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The major economic concerns ahead of the election
Bangladesh’s next national election is only a few months away, and the market is already very hot. By market, I mean the one comprising economic and political features. Between now and next January, things might change drastically, and there are a bunch of significant factors that could affect the outcome of the election. The state of the economy, the strength of political parties, the mood of the electorate, and the international geopolitical environment are just a few.
Obviously, these variables could change both in the short- and medium-term. Nonetheless, for the average citizen, nothing plays as big a role in shaping the popularity of a party as the well-being of the populace and the health of the economy.
As some readers might remember, during Bill Clinton’s first presidential campaign decades ago, the quip, “It’s the economy, stupid!” became the rave. The popular political slogan emphasised the importance of economic issues to voters. And I am sure the Bangladeshi people will also be considering, among other things, their pocketbook issues as they try to figure out which party to vote for.
One of the questions voters might be asking themselves is: “Are we better off now than we were five years ago?” A sizeable chunk of the population will respond in the affirmative. The ruling Awami League (AL) leaders have lost no time in showing off the economic benefits of the megaprojects completed over the last few years, and of those expected to be finished in the next few.
However, the answer to the question may not necessarily determine which party wins the election in 2024. The factors that shaped the outcome of the last two elections came from the books of Machiavelli rather than from Adam Smith. Muscle power could very well be more dominating than the rules of economics.
A recent survey conducted by the International Republican Institute (IRI) concluded that Bangladeshi citizens are pessimistic about the state of the economy and elections. The IRI is a US-based NGO that is funded and supported by the US federal government, and its survey found that economic issues have been driving the pessimism in Bangladesh; 51 percent of the respondents said that the economy was doing poorly.
It is worth mentioning that during national election in any country, stakeholders try to bring the bread-and-butter issues to the forefront to enhance their appeal to the electorate. In their economic manifesto, each party promises that, if they win, they will bring the fruits of the election to the doorsteps of the masses.
As seen across the globe, when an incumbent party is in charge, they promote what it has done in the past and what it will deliver if reelected. On the other hand, the opposition parties don’t have the same leverage and can emphasise two things on the economic front. First, the incumbent should’ve done better; that is, they imply that if it weren’t for the misdeeds of the ruling party, things would have improved further. Second, that the opposition can offer a brighter future, with less corruption and whatnot.
At this point, the million-dollar question is: who will check the facts? How do you sort out the claims and counter-claims? How can the electorate decide which party or group to believe in?
In the case of Bangladesh, the ruling party has all the levers of power and access to the roads, media and, one could even say, the landscape. The ministers and the party cadre can list the highways and bridges they have built, talk about power plants and tunnels in the works as well as the ones in the pipeline, not to mention the promise to reach middle-income status by 2031.
The opposition, unfortunately, has no such records up its sleeves, and has to count on the discontent among the masses and point to the wastage of public funds during megaprojects. That can be tough when you don’t have the media backing or the liberty to hold demonstrations or meetings. So, the opposition has to harp on some well-known themes that have recently emerged. The Covid-19 pandemic and inflation have taken a big toll, according to various surveys. Not only the poor but the lower-middle-income households are also still bearing the brunt of the harsh economic conditions. There is also renewed fear of continued volatility in the grains and oil markets. Additionally, foreign governments have been constantly reminding the ruling party of the need for free and fair elections.
Bangladesh needs foreign investment, and the three rating agencies – Moody’s, S&P Global Ratings, and Fitch – have singled out the institutional weaknesses, diminishing foreign exchange reserves, and constant political uncertainty, and have cautioned the government about the heightened external vulnerability and persistent liquidity risks.
At this point, what are the economic hazards facing the nation as we get closer to the election? Poor infrastructure, corruption, misappropriation of public resources, and illegal transfer of funds overseas could start the list. There is concern regarding the rising trajectory of the debt level and choice of sources of affordable energy. There’s also the country’s vulnerability to climate change and natural disasters. And international lending agencies have once again lent their voice to addressing infrastructural gaps, and urged the government to pivot towards green growth to boost support for sustainable development. In addition, net reserves are expected to be lower following Bangladesh Bank’s commitment to the IMF to start reporting net reserves excluding the Export Development Fund (EDF), which has been inflating the reserve balance on paper. We can only wait to see what fate these factors will spell during the election.
As seen across the globe, when an incumbent party is in charge, they promote what it has done in the past and what it will deliver if reelected. On the other hand, the opposition parties don’t have the same leverage and can emphasise two things on the economic front.