****The prevailing situation simply means that there is no long-term economic strategy in place at yet, or if it is, there it nobody in government who knows how to go about implementing that policy. But more seriously, the lack of direction seems to emanate from where it matters most in a parliamentary form of government.****

A N acute stagnation has /\ come to characterise a W the country's economy In the past few months, causing confidence among Investors to slump to a record low Apparently no other period since the liberation of Bangladesh 20 years ago has seen such a depression tn economic actMty

If the above had been stated

anybody elec wishing to dam age the credibility of the pre sent government, then one could have taken the gloomy assessment with a large pinch of salt

Unfortunately, the comments wrre made by some of the leading figures in the business community in the course of an open discussion held in the city Nov 5 last organised by the Federation of Bangladesh Chamber of Commerce and Industry.

Given the fact that the grim picture was painted by some of the country's foremost entrepreneurs. the impression needs to be taken seriously. Even tf one is Inclined to think the business community is being a little alarmist, perhaps to get more concession out of the government, one cannot escape the fact that, whatever political leanings or motives a businessman may have, the last thing he needs is an unstable political environment. As a rule, he will oppose parties that propose Intervention and regulation, because that will hamper the growth of the pri vate sector. But the present regime came to power on the promise of making life easier for business, not difficult.

One does not have to have an MBA to recognise that a legitimate i.e. representative government is a Good Thing for the economy, but perhaps more important is that gov emment's ability to ensure an atmosphere of stability and confidence both in the economic and political arenas.

In the past, dictatorial regimes have succeeded in achieving a limited degree of economic success by managing to impose a great deal of social and political discipline from above. The resulting stability, coupied with a deregu latlon

economy to pick up steam

But there was always a catch.

The dictatorial and unrepresentative character of those regimes meant that they lacked legitimacy in the popu lar minds, which created con-

dlttons for long-term political in stability, thus threatening short-term economic gains. Furthermore, as with all things authoritarian development of social and economic Infrastructures, financed exclusively by foreign aid. was carried out according to whims of Individuals rather than logic, leading to what could be politely de scribed as lop-sided development.

But today we face a peculiar problem. We have an elected and therefore representative government But that govern merit is too often betraying a lack of leadership within Itself And when the government itself lacks leadership, the slate loses direction and the econ omy cannot but suffer.

We have an export policy and an industrial policy tn place which, on paper at least, arc tailor-made for breathing new life into the economy. But business leaders are complain Ing of stagnation and lack of direction. Something, quite

obviously, is amiss

Only a few months ago. the finance mlnfoter was lecturing everyone on the virtues of re forma prescribed by the World Bank and the International Monetary Fund But more recently, he has been talking about ■difficulties' Involved In Implementing those reforms.

Last week, he talked about the need for 'political decision', in order to get the economy moving.

Nobody doubts that 'political decisions' are nec essary. But from where does the finance minister think those decisions should come? After all. in any country, whether democratic or other wise, such decisions can only be taken by those entrusted with the state's executive authority. meaning the cabinet.

As the minister himself Is a leading member of that cabinet and In charge of the economy portfolio, people naturally ex pect him to come up with the goods — Including those hard, political decisions

But the prevailing situation simply means that there 1s no long term economic strategy in place a. yet. or If it is. there is nobody In government who knows how to go about implementing that policy (which would be worse than not having a policy in the first place). But more seriously, the lack of direction seems to emanate from where it matters most in a parliamentary form of gov-

eminent — at the head of the

In order to inspire confidence. a prime minister needs to demonstrate a profound understanding of the situation and a clear vision of what needs to be done and just as Importantly, a clear recognition of the socio-political parameters within which those economic policies are to be Implemented

This is particularly Impor

tant for a, country like Bangladesh, which has to look abroad for investments as well as aid to keep pushing economic growth rates upwards while building up essential socio-economic infrastructures.

But because of our recent experiences with dictatorial and unaccountable regimes, the new government also has to show that It Is capable of carrying through its policies within the constraints imposed by a democratic polity where parliament will demand a much greater say than ever before.

Regrettably, what we have had so far from the prime minister and some leading ministers are sermons and lectures on sins committed by the previous regime, and how 'certain quarters' are conspiring to undo her government and democracy Itself.

However, while there may or may not be substance In the conspiracy theory, past misdeeds cannot be offered as an

excuse for present lack of direction. The people have cn trusted Khaleda Zia and her party with the honour, privilege and responsibility to govern. not to look back and complain but to took ahead and point the way forward

Yet eight months into office. the 'new" government itself seems confused about what its policies are

For instance, will nationalised Industries be privatised or not? The Industrial Policy says they will, but the PM re-

cently said the 'profitable ones' will not be. and the Minister of Textiles even more recently said none of the textile factories, nearly 50 per cent of which are loss-making will be either! So, where are we?

The Bank of Credit and Commerce (BCC) crisis Is still unresolved even after four months. But the government has not been forthcoming about what the real problem Is i.e. what exactly is the Interna) state of BCC 1n Bangladesh?, nor how much damage the affair Is causing the economy.

The bank loan defaulter Issue is swinging like a pendulum. with the finance minister breathing fire one minute, and quietly writing off accumulated interest on those loans 1n the next!

This is not a question of waiting a little while and hope things will sort themselves out nicely. It is the Industrial sector that will have to be rejuvenated if we are to tear that ob-

noxious UK tag off aur lapels. Considering our Immediate economic environment — that to. south and south-east Asia — has become a high growth area, we have a lot of catching

In the present, highly-com-petlUve environment, for us to stand MW would be to move backwards, and watch our competitors disappear into the horizon (we have already lost sight of Thailand and Malaysia, pptnes picking up pace, and if Narasimha Rao s radical polici

even have a place to hide).

Therefore, excuses such as 'its still a new government" or 'its early days stllT are Just not applicable anymore.

The government is still in an advantageous position : it enjoys widespread international sympathy as a result of being an elected government, and the public at large can be a very patient tot tf it sees some sign of sincere determination from the government. The business community has made no secret of its willingness to cooperate as a popular and successful government to always good for business, and.

be pacified If they were dealt with firmly but fairly and with sincerity.

But all these favourable conditions will disappear if the government falls to show it has a total grasp of the situation and prepared to deal with it accordingly. Failure to act soon will really push the government into the path of a crisis. but ft will be a crisis of its own making, and there will be no more scapegoats.

But it can avert such a crisis by giving top priority to the

and by bringing some order king. It to in everybody's interest that the economy assume some recognisable shape within the next 12 to 18 months.