As far as I know, this blog is the only place that publicly criticised the appointment of Dr Atiur Rahman as the Governor of Bangladesh. How has he performed in the last few years as the central banker? Given the share market bubble and crash and several controversial developments — scams, ‘political’ banks, l’affaire Yunus – in the banking sector, it’s reasonably straighforward that he has failed in his task of maintaining financial stability. On the other hand, Bangladeshi economy has shown remarkable resilience — growth has been steady around the 6% mark despite shocks such as the share market crash or the fiscal strains related to the rental power plants. Inflation has been much higher than the Bank’s target picked up during most of the governor’s term, but has subsided recently to be within the Bank’s target (see the chart of inflation through the year, actual vs Bangladesh Bank target – source: CEIC Asia and BB).
So, on balance, a mixed record for the Governor so far. And over the next few months, his record can swing either way. Unfortunately, the latest monetary policy statement suggests that there is a high risk that my fears about him will yet come true.
All About Eve, the Oscar-winner in 1950, is a drama set in the black-and-white era Broadway. It shows how the seemingly innocent Eve Harrington (Anne Baxter) connives, deceives and manipulates people and event to eclipse the ageing star Margo Channing (Bette Davis). In her quest, Eve is initially assisted by the theatre critic Addison DeWitt (George Sanders). But before long, DeWitt makes it clear who calls the shot. Let me outsource to wiki to describe how the movie ends:
After the awards ceremony, Eve hands her award to Addison, skips a party in her honor, and returns home alone, where she encounters a young fan—a high-school girl—who has slipped into her apartment and fallen asleep. The young girl professes her adoration and begins at once to insinuate herself into Eve’s life, offering to pack Eve’s trunk for Hollywood and being accepted. “Phoebe” (Barbara Bates), as she calls herself, answers the door to find Addison returning with Eve’s award. In a revealing moment, the young girl flirts daringly with the older man. Addison hands over the award to Phoebe and leaves without entering. Phoebe then lies to Eve, telling her it was only a cab driver who dropped off the award. While Eve rests in the other room, Phoebe dons Eve’s elegant costume robe and poses in front of a multi-paned mirror, holding the award as if it were a crown. The mirrors transform Phoebe into multiple images of herself, and she bows regally, as if accepting the award to thunderous applause, while triumphant music plays.
You see, whether it is Margo or Eve or Phoebe — it’s Addison who makes or breaks the star. The question is, what makes Addison tick?
And more generally, what motivates the media?
It’s a common refrain amongst Bangladeshis of a certain age and socioeconomic background that “four decades of independence / two decades of democracy and we’ve got nothing”. When you point out that in terms of per capita income or life expectancy or most other measurable metric, things are much better in 2012 than they were in 1992 or 1972, the argument changes to “but we have fallen behind this, that or other country”. Then you point out that, for example, despite being half as rich as India, Bangladesh does better on a range of socioeconomic metrics, showing we have not fallen as much behind as they fear. When you do that, the last line of pessimism among these doomsayers is “ah, what about inequality’”.
Yes, inequality has risen in Bangladesh over the past decades. Is this a bad thing? Perhaps. Perhaps not. For example, when compared internationally, Bangladesh doesn’t apper so unequal. When discussing the subject, we need to explore why we think inequality has risen, and how we think it is affecting the society. There are strong grounds for possible concerns with rising inequality. Unfortunately, Rezwana Abed and my friend Syeed Ahamed make a rather poor argument about inequality in their latest Forum piece.
Last week I discussed non-development expenditure by Bangladesh government. This post is going to cover development expenditure. As usual, I’ll use a set of charts – like the posts on revenue and development expenditure, the data are from the Ministry of Finance and CEIC Asia.
Typically, the discussion on development expenditure in Bangladesh goes like this: the government (and its allies in the civil society and media) says “look, record annual development programme (ADP)”, while the opposition and skeptical pundits say “you never achieve your ADP target, and you’ll fail again this year”. Who’s right?