50Yrs of Bangladesh: Cronyism raising inequality
Despite progress in various economic and human development indicators, crony capitalism or cronyism is growing in Bangladesh as a few powerful members of the business class, bureaucrats, and politicians exercise a monopoly power in areas controlled by the state, resulting in rising inequality.
At the same time, shrinking democratic space, characterised by marginalisation of political opposition, intolerance of non-sanctioned political activities compared to the period of Bangladesh's independence, are thwarting the aspiration for an inclusive, humane society set during the Liberation War.
Economists expressed these observations at a session titled "Towards a just society" of a virtual international conference to reflect on 50 years of Bangladesh's independence.
Centre for Policy Dialogue (CPD) in collaboration with South Asia Program of Cornell University organised the event that began on Monday.
MM Akash, professor and chairman of Department of Economics at Dhaka University, said Bangladesh's progress is termed "a surprise example of development" in terms of high growth and a few key indicators of human development.
"But we observe that there were very large negative deviations from our Liberation War ideals enshrined in the original 1972 constitution of the country. We have become a more unequal and a more divided nation economically, communally, and politically."
He said Bangladesh has now a more unequal society in terms of income, wealth and social power and security.
The DU teacher said access to quality education, quality health services, cheap and adequate finance, employment opportunities and democratic fundamental rights as described in detail in the constitution remain largely unrealised for majority of the citizens from the lower rungs of the society.
Akash said Bangladesh's Liberation War was mainly directed against regional and class inequality.
These inequalities arose through the twin process of resource transfer from Eastern zone of Pakistan to the Western zone and monopoly exploitation by a small elite group, he said, citing 22 super rich houses of the then Pakistan.
"Almost a similar pyramidal power structure is fast growing in Bangladesh," he said, "The system is known as crony capitalism, where cronies flock together and use the state monopoly power to serve each other -- cronies generally constitute a ruling class based on a triangular coalition."
He said a few handpicked powerful members of the business class, bureaucrats and politicians create a network and through their recruited clients exercise a monopoly power in all areas of the ongoing development processes.
"The structural dynamics of such a nexus of economic, political and state power perpetuates inequity and inequality in all the fields of development," said Akash.
He said the current development process in Bangladesh enables in general a more or less absolute development of all classes, but with a very unequal speed and therefore, relative inequality continues to rise which is now generally recognised to be non-sustainable in the long run.
There cannot be growth with equalities in Bangladesh unless cronyism is broken and a broad based political regime is established, he added.
Hossain Zillur Rahman, executive chairman of Power and Participation Research Centre (PPRC), said although economic development has stunned many, there has not been much political development.
This deficit in political development is holding Bangladesh back from realising its foundational dream of building an inclusive and humane society, he said.
Zillur said systematic weakening of political accountability, encroachment into social space, extreme intolerance of non-sanctioned political activities and corruption created a "new normal" of political governance.
The consequence is, he said, there is an extraordinary sense of official complacency on development performance and disregard for reform priorities. "There is an elitist over focus on growth at the expense of quality of life."
Dr Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), said monopolisation of political space is most important predicament against democratic and accountable governance.
"Institutions of democracy and national agencies such as Election Commission, administration, law enforcement agencies and Anti-Corruption Commission have been significantly politicised and their effectiveness compromised, presenting governance deficits and a culture of impunity," he said.
Any criticism of the government and exercise of constitutionally guaranteed freedom of expression and dissenting views is branded as aligned to the enemy camp and conspiracy against regime, he said.
Binayak Sen, director general of Bangladesh Institute of Development Studies (BIDS), in his paper said non-farm occupation, education, ownership of cultivable and non-farm land, household size, savings and remittance had been the drivers that enabled people to get out of poverty in rural areas.
SR Osmani, professor of developmental economics at the Ulster University, said Latin American countries could reduce inequality through concerted efforts. The nations there could cut inequality by ensuring broad based access to quality education and vast programme of cash transfers.
It was followed by all regimes, he said, adding that countries with better democracy reduced inequality.