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INVITATION TO A DIALOGUE

At micro, sectoral or macro level?

bv Abul Quasem
An interesting debate Is on In The Daily Star regarding the organisation of Bangladesh economy. I am indeed provoked to lake part in the debate, to participate in the dialogue. Profuse-congratulations arc due to Prof Rehman Sobhan and Prof Fcl«al Siddiqui for Iheir scholarly approach to the mutter
Muy I venture lo suy that both of them are speaking the truth, but partially, when we need hear Ihe whole truth. Idealism or dogmatism may bring welfare to the individual but may not to the society as a whole in this complex world It is on|y pragmalism*which Is sure lo bring the greatest good lo the greatest number. But ihc greatest number Is not also the total number. Hence the necessity of government intervention to carry welfare lo the left-out i.e. the weakest segment of the society. Besides, the unattended. the promotional and infrastructural work of the economy are the pre-dominaru responsibility of the government.
If this is so, then one has to accept the argument that public sector and private sector arc two sides of Ihc same coin tc. the economy Why then In 1972 the industrial enterprises and shares of Bangladeshi nationals in Industrial units had been brought under state ownership to be managed by public sector? It is yet to be understandable, more so. when the public sector could not deliver the uxk!s and the private sector is yet to overcome that trauma und present a real, dynamic and robust sector to the economy
To keep the economy running and make it grow pragmatism is the need of the hour. The point or area of operation of the public or private sector will be determined by the circumstances obtaining therein, Le. nature of the venture. There should be no general
On the top of It. there are long of sickness tn both public and private sectors which are speaking loudly against I lx .Twelves. Then what is the use of the delimitation of the boundary of the public and private sectors even in terms of production of goods as well as services al micro, sectoral or macro-level?
To keep the economy running and make It grow pragma tism is the need of the hour The point or area of operation of the public or private sector will be determined by the circumstances obtaining therein, t.e nature of the venture. There should be no general prescription
When we talk of open market economy we perhaps talk of market foe goods and services and we connote It as having "‘mpeiittvencss tn respect of price, efficiency and quality Iwblch to an ideal situation) absence of monopoly (which is a Mrt M HW. barest height of tariff wait and absence of restricts"* ,n Inter-dependence of nations economy
(which Is a fiction) and omnipresence of private sector (wbx h is an absurdity)
This means, in reality, market is imperfect In fact, effi den I allocation of resources and optimisation of welfare un de- price mechanism Is perhaps more a dream than a real tom But still effort should be made for less governance of the economy tn order to bring Into play all the available potentials for progressive development and prosperity of the society
We know that essentially both public and private sector caters to the market of goods and service*, be it tn agriculture. Industry health, education transport and communica UM ar any other sector at the economy. So when we talk of open market economy we talk of public, private as well as expert and import sub sector* supplying good* and service, ac
"•"'n preference* at competitive prices for Ms survival. Of
to
intervention fat the area Where thereX^monopol^Z^M^oa where Ute presence at private sector S *1 or inadequate or where the rote at fwernfaent is to create necessary envi
for ywdt at psm mm
Therefo^*^ public ^d vlte°^or'hL?v^t^riT’o perform, ahp being the limit Therefore. tdeotogfcaJ barrier to
the areas of operation of both public and private sector is nothing but dogma and theory and not pragmatism especially In Bangladesh situation.
When Bill Clinton has rejected the economics of "trickle down" In his election campaign he, In effect, discarded the traditional open market economy. Thal Is, there is market failure which, according lo him. Is responsible for rise in unemployment and budget deficit etc. So he advocated government intervenlion in the form of new deal".
On the other side of the picture. China is opening up very steadily lo private sector. The economic history of Great Britain is a 'scc-saw' between predominance of public and private sector during successive Labour and Conservative governments. Other socialistic countries including former Soviet Union (now CIS) are far ahead of China in yielding to the predominance of private sector.
As the situalion Is gradually unfolding, total privatisation in these countries will perhaps neither lx- possible nor desirable as the communists seem to be reorganising and reasserting themselves in these countries. Il appears that the present-day world trend is towards a mixed-economy .where both public and private sectors would cooperate side by side to maximise growth and welfare of the »ocicty.
The two hands of economy — "supply al a price" and "demand al a price" make the economic clock' click. This “supply at a price" and "demand at a price" are the two most crucial issues in the stability and growth of an economy. Both public and private sectors have essential role to play on both supply and demand sides. If that is so, how one can think of absence of dominance of one or the other In particular areas of the economy. May be. the more the economy is developed the less Is the role of public sector and the more is the role of private sector especially tn productive and commercial see tors.
Having said so. we should proceed al a micro level for commissioning cither publk- of private sector according to the dictate* of merit and realism. Once the private sector can well handle a particular area, ihe public sector should withdraw from that area. For example In ccmenl area private sector Is coming up. When it comes up governmenl may withdraw from this area. Bui In fertilizer area, because of massiveness of Investment, private venture t* inconceivable In Bangladesh
The two hands of economy — "supply at a price" and "demand at a price"make the economic clock' click. This "supply at a price"and "demand at a price"are the two most crucial issues in the stability and growth of an economy. Both public and private sectors have essential role to play on both supply and demand sides.
Bui there may be exploration of joint venture between public and private sector in such areas I‘ragmat Ism envision* that there should emerge also a joint sector in the economy — joint venture between public and private sector in ihc old EPIDC *tyte to overcome the despondency permeating in Industrial development of Bangladesh. The foreign private and public sector may also be attracted to participate In thi* joint sector through serious endeavours of head and heart. .
In Aim. one can safely assert that Bangladesh must develop quickly and In doing so we should use the talent, power and potential of both public and private sectors with the increasing rote of the latter tn all sectors of the economy. The public sector should concentrate in promoting the private sector, dynamise and transform it into an engine of growth In a very
The question I* how and when we can assign the pre dominant role to a dynamic, professional responsible and enlightened private sector for building up a prosperous and welfare-oriented society And in thi* Interregnum what should be the field and volume of public sector and how they should be organised and run tn order to enable it lo really perform? We should very seriously address ourselves lo these questions.