Professor Jagdish Bhagwati, one of the world’s top economists of Indian origin at Columbia University and the pioneer in advocating FDI replacing aid in developing nations, contributed an article to the Financial Times on June 6.
The subject matter of this piece was how to mitigate the costs to generous nations that take in refugees. His major take was on the recent refugee crisis unfolding in Southeast Asian waters involving “the ‘Bengalis,’ the Rohingyas of Myanmar, and the emaciated Bangladeshi lookalikes.”
Professor Bhagwati proposed: “It is logical that prosperous and humane countries such as the US and Switzerland establish a fund to mitigate the financial cost.” In other words, he wants the world to treat the Rohingyas as refugees persecuted as a minority in Myanmar, and for this, a new global policy is needed.
Having said that, Bhagawati insisted: “Bangladeshis adrift at sea are clearly an ethnic majority and are simply escaping grinding poverty, not persecution. For those of us in India who have been arguing for economic reforms that would accelerate growth and pull up more of the poor above the poverty line, response of the left-wing populists has always been: Look at Bangladesh which has achieved a huge improvement in poverty and in social indicators without growth.”
Professor Bhagwati, with a sombre tone, asked if the contention of the left-wing populists was true: “It would be what I call the Bangladeshi rope trick! That many of the poor are fleeing from poverty in Bangladesh ought to be a wake-up call for these populists, and a compelling argument for the pro-growth and hence poverty-reducing reforms in India in 1991 and the additional reforms now in store under the Modi government. The rich proponents of populism can, but the poor cannot, live in populist slogans.”
Indeed, the Professor concluded with too a strong word. Left-wing populists or not, it is now a reality that Bangladesh has been growing at or around 6% over the last 10 years. The poverty rate in this nation declined dramatically over this period. Let alone the poverty line, if one takes the growing purchasing capacity of poor wage-earners in rural areas, this has doubled over the last 10 years. In 2005, a day labourer could have bought 4kg of rice with his/her daily wage, but it can now buy 8kg.
In Bangladesh, so far, rice-buying capacity remains the major indicator of a poor household’s relative prosperity. There is no denying the fact that things have improved a lot over the last decade both in terms of wages and poverty-reduction.
But sustainability is always a major issue in Dhaka due to both man-made and climate change-driven disasters. It has been argued that almost three months of non-stop agitation and ruthless petrol bombing by opposition activists on the general commuters cost the nation more than half a percentage of growth early this year.
During the very recent visit of Prime Minister Modi to Dhaka, he even observed that Bangladesh has indeed improved greatly both in economic and social terms. Of course, there is more to be attained.
On the issue of Bangladeshis fleeing the nation due to grinding poverty and becoming the economic refugees of the world, this is mainly a convenient argument by the right-wing liberalists to play a blame game. Bangladeshis who were found to be on the boats in Southeast Asia’s waters were first termed by Australian Foreign Minister Julie Bishop as economic migrants/refugees, backed by information from Indonesia.
One wonders how a parent of a poor family has the ability to spend $3,000 or more to send their sons to attempt an illegal boat journey to Malaysia, Australia, or even to New Zealand.
I am afraid Professor Bhagwati may have gotten it wrong that Bangladeshis are fleeing the nation for “escaping grinding poverty.” I feel there is not much truth in the presumption.
