Mukti

On hartal

Posted in economics, politics by jrahman on June 27, 2010

This blog is philosophically opposed to hartal.  As my friend Tacit put it in a private conversation:

The only Hartal that is even semi-tolerable is when the people calling the hartal stay home themselves, and don’t go around organizing protests or burning vehicles.  As much as possible, people should be able to make their own choice about whether to stay home and go about their daily activities.  And if they go about their daily activities, they should not be hindered in any way.

I agree with Tacit’s sentiments (updated over the fold).  Needless to say, I don’t expect BNP to adhere to the above any more than the Awami League did in the past.  Therefore, I don’t support today’s hartal. 

That said, I am not sure the oft-repeated chorus of ‘hartal damages the economy’ is at all supported by the data. 

This is a chart of growth in the 3-months of manufacturing output over the previous three months.  That is, the value in Dec 09 refers to the growth in manufacturing from Oct-Dec 09 compared with July-Sep 09.  If hartals really damaged our economy, then periods of hartals would be associated with large falls in this series.

In the chart, four periods of extensive hartals are marked in grey bars: Dec 95 to Mar 96, marking the AL-Jamaat-JP caretaker government movement; Feb 00, when BNP called a series of hartals for some reason I don’t remember; Aug-Sep 04, after the assassination attempt on the AL chief; and Oct 06 to Jan 07, for the events leading upto 1/11. 

Evidently, hartals don’t matter for manufacturing!

Data source: CEIC Asia.

Update 29 June 2.02pm BDT

Tacit writes:

(There is a) power asymmetry between a pro-hartal picketer and an ordinary citizen just trying to earn his daily income. When the vast majority of people in Dhaka live day-to-day on their income, it is unconscionable for a political party to stop them from making a living. … But when you have the police and the RAB out in the streets beating up BNP workers and lawmakers, and going into private homes and attacking innocent women and children, the power asymmetry now heavily favors the state. …  yes, by all means let’s oppose hartals, but let’s keep in mind that such a stance only covers one side of the story.

This blog endorses the sentiment in full.

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16 Responses

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  1. tacit said, on June 29, 2010 at 1:23 am

    Ah, Jyoti Bhai, now that I have been quoted in Mukti, I can retire from the world of online blogging. Surely, it’s all downhill from here on.

    If I may, let me put my comment in perspective. The conversation was about the wisdom of making calls for banning hartals, and I laid down the parameters under which the entity calling the hartal, in this case the BNP, should behave. You have to keep in mind here the power asymmetry between a pro-hartal picketer and an ordinary citizen just trying to earn his daily income. When the vast majority of people in Dhaka live day-to-day on their income, it is unconscionable for a political party to stop them from making a living. There is currently an enginner of the PWD battling death due to the injuries suffered by attacks from pro-Hartal picketers. This is exactly the sort of incident I condemn; it is criminal and in this instance, this person should have been protected by our state and the people attacking him arrested.

    But when you have the police and the RAB out in the streets beating up BNP workers and lawmakers, and going into private homes and attacking innocent women and children, the power asymmetry now heavily favors the state. Shamsher Mubin Chowdhury lost his leg in 1971; Sheikh Mujib personally gave him the gallantry medal. Till today, he walks around with a cane. What can be the excuse for arresting him and then sending him to remand?

    I oppose terrorism and the attack on innocent civilians, and I also know that Israel’s actions in Palestine, in which a military attacks a civilian population, is a crime of great magnitude. So, yes, by all means let’s oppose hartals, but let’s keep in mind that such a stance only covers one side of the story.

    • jrahman said, on June 29, 2010 at 2:01 pm

      T, I agree with the broader comment, and have put it in the body of the text, thereby disproving your first sentence. 🙂

  2. Diganta said, on June 29, 2010 at 1:24 pm

    wonderful article …

  3. Syeed said, on June 30, 2010 at 7:31 am

    Jyoti,
    I’m sorry to say, but it’s a badly delivered red herring.

    I wonder how a macro-economist conclude that “hartals don’t matter for manufacturing” just looking at a chart without taking into account any other variables that could influence the production.

    It would be like taking three-monthly casualty data from hospitals and then juxtaposing them with Hartals to prove that–“notwithstanding opposition’s claim for attacks, hartals don’t matter for casualty”.

    Manufacturing accounts for about 17 percent of our GDP, whereas Services accounts for 48 to 50 percent of our economy. This includes wholesale & retail trade’s 14 percent and transport & communication’s 10percent.

    If you look at the sub-categories of Services, you will know that these are the sectors remain closed on a Hartal day. A manufacturing industry may remain open on a hartal day, but it’s the transport that remains closed. Without addressing this real sub-sectors, using “manufacturing” to respond to the hypothesis “hartal damages the economy” is misleading.

    • jrahman said, on June 30, 2010 at 8:06 am

      If you see a badly delivered red herring, it’s because you are chasing a strawman.
      I didn’t say ‘hartals don’t matter for the economy’. I said ‘hartals don’t matter for manufacturing’.

      Leaving aside a debate about ‘what you think I said’ vs ‘what I actually said’, you do make a good point about services. Now, one can have a bunch of conjectures about services. For example, trade or transport could have a ‘bounce back’ effect or ‘bring forward’ effect that smooths any impact of hartal — if I know there will be a hartal 2 weeks from now, I can do my grocery before the hartal, or if there is a 3-day long hartal, I can go to my village for a ‘hartal vacation’. Now, I am not aware of any high frequency data that quantify the effect of hartal on services. Happy to be enlightened.

      Of course, ‘absence of evidence’ is not ‘evidence of absence’. But based on the data that we do have, I am still not sure the oft-repeated chorus of ‘hartal damages the economy’ is supported.

      • Syeed said, on June 30, 2010 at 9:44 am

        1.
        While I don’t want to debate ‘who said what’, a correction is due. I didn’t say that you said “hartals don’t matter for the economy”. To recap, my two arguments were-

        a. Your argument on “hartals don’t matter for manufacturing” doesn’t make sense when other variables that influence production are ignored.

        b. Without addressing the real sub-sectors, using “manufacturing” to RESPOND TO the hypothesis “hartal damages the economy” is misleading.

        Apparently, you are putting words in my mouth and then responding to that. Wonder who’s chasing the straw man 🙂 So yes, let’s leave aside the debate about ‘what you think I said’ vs ‘what I actually said’.

        2.
        Yet, you again conclude “based on the data that we do have, I am still not sure the oft-repeated chorus of ‘hartal damages the economy’ is supported.” You don’t even have data to support your conclusion on “economy”– that’s only manufacturing. So I can only agree to your own words– ‘absence of evidence’ is not ‘evidence of absence’.

        3.
        You made a very good point re the ‘bounce back’ or ‘bring forward’ effect. This may be possible in manufacturing. But our service sector has a capacity issue and not sure if extra earnings of non-hartal days compensate the earnings of hartal-days.

        4.
        You didn’t talk about the impact on income inequality, so my forth point here is not against your post. Just adding it since I think its relevant.
        According to HIES 2005, 47.6 percent people in urban areas live under the poverty line. 26.3 percent people live under the hard-core poverty line. So we have data on per-capita earnings of poor people who live hand to mouth. ‘Bounce back’ or ‘bring forward’ effects may be helpful for manufacturing– but not for the people whose daily earnings are as good as a day’s survival.

        Hence, I wonder how hartal affects income inequality.

      • jrahman said, on June 30, 2010 at 10:05 am

        1a. To formally account for all the other factors, we need to run a regression. But just looking at the chart and making a judgment call with my macroeconomist hat on, I’d hazard a guess that such a regression will find statistically insignificant impact of hartal on manufacturing output.

        1b/2. I guess it’s a case of looking for the keys under the lamppost because that’s where the light is. There is a hypothesis that can’t be disproved in entirety because we don’t have the data, but the data that we do have suggest that at least for a small but non-trivial part of the economy, the hypothesis is not supported.

        3. Yes, there is a service sector capacity issue: if half of Dhaka wants to go to the village, there simply aren’t enough buses. But the point raised earlier about the lack of data remains.

        4. Hartal affects the urban poor disproportionately — there is no question about it. I don’t need data to be convinced of that. And to the extent that the politics of hartal (not just the latest, but any) usually has nothing to do with policies that can improve the life of urban poor, forcing them to suffer is plain wrong. That’s one of the reason this blog is philosophically opposed to hartal, as explicitly stated in the post.

  4. Syeed said, on June 30, 2010 at 10:59 am

    For manufacturing- ‘bounce back’ or ‘bring forward’ effect is not an issue since most of the industries remain open during hartal. I don’t know how factual Kaler Kantha’s following news is, but I lived near Dhaka’s manufacturing areas long enough and now have enough friends working there to know that, manufacturing industries to remain open during hartal- hence no impact on them.

    Kaler Kantha for some unknown reason do not provide permanent URL, hence copy-pasting some part of their 28 June 2010 report–

    শ্রীপুরের মাস্টারবাড়ী শিল্প এলাকায় সকাল ১১টার দিকে গিয়ে দেখা যায়, সেখানকার বেশির ভাগ কারখানায়ই কাজ চলছে। এলাকায় বিএনপির কেন্দ্রীয় নেতা এবং সাবেক বিদ্যুৎ প্রতিমন্ত্রী ইকবাল হাসান মাহমুদের মালিকানাধীন তিনটি কারখানা অ্যাপেক্স জার্সি, অনটেক্স, অ্যাপেক্স নিট পুরোদমে সচল ছিল। গত নির্বাচনে ব্রাহ্মণবাড়িয়ার বাঞ্ছারামপুর থেকে বিএনপির প্রার্থী হিসেবে প্রতিদ্বন্দ্বিতা করা একরামুজ্জামানের প্রতিষ্ঠানে উৎপাদন হয়েছে স্বাভাবিকভাবে।

    এছাড়া তারেক রহমানের বন্ধু গিয়াস উদ্দিন আল মামুনের ওয়ান টেক্সটাইল, ওয়ান ডেনিম, রেজাউল করিমের রিদিশা নিটিং, সাবেক এমপি সিলভার সেলিমের সিলভার লাইন টেক্সটাইল, লুৎফুজ্জামান বাবরের মিরাকল, সাবেক এমপি ইঞ্জিনিয়ার ফারুক হোসেনের ডেল্টা কম্পোজিট, গাজীপুরের সাবেক এমপি অধ্যাপক এম এ মান্নানের গাজীপুর ফ্যাশন, এম এ হাসেমের পার্টেক্স ডেনিম, আম্বার কটন, পারটেক্স বেভারেজ, পারটেক্স প্লাস্টিক কারখানায় স্বাভাবিক উৎপাদন হয়েছে।
    কালিয়াকৈরে ইকবাল হাসান মাহমুদের মালিকানাধীন এপেক্স গ্রুপের সব প্রতিষ্ঠান গতকাল খোলা ছিল। তবে বন্ধ ছিল কুমিল্লার সাবেক এমপি জাকারিয়া সুমনের ডেনিম্যাক এবং বিরোধীদলীয় হুইপ জয়নুল আবদিন ফারুকের প্রতিষ্ঠান তামান্না গার্মেন্ট।

    টঙ্গীতে বিএনপি নেতা সালাহউদ্দিন কাদের চৌধুরীর মালিকানাধীন ঢাকা ডায়িং ইন্ডাস্ট্রিজে স্বাভাবিক কাজ চলেছে। কারখানার জিএম মেজর (অব.) হোসাইন ইমাম কালের কণ্ঠকে বলেন, ‘কারখানার উৎপাদন স্বাভাবিক চলছে। কেউ অনুপস্থিত নেই। হরতালে কারখানা বন্ধ রাখতে কেউ বলেনি।…”

    • jrahman said, on June 30, 2010 at 1:20 pm

      I think Shamokal also printed a similar story.

      • Syeed said, on July 1, 2010 at 6:36 am

        A branch of Mercantile Bank was on the way to my office. During BNP’s last regime I have seen many a times AL picketers taking refuge at that Bank when Police went on offensive. I’m sure Mr Jalil did not keep his Bank open just to offer shelter to his colleagues. There you go… one service sector company also remained open during hartal, that too owned by the person who called the hartal 🙂

  5. tacit said, on June 30, 2010 at 8:16 pm

    Whenever two economists fight over their data and what it actually shows, a little bunny has a nightmare.

  6. Rumi said, on June 30, 2010 at 9:12 pm

    I don’t know whether contemporary schools of economics include the monetary value of environmental impacts of factor X in assessing economic loss or gain.

    I feel hartal in BD does bring sufferings of people in regard to public/ private service sector but it has a positive impact in terms of environmental impact. My non economic understanding is that it does not harm economy.

    Hartal is not coming by surprise, so I don’t believe that fresh fish and vegetable are rotting while awaiting transportation. One slow days sale by a small business is covered by night sale or pre-post hartal day sale. One less day of traffic gridlock saves the environment an enormous amount of poison.

    Our PM has not started her PhD or Award fetching frenzy yet in this term. I think an environmental protection award is due for her services in enforcing 10 month of hartal and ultimately saving Bangladesh from 10 month of traffic gridlock ala a gigantic amount of environmental pollutants.

  7. jrahman said, on July 1, 2010 at 9:48 am

    Rumi bhai, economists should/do factor in environmental impact when they can — ie when there are data.

    Personally, in January 2007, after months of travelling, I was looking forward to a weeklong hartal-oborodh to enjoy Dhaka, but Gens M&M put paid to that. 😦

    T, there are many economists who prefer to avoid data and use elegant algebra — but they typically put little bunnies to sleep. 🙂

  8. tacitaeterno said, on July 2, 2010 at 12:44 am

    I would support an anti-Hartal law. Speaking as a non-economist hoi polloi, the idea of a day in which you get nothing done is infuriating and insane.

    Awami league has called the most hartals in Bangladesh’s history, so it is fitting that they adopt a law banning it. This way, they’ll be violating their own law when the time comes for them to call hartals.

    • jrahman said, on July 4, 2010 at 12:06 pm

      Such a law will be honored in breach. The opposition will simply say ‘we defy this law for the sake of the people’, and the government will use the law to pick up anyone they like for indefinite period.

  9. Blog vs. Facebook » Unheard Voice said, on July 6, 2010 at 4:40 pm

    […] in Zafar’s Facebook wall. Last week, Syeed and I debated the economic impact of hartal in my blog. Whereas the blog is publicly available, Facebook is a closed forum. And I believe it’s not a […]


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