It was sometime in 2008.
The caretaker government was in office and rapidly rising food prices had posed a major challenge to the government.
It was during this time that I happened to meet one of the advisers, i.e., de facto ministers, who had an important role in dealing with the situation.
I had known the gentleman for years.
Thus, it was easy for him to be candid with me.
Towards the end of our conversation, he made a confession.
One of the challenges he was facing in dealing with this emergency was the lack of just-in-time information on what was happening throughout the country.
He was getting information from the bureaucratic hierarchy but that was spotty, and he could not be sure how much was authentic and how much was intended to give the boss a false sense of optimism.
Fortunately, he had contacts in the NGO world and was able to get some reliable information.
But even that was not enough.
“If this was a political government,” he wistfully said to me, “we would have had an extensive network of workers and leaders spread all over the country, through whom we would have got reliable, just-in-time, information on what is going on, at any point in time, in any corner of the country.”
This is a comment that I will never forget.
For it tells us something very profound.
A political system, however messy it may be at times, has one important strength – the ability to generate valuable information and rich insights from the grassroots, and transmit these to the leaders charged with governing the country.
The people best equipped to maintain and leverage such feedback mechanisms are the seasoned politicians.
Veteran experience
Seasoned politicians have a lifetime of experience of close and frequent interactions with people.
They mix with a wide range of people, from the super-elite to the common person on the street.
Such interactions give them three valuable assets.
First, a good understanding of what’s going on in the lives of people -- all types of people -- and the diversity of their experiences.
Second, this ingrains in them a deep sense of empathy, not just for the poor or the vulnerable but for all.
Third, they acquire an extraordinary ability to read people, to understand how they think, what motivates them and what bothers them.
These are three important attributes of seasoned politicians that set them apart from the bureaucrats and the group that I have termed the "nouveau politicians."
Let me consider the second group first.
The "nouveau politicians" are those who have joined politics at a late stage of their lives after having had other careers, for example in business, academia, or the bureaucracy (civil or military).
They may have been very successful in their careers and thereby attained a certain standing in society.
Some of them, especially those in business, may have also acquired considerable financial resources.
The social standing and financial resources may have facilitated their entry into politics.
The experience, knowledge, and networks they have acquired in their respective careers are attractive to the political parties.
Much of this is also true of bureaucrats, but they also have another attribute, i.e., an intimate knowledge of how the administrative machinery works.
This is also something that a political party often finds valuable.
In brief, both the “nouveau politicians” and the bureaucrats do have a lot to offer.
Both groups can play valuable roles in governing a country.
But let us make no mistake.
No matter how hard they try, and no matter how charismatic they may be, neither a “nouveau politician” nor a bureaucrat can hope to acquire the enormously valuable experience a politician obtains from a lifetime of close interaction with people -- the profound insights, the rich feedback mechanisms, and the strong sense of empathy.
Why am I saying all this?
And, how does this discussion relate to the second half of this article’s title, i.e., the challenges of economic management?
Before I get into that, let me tell you the story of a Dr Singh and a Mr Rao, the story of something remarkable they did in the 1990s.
Perceptive readers, especially those familiar with the recent economic history of our large, neighboring country, may have guessed who I am talking about.
A soft-spoken economist, who had spent much of his career till then as an economic bureaucrat in the Indian government, is often credited with very substantial liberalizing reforms of the Indian economy in the first half of the 1990s.
That gentleman is of course Dr Manmohan Singh who, as finance minister, designed and oversaw the implementation of the ambitious reform package.
But now it is increasingly recognized that Dr Singh could not have done most of what he did had he not received the strong support of his boss, Mr Rao.
Narasimha Rao was true to his first name, the combination of a man and an animal, the human and the lion, representing a duality in character, an ambiguity in behaviour.
When he became Prime Minister in 1991, India was on the verge of an economic collapse with only two weeks of foreign exchange reserves.
The man known for ambiguity and contradictions now took a firm stand on what needed to be done.
The technical details came from Manmohan Singh and his technocrats.
But there was a bigger challenge to overcome.
In his fascinating account of Narasimha Rao’s life and career, “Half Lion: How PV Narasimha Rao Transformed India”, his biographer Vinay Satpati writes: “Any attempt to open the economy had to overcome the stodgy Congress party, a divided parliament, nervous industrialists and shrill intellectuals. Those who benefited the most from a centrally planned economy – rich farmers, trade unions, business houses, corrupt politicians and bureaucrats, were also powerful.”
This was a complex political challenge, not a mere technical agenda.
As Sitapati writes, Rao had to play both spin and pace.
He had to be a lion, but also a fox.
This was not something that came easily to the technocrat Manmohan Singh.
But it was ingrained in the crafty Narasimha Rao.
Bangladeshi context
The reform challenge faced by Bangladesh in 2022 is not the same encountered by India thirty years ago.
It is not just about further liberalization but also about enhancing governance, introducing discipline, and combatting cronyism.
But the political challenges are no less daunting.
Economic managers in Bangladesh will have to act both as a lion and a fox.
They will need to play spin as well as pace.
This brings me back to the distinction between seasoned politicians, nouveau politicians and bureaucrats.
The profound insights, the rich feedback mechanisms, and the strong sense of empathy that seasoned politicians are often endowed with, are useful at all times but particularly helpful when setting the course on turbulent water.
The other groups may have some of these attributes but certainly not in equal measure.
The attributes of seasoned politicians, acquired through a lifetime of engaging with people, come particularly handy during challenging times in at least two ways.
These help the politicians define, and execute, hard trade-offs.
These also give them the strength to stand up to vested interests.
Consider some of the important policy issues confronting us.
One is the so-called “six-nine” issue, the limiting of the bank deposit rate to 6% and the lending rate to 9%.
Raising these rates involves a trade-off.
On one side you have the interests of some businesses who have access to loans at the artificially lowered interest rate.
On the other side, you need to worry about the small depositors, for many of whom the interest earned on savings is an important supplement to meager incomes.
And there are also the small businesses who are denied loans because the policy, by discouraging deposits, has created liquidity problems for banks.
Another much-discussed policy issue, i.e., currency devaluation also involves a trade-off, in this case between those who would suffer as the cost of imported goods goes up, and those who would benefit from increases in exports resulting from a depreciated Taka.
There are other trade-offs I can mention but I think you are getting the point.
Making such hard trade-offs is a difficult task. To do so, one needs to stand up to powerful interest groups.
This requires courage but also guile.
One has to be a lion as well as a fox.
It is also important to ensure that the poor and the vulnerable do not get the short side of the stick.
The latter requires a lot of empathy.
Interestingly, the former does too.
The courage to stand up to strong vested interests often comes from empathy.
We tend to think of empathy as a soft attribute.
But empathy can be the source of great strength as well.
Ask any politician who has taken tough decisions and actions.
You will get confirmation of this.
Bureaucrats and nouveau politicians do have a lot to offer.
But in challenging times, you need the leadership of the seasoned politicians, their sagacity in forcing trade-offs, and courage and guile in dealing with vested interests, qualities acquired through a lifetime of doing politics.
What is needed
So let me now come to my final, and main, point.
Let us consider the 12 most important positions in government (other than that of the prime minister) related to economic management.
My list includes the ministers for finance, planning, commerce, industry, agriculture, foreign affairs, and energy, the PM’s economic, energy and private sector advisers, the governor of Bangladesh Bank and the finance secretary.
Readers may have their own lists, but I suspect there will be considerable overlap with mine.
Now consider the current incumbents in these positions and put them in the three categories I have identified above, the seasoned politicians, the nouveau politicians and the bureaucrats.
What you will discover is something striking, i.e., the dearth of seasoned politicians in that list.
Most, if not all, of those currently in the top economic management positions in government are competent people with years of experience in multiple fields relevant to economic management.
I am not questioning that. Nor am I talking about individuals here.
My point is about the balance in the overall composition of the top economic management team of the government.
My concern is that we do not have a critical mass of seasoned politicians in that group.
The notion that economic management is primarily a technical task, best left to some experts, is misplaced.
It is primarily a political task requiring the skills I have discussed above.
Economists are fond of saying “good economics makes good politics.”
Yes, it does.
But only politicians can make that happen.
The author is an economist, previously with an international development agency
