Paging visionary leadership

In Asia, when Japan was forced by US Commodore Perry to end her 219 years of isolation (1639-1858) in 1853, the Japanese leadership was determined to build a rich country and a strong army. To achieve its goal of modernisation, she adapted the French police system, British naval system, and German system of army. It effectively made education compulsory as early as 1872, within just 4 years of Meiji restoration, which we failed to do even after 33 years of independence. It resolved to close the wide technological gap with the West and sometimes spent up to 7 percent of her national budget for importation of technology, invitation of foreign experts and training of local talents abroad, which was a great political decision and initiative at that stage of economy, despite the fact that she did not have tariff autonomy to protect her industries until 1890 (officially 1911) as per the unequal treaties she was forced to conclude with the West.

The Meiji government realised that it had to participate directly in economic development if Japan was ever to achieve economic independence. She introduced a rigorous education system to prepare necessary manpower for technology-based industrialisation, agricultural mechanisation, and application of abstruse principles of running a modern state, and established rational legal system, and drafted Imperial Constitution, with the help of a German consultant, that was promulgated in 1889. She developed all sectors of industries including automobile and heavy industries, and at the same time maintained balance of international payment.

World War II changed economic and political scenario of the world. Japan was under occupation by Allied Powers (1945-1952) and did not have freedom in using her foreign exchange for development initiatives to rehabilitate and rebuild herself out of the ruins of war. She had to maneuver her initiatives to enact various laws and establish innovative institutions to finance re-industrialisation and re-modernisation, and she is said to have put in place the most restrictive foreign trade and foreign exchange and inward investment control system. The announcement of "Income-doubling Plan" by the then Prime Minister Ikeda in 1960 is a manifestation of Japan's political initiative to achieve targeted economic development.

When the colonies were becoming independent one after another, the West felt the need to expand trade and bring about order in international payment, financing, and exchange rate, and created the IMF (International Monetary Fund) and IBRD (World Bank), which came into operation in 1947.

Despite economic hardship Japanese people did not favour external borrowing. When Japan took a small loan of $40.20 million for electric power companies in 1953 and later for some steel companies, these small loans were criticised bitterly in the Diet as a national dishonour. This is a marked difference with our people.

When OPEC took political decision to raise oil price from about $1/barrel in early 1970s, and the US suddenly announced a package of measuresnon-convertibility of US$ into gold, seven percent devaluation, and ten percent surcharge on import on August 16, 1971, which was so unexpected that it was called "Nixon Shock" in Japan, the very structure of the world economy was affected greatly. The major currencies of the world went floating, diminishing the role of IMF. Non-oil producing developing countries were suffering trade deficit and heavy debts. Japan quickly managed to overcome its difficulties, cut its energy consumption by ten percent and became more competitive than the West, which boosted its economic strength further.

Taiwan, S. Korea, Singapore, Malaysia, and then Indonesia started to take serious interest in Japan's development strategy and quickly adopted "Look East" policy and succeeded to a varied degree. For maintaining law and order, most of these countries successfully adapted Japanese Koban (Police Box) System. Though we were much ahead of many of those countries economically, we were gradually falling far behind.

Since its independence in 1947, the presently industrialised India restricted import and inward foreign investment, and made heavy investment in selected industries and infrastructure, sacrificing consumerism, luxury and welfare. There were criticisms of her protectionism, low standard of living, and poverty, but nothing could deter her from her self-reliance path and creation of technological base. Had it not done so, it could be worse-off than us with her huge population and could now be under strong international pressure to prematurely open her vast consumer market, and loose all potentiality of real development. They have prepared themselves well for economic take-off to achieve accelerated and calculated development from now.

Vietnam that suffered greatly in war also pursued the path of development, adopting wise policy under dedicated and well-directed leadership within a very short time. Even Bangladesh is inviting her to invest here.

If we have a look into our economic, financial, industrial, and technological capability, and educational, social, cultural, legal, constitutional, institutional, political, transport, administration, discipline, social order, communication, social capital formation and infrastructure situation in Bangladesh in this 21st century, we must realise and confess that we failed and are still failing to achieve what our people made sacrifice for, and that our strategy was wrong. Despite all arguments and attempts to shift responsibility, the responsibility of failure is with the leadership and not with the general people. We are talking about "poverty alleviation" only to get loans or grants that have conditionality of tagging the phrase regardless of the reality. Unlike Japan, we have failed to create educated and dedicated bureaucracy necessary for encouraging the leadership to take austerity policy to make investment for social capital formation and build up technological capability to set up necessary infrastructure for economic take-off.

We may disown responsibility for colonial period, but at the time of independence as Pakistan in 1947, we, as East Pakistan, inherited some railway, power plants, tea garden, a sea port and river ports, higher educational institutes and administrative institutions, though designed to rule a colony.

During East Pakistan time, banks and other institutions were established, and some industries were also built backed up by EPIDC (East Pakistan Industrial development Corporation). There were many jute mills including Adamjee Jute Mills; Khulna Dockyard, Chittagong Dockyard, Chittagong Steel Mills (though not a real steel mill), Gandhara (now Pragati) Industries to assemble modern automobiles, Karnaphuli Paper and Rayon Mills, Khulna News Print Mills, pulp mills, fertilizer factories, and other small and medium industries established in our pre-independence period between 1947 and 1971, which we inherited as Bangladesh. Though not so strong, and broad-based, we did start with some modern infrastructure to build our future, and we did not have to start from scratch as Japan and many countries had to at their initial period. It is an irony that our own people are deliberately destroying or incapacitating this hard-earned base, with or for foreign loan or under pressure. We made about 1,560 small and medium industries sick, if not dead by now. We choose to cut our legs with the golden axes offered by the lenders, World Bank, or IMF. In the name of reform and preparation for privatisation, we are financially crippling our NCBs for reasons unknown. This will strip the government of any leeway to financially help industrialisation and other development initiatives and become unacceptably dependent.

People might say, nationalisation of large industries and financial institutions and difficulties in recovery from war damage impeded our development immediately after liberation in 1971, though our motivation level was no less than that at the immediate post-Meiji restoration period in Japan. Our technological and infrastructure level was substantial. We regret that our leadership was not visionary and developmental, though it adopted some innovative and austerity policies like introduction of import under wage earners scheme, import of used vehicles, restriction on import of cars larger than 1200cc, and so on. Our nation could not utilise the high degree of people's motivation to prepare the nation for economic take-off. It is a colossal and demanding job, but the failure was catastrophic for the future of the nation.

Ziaur Rahman who tried to motivate the people afresh and remove frustration, took up agricultural, industrial, technological, and human resource development as the base for self-reliant national socio-economic development. It was still the time of martial law when the IMF was pressing the developing countries to devalue their currency. We could convince him to keep devaluation at the minimum, from Tk 15.0541 to a Dollar in 1975-76 to Tk15.4900 to a Dollar in 1979-80, and Tk16.2586 in 1980-81. The rate is now about Tk. 59.00 to a US Dollar whereas the Japanese Yen rate which was 360 to a US Dollar in 1972 is now 105 - 110 to a Dollar. Our monetary and fiscal policy makers failed miserably in maintaining the value of Taka at a healthy level by other policy adjustments.

Today, after over 33 years of independence, we cannot say that we are not experiencing economic mess with degenerated social order, undisciplined and irresponsible administrative system, political experimentation and mudslinging, anti-people taxation system, a legal system not compatible to a free nation, degrading social values, a budgeting system that does not provide allocation of even the "Critical Mass" to essential development areas, serious unemployment, industrial incapacity, and great despair. In disregard to the reality, the leadership is always misguided to believe and publicly claim that every thing is going well and better than any previous regime. Despite the fact that our per capita GDP is less than US$400, per capita export is about US$50, our accumulated foreign debt is pretty high compared to annual export, and our social capital formation is poor, governments one-sidedly make claim of "sound foreign exchange reserves." Had it not been for remittance by expatriate Bangladeshis, the economy would be in real mess.

Ours is a large country in terms of population. It is mere irresponsibility to be complacent with present economic scenario. In the coming WTO, FTA, and Intellectual Property Right regimes, we will have constrained leeway to protect our interest in international dealings. We must now realise that laissez-faire economy has never and will never take any technologically and educationally backward, and socially undisciplined, resource-poor country to prosperity. The government initiative and bold and wise leadership is essential. We must wake to reality. We must consciously choose an austere policy and avoid consumerism until we can afford it. People will go on aspiring for a visionary leadership that will take initiative to achieve such development suited to our need by wisely applying all development policy instruments. If the present coalition government can break the cycle of borrowing, wasteful spending, and borrowing again under any conditionality to pay off interest, accumulating debts for the future generation, the people will admire them. Let us hope for the best to come.

[The views expressed here are of the author's own, and not necessarily of the organisation he represents.]

Mustafizur Rahman, Ph.D., is Chairman, Institute of Development Strategy, Dhaka.