Looking back at the coup that dared not speak its name 2

Posted in economics, politics by jrahman on January 21, 2010

This is the second part of regular reader Tacit’s guest series on 1/11. Part 1 is here.

Here is an excerpt from a recent speech given by Barrister Rafiqul Huq:

Those who extorted tens of millions from businessmen have still kept those businessmen in their sights. The victims do not dare to complain because they know they are always followed.  They do not file cases, in fear of being picked up again and tortured. A few days ago, on my way out of the country, I met a businessman at the airport. He said that the Caretaker Government had extorted 350 Million Taka from him. He had been continuously tortured for fifteen days by the government before he agreed to give up the money. When I told him to file a case, he said he dared not in fear of being picked up again and tortured. A while after our conversation, a person identifying himself as DGFI called from that person in his cell phone, and told him he could come and take back the money if he wanted. There would be no problems.

The favorite tool used by the Caretaker Government to lock up politicians had been tax and property evasion cases. Audit someone’s property and tax return, find any discrepancy, and hand that person a fixed jail sentence. When the judiciary began to scuttle these cases for the ridiculous farces that they were, the Caretaker Government took the preemptive step of seizing people’s property even before any convict had been handed down against that person. As hideous as this practice was, there was an even uglier side to the attack on people’s property. Military agencies would bring business executives in and torture them to extort money from them. Some of this money was put in the slush fund for political manipulation; most of it was simply appropriated for personal use.

Unfortunately, the line between an individual and his property is often non-existent in Bangladesh. If any individual is not in favor with the prevalent power structure, his property is seen as up for grab. The most blatant example of this was the now defunct Vested Property Act, which was used to illegally take over the land and property of people of the Hindu community. The overturning of this law has been one of the signal successes of the current Awami League Government.

However, we need to examine and change our entire culture regarding respect of personal property. The significance of this matter cannot be overstated. The current state of the Bangladeshi economy can be described as unfettered capitalism, with natural and public resources available to private entrepreneurs at significantly discounted prices. There are many fortunes waiting to be made in our country. Whether this money is reinvested in Bangladesh or secreted away in numbered accounts in Caymans will depend on how we treat private property in the future.

To make a point by contrast, the United States is in the middle of a severe economic recession. One in ten Americans are unemployed. Amongst African-Americans, a constituency of natural importance to President Barack Obama, unemployment may be as high as one in three. This economic recession was one of the key factors that ensured the election of Barack Hussein Obama over John McCain, the son and grandson of decorated war veterans, and an authentic war hero himself.

Once Obama was elected, he channeled more than USD 700 Billion of government money into the mainly the finance and banking industry to buoy up the economy. It is hard to overstate how unpopular this move was; common people perceived taxpayer money going to save people whose perceived greed and shortsightedness had wrecked the economy in the first place.

However, the storm really hit when the public found out that executives of these companies had given themselves bonuses in the tens of millions of dollars from public money. At a time when the United States Congress has been forced to trim back the healthcare overhaul because of budgetary concerns, such irresponsibility made headlines all around the nation.

Electoral backlash was quick to follow. Republicans stemmed the Democratic ascendancy in 2009 midterm elections, and seem to have a good shot of taking back the House of Representatives next year. Senator Chris Dodd, the architect of the financial bailout in the Senate, has been forced not to run for reelection in the Senate seat he has held for thirty years. Massachussets, a Democrat stronghold and home of the Kennedy dynasty, has been lost. And Obama’s reelection looks more and more uncertain.

So, what is the point to all that?

Outraged at the bonuses that business executives were giving themselves, a 100% tax rate was proposed on these bonuses. Had this measure been put to a vote in America, it would have probably passed with more than 80% majority.

Nevertheless, such a measure was not adopted in the United States Congress. Such a measure was not adopted, because the United States Constitution does not allow a specific group to be given collective punishment in this manner, and this measure was not adopted because the United States, for all its faults, knows how capitalism works.

Bangladesh can be a prosperous country some day.  But it won’t be as long as we don’t appreciate the importance of property rights.

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  1. […] Looking back at the coup that dared not speak its name 3 Filed under: politics — jrahman @ 7:37 am Tags: 1/11 This is the third part of regular reader Tacit’s guest series on 1/11.  Part 1 and 2 are here and here. […]

  2. […] second post quotes Barrister Rafiqul Huq and discusses the impact of the so-called anti-corruption drive on the […]

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