Looking beyond the good economic news in Bangladesh

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Bangladesh’s economy will continue its high growth into 2020 according to the World Bank, the International Monetary Fund and the Asian Development Bank. This comforts the government, serving as a morale booster for the ruling Awami League (AL). AL is being criticised for their part in the questionable December 2018 election, widely described by global commentators as ‘farcical’.

Although these economic forecasts are lower than the Bangladeshi government’s own estimates, the widely agreed growth of above 7 per cent is still impressive. The country is one of the fastest growing economies in the world.

But positive reports were accompanied with warnings that the government and its supporters are barely mentioning. The country’s banking sector is facing a serious crisis. A key vulnerability that the World Bank stresses is the growing amount of non-performing loans (NPLs).

The amount of NPLs in June 2018 reached US$10.8 billion — 10.5 per cent of all outstanding loans in the economy. And it continues to grow. It appears the banking sector has become a hostage to defaulters. And instead of going after defaulters, the government is pouring money into the banking sector, repeatedly offering bail-outs and allowing banks to reschedule loans at lower interest rates.

The government’s lenient attitude is due to many defaulters being well connected. Political connections are also often the reason behind the loans’ approvals in the first place. Similar considerations dictate the debt rescheduling occurring for loans unlikely to ever be repaid. Despite the poor performance of those established private commercial banks that were approved under political consideration, three more were approved in February. This is classic cronyism.

Banking sector issues are only symptomatic of the overall flawed governance system. Rampant corruption and the absence of the rule of law have become the norm — getting away with anything is possible given connections to the ruling party and its leaders.

The Election Commission, local administrations and law enforcement agencies all helped deliver victory for the incumbent AL during the last national elections, meaning voters have become dismayed with the electoral system. Extraordinarily low voter turnouts in the Dhaka North City Corporation mayoral election held on 28 February and in the on-going upazila sub-district elections are demonstrating that citizens’ confidence in elections has been shattered.

This did not happen by accident, but by design. A concerted effort to depoliticise society and make all institutions ineffective helps the AL tighten its grip and amass more power. It is unsurprising that Prime Minister Sheikh Hasina has suggested that reviving the one-party system, introduced in 1975 by her father Sheikh Mujibur Rahman, offers a solution to the elections-without-voters problem.

There is a mood of resignation and powerlessness among Bangladeshis. Misdeeds that previously provoked protests and moral outrage are increasingly accepted as the way it is. Legal system abuse and the government’s frequent extralegal use of measures to quell dissent have sent a message. The failure of the opposition, in particular the Bangladesh Nationalist Party (BNP), to reorganise itself and challenge the government’s growing authoritarian tendencies are a source of frustration.

The BNP rejected the election results and publicly stated that its elected members — only six — will not join the parliament. But two opposition parliamentarians of the Jatiya Oikya Front’s minor Gano Forum party have since broken rank, posing questions over whether others are also tempted to fall in line.

Dhaka’s air is thick with a rumour that a deal between the BNP and the government is in the making. It would involve the BNP chief Khaleda Zia being allowed medical treatment parole in exchange for those six BNP members joining parliament.

But the BNP has trashed that rumour. Zia has been jailed since February 2018 after being convicted in two cases of graft, while 34 other cases are pending. As her health deteriorates in Dhaka Central Jail, her lawyers’ efforts to secure bail for these cases have allegedly been blocked by the government, although the government claims that it has no hands in the judicial process.

Despite securing an unprecedented victory and having the participation of 344 out of 350 parliamentarians, the ruling party still feels that it needs these six boycotting members in to provide moral legitimacy to the parliament and the seemingly managed national election.

Whether wanting to bring the BNP into the parliament is due to external pressure or because of anxiety within the ruling party is an open question. But there is no denying that the election and the degenerating style of democracy have engendered concern among Bangladeshis. Simmering discontent over governance is finding itself expressed through sporadic grassroots non-partisan social movements as well as labour unrest.

Separate mass protests viewed together paint a larger picture of popular agitation, including garment workers in January, the second road safety movement in March, the ongoing unrest in the jute mill sector, and protests at Dhaka University. More is likely to follow.

These are yet to pose a serious challenge to the government but represent the growing popular discontent against the lack of transparency and accountability occurring in Bangladesh.
Source: https://www.eastasiaforum.org

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