Development Strategy and Problems of Democratisation in a Peripheral Country

The Bangladesh Experience

Bangladesh inherited economy, administration, legal system and socio-physical infrastructure from Pakistan, but people struggled for an independent state to have different development paradigm and socio-political relations. High expectations for quick and all-embracing development of the economy and democratisation of the society were not unusual in a newly independent state of Bangladesh especially after the long struggle for emancipation and the war of liberation in 1971.

However, the thirty-five years experience since independence presents a different scenario. During the period, Bangladesh has gone through several socio-economic changes and reforms. The country is now more open and integrated with the global economy and more under global governance too. Despite these changes, Bangladesh remains a poverty stricken country and a weak democracy. On the other hand, a new super rich class has emerged through the ‘primitive’ nature of accumulation. Violence and grabbing of common properties have risen with the growth in GDP and increasing resource potential.

Although national elections are taking place regularly since 1991, the democratic process is still in a vulnerable state. This paper attempts to understand the nature of socio-economic development that has become dominant in the country and also to understand whether this has links with the fragility of the democratic process. I would like to argue that the peripheral status of the country is very important to look at to find constraints to develop institutions that are essential to have a strong foundation of the democratic polity.

Historical perspective

The road map to Bangladesh’s emergence as a nation state began with the partitioning of British India into India and Pakistan in 1947. At that time, Pakistan consisted of two geographically separate territories. The Eastern part, later became Bangladesh, had been suffering from regional and ethnic discrimination in different forms. From the very beginning, Pakistan has been highly dependent on a military-civil bureaucracy. Instability in civil governments and perpetual military rule were a reflection of that. Its client position was defined by the Pakistan-US military pact and by a long and decisive involvement of US consultants in shaping Pakistan’s planning, development and institutions.

Although formal military rule started in Pakistan in 1958, the military had exerted power since the beginning because of the country’s fragile civil rule and institutions. Martial law, therefore, “was brought about by men who were already participants in the existing political system and who had institutional bases of power within that system. Long before the coup, the military had been working as a silent partner in the civil-military bureaucratic coalition that held the key decision-making power in the country” (Jahan, 1972, 52).

This concentration of political power was well suited with the concentration of economic power. By 1968, the distribution of resources showed a highly skewed picture. According to the then chief economist of Pakistan Planning Commission, “66% of all industrial profits, 97% of the insurance funds, and 80% of the banks in the country were controlled by some twenty families.”(1) And all these twenty families were from West Pakistan.

Economic disparities along with regional and ethnic discrimination had given birth to a long democratic struggle in the then East Pakistan. That struggle turned into a nine month long decisive armed struggle in 1971 when the (west) Pakistani military junta started a barbaric military operation, including genocide, rape, and loot, on the people of East Pakistan. The junta went for total repression in order to stop the possibility of transferring power to the newly elected parliament, the majority of which was from the eastern part, now Bangladesh.

Global Agenda: Local Shaping

After independence, Bangladesh failed to alter the power matrix in social and economic fields that had prevailed in Pakistan, also in the British period. The structures and hierarchies of civil and military institutions, created during the British rule, were kept intact in Bangladesh; similarly, the legal and judicial systems remained untouched; and the land administration, despite land reform measures taken in 1972 and 1984, remained unchanged.

Moreover, the economic front has gone through an increasing assertion of ‘neo-liberal’ ideology what we can call ‘economic fundamentalism’. Despite the existence of elected parliaments and ‘vibrant civil society’, the increasing authority of the Global Institutions (GI), G-7 countries and their decisive involvement in policy formulation and implementation have obstructed the process of transparency, people’s participation and the effective system of accountability.(2) On the contrary, this phenomenon helped a highly corrupt lumpen ruling class to grow and govern.

The ‘development’ projects and programmes sponsored by the GIs that have played a key role in accelerating the process of marketisation, privatisation of the economy and its deeper integration with the centre economies include:(i) the Green Revolution (ii) Structural Adjustment Program (iii) Poverty Alleviation Programs (iv) GATT agreement (v) Foreign aid supported trade, technical assistance, reform, consultancy, training and education. The current Poverty Reduction Strategy Paper (PRSP) is the latest in the series.(3) These programmes and projects also have played and continue to play a crucial role in determining the societal shape and class composition, and in creating a strong support base for the anti-democratic hegemony. The resultants have close links with the vulnerability of the democratic polity and institutions in the country (see Table 1 for the ‘development’ records).

Table-1: Programs initiated in Bangladesh by global institutions in different periods

Socio-Economic Development: Formation and Erosion(4)

At the time of independence, both rural and urban societies of the country were mostly composed of small owners: petty traders, low and middle-income professionals, small and medium farmers, small entrepreneurs. Except large farmers and jotedars, a big propertied class based on industry or on trade was almost non-existent. That societal composition has radically changed during the last three decades. Big propertied multimillionaires have grown to thousands in this period and new occupations related to the service sector emerged. However, studies reveal that this super rich class has either little or negative relations with the growth of manufacturing (Siddiqui, 1995).

Agriculture accounted for the largest share of both the labour force and of GDP in the early 1970s. After three decades, agriculture’s proportion in GDP came down by one-third, but manufacturing could not capture the dominant position in the process (GOB, 2006). The service sector, as a whole, has emerged as the single largest sector contributing more than half of the GDP. The growth of Malls has gained absolute authority over dismantled big mills.(5)

However, there are differences in different sub-sectors within the manufacturing sector (see table 2). A positive growth is seen for the export-oriented ones and for construction, while a negative growth is recorded for the old large manufacturing units in the country. Since the early 1980s, many of the old enterprises, public and private, were closed or downsized and gradually replaced by the export-oriented ones.(6) Due to the closure of many large-scale factories, mainly in jute, paper, sugar and steel industries, and sickness of medium and small enterprises, the number of industrial workforce shrunk, despite new entry in export-oriented garment industries and Export Processing Zones (EPZ).

Table 2: Ups and Downs within Manufacturing Sector

Source: Based on data in Bakht (2000)

Bangladesh’s external trade has increased manifold since independence. Both import and export have expanded, although the trade gap remains high, as the volume of imports has increased faster than that of exports. The increase in imports took place consistently with reform measures to liberalize them, i.e., lowering import duty and removing trade and non-trade barriers. Garments capture the single largest share in export earnings, where most of the workers are women and ill-paid.

The participation of women in economic activities outside household has been expanding since the early 1980s. Both push and pull factors contributed in this. On the one hand, family-level income has often faced severe crisis due to a decline in the real wage and stagnation in the demand for male labour. Such crises have pushed female members of the family to work outside the family domain. On the other hand, export-oriented industries (e.g., garments sector, shrimp farming) and other similar activities, the informal sector and the growing urban demand for different types of cottage goods and jobs constituted a demand for women labourers.

Export-oriented production of shrimps and other agricultural goods also expanded since the late 1970s. Other market-oriented production and processing activities also grew fast, not only in crop production, but spread to other areas as a result of institutional, financial and other incentives and support. Commercial production increased significantly related to Poultry, Dairy and Fisheries since the early 1980s.  NGO micro credit contributed significantly to market oriented activities of low-income rural people.(7)

In Bangladesh, “NGO” means not merely a non-governmental organization; it means a type of development agency that is funded by foreign donors. The growth of NGOs in Bangladesh has been spectacular in the last two decades. The NGO model of development, that includes group formation, the target group approach, participatory development and micro credit, has added a new dimension to development thinking and practice.(8) Since the early 1980s micro credit operations started getting priority among some NGOs and by the early 1990s it became the main focus of most of the NGOs. In the process, the NGOs became polarized between a few very big NGOs and many small, where the small ones acted as subcontractors for the big.

Poverty alleviation has always been the ‘top objective’ of successive governments, global agencies and NGOs. Nevertheless, the number of population living under the income poverty line increased from 50 million in 1972 to 68 million in 2006. On the other hand, inequality has also increased during this period. In 1983/84, the lowest 5 per cent of the population held 1.17 per cent of national income, but it came down further to 0.67 per cent in 2004, while the share increased for the highest 5 percent from 18.30 percent to 30.66 percent of national income during the same period (GOB, 2005).  This poverty scenario along with rising inequality explains the growing rural-urban migration and the increasing number of slums in major cities.

In contrast, the share of ‘black'(9) economic activities has risen significantly too. This particular economy encompasses bribery, crime, production and trade of arms, employment of professional criminals, child and women trafficking, repressive sex trade, grabbing, illegal commissions, leakage from diverse government projects, commission from secret contracts with foreign companies. The rise of the super rich and mafia lords and their domination over policy-makers make the task easy for the foreign corporates and global institutions to sell their agenda. Privatisation of common property and public goods is one of their favourites.

While constitutional commitments stand for ensuring education and health care for all as the state’s responsibility, the state has been busy in implementing the ‘reform’ programmes to privatise everything including education, healthcare and utility services. That clearly means that those policies are dominant which are aimed at throwing the vast majority of the people to the mercy of profiteers, local and foreign. 

Foreign Direct Investment (FDI) was very small and limited to some selected areas until the early 1990s in the country. The first big project was the Karnaphuli Fertilizer Company (KAFCO) that was a bad deal and proved a liability for the country. Since then the interests of Multinational Corporations (MNCs) for investment in gas, electricity, port, hybrid and telecommunication increased. Many contracts, mostly without people’s knowledge, were signed in oil-gas-coal resources, telecommunication and power sectors. Due to irrational and harmful terms and conditions, most of these contracts in FDI are already exposed as burdensome for the economy(10). Experts and people in general started questioning the unequal and harmful nature of these contracts, especially for natural resources. Recently a big mass uprising forced the government to cancel a disastrous project signed earlier secretly with British-Australian companies.(11)

Growth and Erosion, Affluence and Poverty 

After thirty-five years we, therefore, find Bangladesh as more marketised, more globalised, and more urbanised; and, has a good number of super rich and increased number of uprooted poor people. We also find an increasing role of international agencies in the governance of the state, along with the increasing presence of funding organizations including NGOs. Although the country is being dominated by a power oligarchy, the role of the state in major policy formulation is rather marginal. A lack of transparency and accountability is very usual in local and foreign contracts. Criminal activities including grabbing public resources have become a main mode of capital accumulation. This has also gained strength in determining the course of mainstream politics. The pattern of development therefore needs demystification. Table-3 presents a rise and fall matrix.

Table –3: Rise and fall scenario with the “Globalisation” and “Modernisation” process

In the last thirty years, Bangladesh had plenty of development projects and accumulated a huge international debt for attaining this development. During this process, a number of consultancy firms, think tanks and thousands of NGOs emerged, and many experts in different fields were born. Poverty alleviation projects gave enough affluence to foreign-local consultants, bureaucrats, and researchers. Agriculture and Water development projects made enough business for international and national construction firms, bureaucrats, consultants and agribusiness corporate bodies. Energy and power development projects ensured disastrous investments and quick high profits for the MNCs. Research and education programs have succeeded in creating an ideological hegemony by giving birth to a lot of clone intellectuals and experts. Affluence and poverty, potential and vulnerability have grown parallelly. This is the context where a real democracy cannot grow. Rather it suffers from nutrition and appears as weak, fragmented and distorted one. That is what we are witnessing today.

Development, Political Power and Religion in Politics

During the last three decades, Bangladesh has experienced different forms of governments: civil and military, parliamentary and presidential. Emergency was declared twice (1974 and 1987), Martial Law was promulgated twice (1975 and 1982). During the period, two presidents were killed (1975, 1981). Since 1991, elected governments have been ruling the country. A form of non-party caretaker government was also introduced in 1991 to run elections well. Since 1973, the constitution has gone through many amendments through which it has become more undemocratic and communal. In the same process, religion has gained an increasing space in political discourses and state policies.

In Bangladesh, like many other countries, people are mostly strong believers in religion, though there are many differences among them in maintaining religious faith, in expression and in formal practices. Differences appear in different sects, in different income groups with rural or urban setting and also in gender. No religion, therefore, should be read as single and universal. Every religion includes many religions in itself. The same religion appears differently in aspiration, vision and also practice of different sections of people according to their socio-economic and political positions. People, the toiling masses, have their faith, they take the religion as ‘heart of the heartless world’, they treat God as their last resort, they express their love to God and also accuse ‘him’ for not extending ‘support’ when it is very necessary. But ruling classes’ perception of God is different. They assume God and religion to be saviours of power, of powerful people and their authority based on plunder and crime.

It is all the more important to note that people in Bangladesh have always maintained their religious faith separated from their political decisions. If we reread political history of Bangladesh, we will find several crucial facts in this regard. People did not ask to bring religion into politics, but that happened. They did not ask to give general amnesty to the war criminals that was given in 1973. They even did not ask to establish Islam as the state religion that was established in 1988. Those were imposed on the people on the plea that people needed religion very badly. If we note the period of those events, it will possibly give a contrary picture. It was not the people but the rulers who needed religion as a shield. Whenever the ruling class failed miserably or faced disillusion and anger of the people, they used religion as a shield for their survival. The following table is an attempt to summarise the context of the ruling class/es’ use of religion.

Table: 4 Can we find any correspondence between the pattern of ‘development’ and Politics?

There is a strong trend to see the strengthening of religion-based political forces as a counterforce to the present modernisation paradigm or globalisation process. But there are various instances by which we can draw opposite inferences. Experiences show that, in most of the cases these political groups, monarchs or religious leaders had been empowered by the global neo-liberal regimes like the US to counter democratic and socialist projects. The above table reveals that the regimes in Bangladesh which blindly followed the diktats of global institutions for adjusting the economy according to the needs and strategic steps of global corporates and local grabbers, are the same which have brought religion into politics and have created space for religion-based political forces.

The socio-economic programmes of major parties known as Islamists are not incompatible with the principles of corporate market economy. Many of the leaders and patrons of these parties are members of the big business community; they have Banks, Insurance companies and other service sector businesses including NGOs. What these parties want is to ensure a religious command over the capitalist economy, a fusion of capitalism with God. This approach is similar to the BJP in India or White Christian supremacist in the west. That brings an ideology that accepts discrimination, repression and exploitation; and does not encourage diversity, differences and disagreements. All in the name of God.

Constitution and Vulnerability of the Democratic process

One may feel good to see that despite the power takeover by the military twice, the constitution of 1972 was never dissolved, as it happened in Pakistan. But the constitution has gone through several surgical operations to adjust with these power changes. The number of amendments eventually made the constitution totally different from the original one. If we look into those changes three important points can be identified. Those are: (1) no major amendments of the constitution (one party system, Indemnity law, legalization of martial law, legalization of religion-based politics, to allow war criminals to do politics, state religion) came into being through popular demand or popular movement (2) except the first one, all other changes were made by the non-elected governments which came into being by force and later on were legitimised. And (3) except the first one, none of these changes, including other anti-people laws, were repealed by later ‘elected’ governments.

It is logical at this point to raise question that whether power comes from the constitution or does the constitution take shape according to the nature of power? Our experiences clearly show that constitution has always been used according to the needs of the ruling class/es, and thereby turned into a paper of convenience.

Commitments made in the constitution are systematically turned into mere rhetoric in the process. For example, while the constitutional commitment commands the state not to “discriminate against any citizen on grounds only of religion, race, caste, sex or place of birth”, discriminating laws are preserved and patronized by people in power, and for the same reason, religion is being used to legitimise the undemocratic polity. The real policies – economic-legal-political – contradict, defeat and put those commitments in cold storage.

Sources of the vulnerability of the democratisation process in peripheral countries like Bangladesh are, therefore, manifold:

First, the very foundation of peripheral capitalism is fragile despite an organized system of wealth accumulation. This process has brought a mad race among the plunderers. On the other hand, the peripheral status of the country gives an immense authority to the global agencies to shape economy and polity. All major economic policies have been formulated in line with the strategic framework of these global agencies, i.e., the World Bank, IMF or ADB, without any knowledge or consent of the people. The nation state is reduced to an implementing agency of policies formulated elsewhere with increasing coercive power. How can one expect the development of democratic institutions in this setting?

Second, unlike many other peripheral countries, Bangladesh has been enjoying a ‘democratic’ rule, i.e., elected governments under a parliamentary system since 1991. Nevertheless, the parliament was never allowed to lead the country; not to formulate, not even discuss on crucial policies determining the fate of the country.

Third, capital accumulation process takes a primitive form in most of the cases – i.e., grabbing, looting and illegal economic activities become dominant in economy. Therefore, persons enjoying power supersede institutions and law of the land. They also enjoy support from global institutions. That creates conditions to raise godfathers or mafia lords obstructing the democratic exercises as well.

Conclusion: Beyond the Present

Bangladesh, like many other countries, has high potential to develop in every way. It has human and material resources necessary to ensure sustainable development and to provide people a decent life. Bureaucratic global institutions, which enjoy authority but do not bear any responsibility, have been playing decisive role in determining the country’s development strategy. The policies on industry, agriculture, natural resources, power, education, health, trade, environment, poverty, women, telecommunication, which are endorsed by different governments are nothing but formal versions of the policies outlined much earlier by the above bodies, not accountable to the people of this land. The lumpen ruling class has been fattened, strengthened and internationalised by the support of the global institutions at the expense of the people and the environment.

In different phases of history, Bangladeshi people have proved their potential and as well as urge to build a real democratic society. But as we have already discussed that these attempts had been obstructed, along with other things, by the development strategy designed to serve global corporate and local grabbers. The development strategy aimed at profiteering and plundering for few at the cost of the lives of many and environmental disaster, resulted in growing resources and increasing deprivation, dazzling cities with increasing slums, high rise buildings and projects by destroying ecological balances. In order to keep this system intact, democratic principles and institutions have been systematically damaged by the local-global partnership. Vulnerability and fragility of democratic processes are the net outcomes.

The vision of a society where people will have the opportunity to develop their potential, will have authority over their lives and resources and will be treated as human being irrespective of gender, profession, religious belief, colour, caste, nationality is an integral part of the democratic polity. Therefore it is crucial to build up ideas and struggle against the dominant ideology and power that glorify inequality, discrimination and humiliating life of the majority, along with perpetuating vulgar consumerism of the minority. This vision of society will be able to give us a real identity of human being that goes strongly against any fascist, racist, communal, sexist ideology and their coercive political agencies. People of Bangladesh are in different ways struggling to build the counter hegemony. To fulfil a real democratic potential these struggles against many odds are the hope to go beyond the present scenario.

Anu Muhammad is a Professor in the Department of Economics at Jahangirnagar University in Dhaka.

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