Posted in economics, politics by jrahman on October 11, 2010

It’s been three years today that this blog started.*  Over this time, we have seen some major events unfold at home and abroad, including: the unravelling of the 1/11 regime and the Awami League’s landslide victory; Pilkhana and the aftermath; the global recession.

It’s a good idea to mark such anniversary moments with a bit of introspection.  Over the fold, I note couple of things I got wrong over this time.  Of course I am going to talk about public matters — private mistakes are none of your business.  🙂

Mistake one: election 2008.

I was aware that BNP’s victory in 2001 was much closer than the seat count suggested — Awami League increased its voter share between 1996 and 2001.  I alsoe knew that BNP would lose if only a relatively small portion of those who voted dhaner sheesh in 2001 stayed home.  And I had heard a lot of anecdotal evidence of the post-1970s generation heavily rejecting BNP.

All these pointed to an AL landslide.  And every non-pundit I talked to in Dhaka pointed to an AL landslide.

And yet, I was predicting a close election — perhaps even a hung parliament (here).

In my defence, I wasn’t alone: pundits like Nayeemul Islam Khan, Asif Nazrul, Farhad Mazhar or Nazim Kamran Chowdhury said the same thing.  We all saw the crowd in Mrs Zia’s rallies, heard BNP’s unabashed anti-India / Islam-in-danger demagoguery (with dismay or joy depends on one’s preference — definitely dismay for me), and reasoned that kids from anti-AL families would vote like their parents and siblings.

In the event, the proverbial ‘man on the street’ was a better guide than the pundits (except my friends Rumi Ahmed and Zafar Sobhan, who both told me that a two-thirds majority by the Grand Alliance was very much on the card).

I wish I listened to them.

Mistake two: the impact of the recession.

When the global recession hit, in late 2008 and early 2009, I wrote about the impact on Bangladesh here.  In the event, Bangladeshi economy performed remarkably well, and my fears proved unfounded.

I thought remittances would tumble.  They haven’t.  Naeem Mohaiemen and I do ‘after the fact’ rationalisations here — but I am glad that I was wrong on the headline issue.

I also thought global commodity prices tumble, we would have had a respite from the food price inflation — this indeed happened for a while in 2009.  But I didn’t expect that food price inflation would return so quickly, and I didn’t expect the government to squander the opportunity of falling prices to rationalise subsidies.

Mistake three: optimism about the AL’s economic reform agenda.

This brings me to my third semi-public mistake.  I say semi because I don’t recall making a public call about it.  But in private conversations and correspondence, I noted my belief that the incoming AL government would take a few tough economic decisions very early on.

I believed that the government would rationalise various subsidies.  I also believed that there would be major private sector investment in infrastructure and power sectors.  Further, I expected some serious tax reforms.  And finally, I expected lot of recommendations of Better Business Forum and Regulatory Reform Commission would be instituted.

My friend Syeed Ahamed put it thus: politics to the left, economy to the right.  And I agreed with him.

I am sad to say I got almost all of it wrong.  While there has been improvements in tax collection and implementation of the development budget, a lot remains to be done if the ambitious medium term agenda is to be achieved.  And the micro governance reform agenda has been completely junked.

With two years gone, I don’t believe the government will be able to meet its commitments.  This was the strongest government politically in a generation.  It has made some tough calls in the foreign and education policy domains.  But as far as the economy is concerned, it has wasted a golden opportunity.

I hope I am proved wrong in that last belief three years down the track.

*Earlier posts are imported from UV and A-A-A.

6 Responses

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  1. Udayan said, on October 11, 2010 at 2:23 pm

    OK, can you now make some horrendous predictions about the upcoming November elections in the US and West Bengal state polls next year so that the opposite comes true 🙂

    • jrahman said, on October 11, 2010 at 6:04 pm

      Since you ask — Dems might hold on to both Houses, and the Mamata bubble will burst. 🙂

    • tacit said, on October 12, 2010 at 9:44 pm

      Udayan, what do you think will be the consequences of a Mamata victory in WB?

  2. The one I got right « Mukti said, on December 5, 2010 at 3:19 pm

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  3. […] global recession, but beyond that things would get better under Awami League.  Turns out I was wrong on both counts — while the global recession barely affected us, AL has proved to be a major […]

  4. Imbalances in Bangladesh’s economy said, on February 16, 2011 at 1:41 pm

    […] global recession, but beyond that things would get better under Awami League.  Turns out I was wrong on both counts — while the global recession barely affected us, AL has proved to be a major flop […]

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