The incumbent government of our Honourable Sheikh Hasina took on a major challenge in turning the nation into a middle-income economy by 2021, the 50th anniversary of our independence. 2015 has just arrived and by the next six years, the middle-income goal has to be realised.
A popular ongoing debate is, given the political turmoil over the last year surrounding the general elections on January 5 of last year: Was it necessary to maintain stability in the political arena, whatever the cost, for the sake of achieving strong growth? The nation certainly is on the move now. Under such circumstances, was it necessary to take a strong stand against any political expediency to get the growth momentum going for at least a decade, even at the expense of remaining true to the spirit of democracy?
The answers to these questions are not easy to come by. One may, however, closely examine East Asia’s policies of the 70s and 80s for solutions. Let us take Singapore, for example: Certainly, Singapore made the concession towards gaining strong economic growth over political autonomy; in other words, the rulers managed stability in the political arena by all means in its early period of growth. In the early days of the South Korean growth trajectory, a similar approach had been adopted.
According to some development economists, it is now clear that genuine democratic rule can only be enjoyed once a nation reaches middle-income status. For Bangladesh, the next 10 years will certainly be very crucial to that end.
Coming back to the subject of strong growth versus making the right political decisions (such as resolving conflicts between the government and the BNP's 20-party alliance), it looks as though the opposition has been struggling to come to terms with the outcome of the 2014 general elections.
Thus, it has been throwing one economically damaging program after another (shutdowns, general strikes, etc), and, frankly, they are not working for them at the moment. The government remains steadfast in taking strong actions against anarchy.
And the government’s stand works. The public is in no mood to respond to the sporadic shutdowns, and realising this, the BNP leader has outlined her major grievances in the form of her party’s seven-point demand. However, there is nothing new in the list which can bring a breakthrough to the present conflict (some senior ministers termed the points as being ridiculous in the present political condition).
It is clear that the government will move on with its growth goal and has apparently been taking all the steps necessary to make it happen. The major infrastructure projects currently in place in the capital and the relaunch of the mega Padma Bridge project are likely to contribute in pushing the growth rate beyond 7% per annum over the next decade.
However, given the low base of the economy (with income at around $1,000 per capita) it would take a miracle to reach middle-income status by 2021. Miracles have happened in this part of the world, and a thus it is not unlikely for Bangladesh.
In this scenario, provided there is stability in politics, Bangladesh's economy has the potential to gain middle-income status within the next decade. The government’s target, in this respect, could have been achieved by 2021, had there been no debacle in the commencement of the bridge initially.
Having said this, the major setbacks to the economy over the next three to five years would be non-economic in nature. I refer to the non-stop political turmoil due to hard-line approaches taken by both the opposition and the government.
For argument's sake, if the AL loses the next general election, the present momentum of growth is likely to be derailed for at least three years in the post-election era. In other words, political decisions driven by a change in government would certainly be at the expense of strong growth.
On the contrary, if the government sticks to its economic goals without giving in to the opposition’s economy-damaging programs, the goal of becoming a middle-income nation by 2025 is certainly reachable.
It remains to be seen how the electorate behaves in the election due by 2019. Unfortunately, in the present political environment, there is no scope for a third strategy – a consensus between the two major alliances leading to a combination of strong growth and political freedom.
Political instability brings more suffering to the general masses and is a threat against Bangladesh becoming a middle-income nation in the foreseeable future. The ball remains well and truly in the court of the electorate, if and when the next general elections are held. It is important that the electorate does not throw the baby out with the bathwater.