (interest). This money would
then automatically go to a rice procurement fund to buy paddy (not
processed rice - will explain another time). Thus, migrants would be
able to save - they don’t all send it for weddings and farmers would
benefit.
Yes, yes, we can always talk about corruption but that’s a great
excuse to do nothing (as if there is no corruption in China or
Taiwan……)
We can refine these kinds of ideas.
BTW, we do not need to tax rural elites as someone responded. That’s
the last thing we should do.
The point is that we need to be more imaginative and not let all Dhaka
governments rip off migrants and settlers - take the money and offer
nothing in return…
We cannot keep ignoring a sector that employs 60% of the people. The
safety valve has been to send the unemployed landless abroad, to
prevent an explosion. But the numbers remaining are huge and growing,
despite the exodus. If we really care about the future of the country,
then we have to come up with some long term answers. Number one is how
we develop the rural and agricultural sector - the true engine of the
economy.
Limiting our debate to which family is going to get power is actually
(a) pretty pointless (b) shows we are being played the fool….
May 18th, 2008 at 1:40 pm
Just to be absolutely clear, I wasn’t proposing taxing the rural elite any more than you were.
Sounds like your proposal could be achieved through to removing foreign exchange restrictions that are now has in place. That way a farmer can spend as much Taka as s/he wants and as many dollars as s/he wants. Or are there more pressing collective action problems you wanted to solve through a Fund?