There is no confrontation between economic development and democracy. There is no guarantee for economic development even if you have democracy. There is also no guarantee that economic development and democracy would supplement each other. What is mostly needed is that the good governance and political democracy must ensure that, economist Zaid Bakht tells Shakhawat Hossain in an interview with New Age
New Age: The ruling Awami League and its partners claim these days that economic development is more important than political democracy. Do you agree?
Zaid Bakht: I do not think that there should be any option for choosing one between the two. One should not go for either one between economic development and political democracy as they go hand in hand.
But what needs to be taken into consideration is that political democracy may not be sufficient to ensure economic development. The necessary precondition for economic development is good governance and the rule of law. That may not be guaranteed by political democracy alone.
New Age: Why do you think the Awami League, which has fought for political democracy in the past, has now resolved for development without democracy?
Zaid Bakht: This is an issue for political thinkers of any party to discuss. It does not fall into my area of expertise. A political expert should interpret whether the decision by any traditional political party is correct or incorrect.
New Age: How do you evaluate the ‘development’ taking place under the present political regime? Are the people at large getting significantly benefited from the development model, if there is any, that the incumbents are following?
Zaid Bakht: Bangladesh has been on the rise regarding its growth since the early 1990s. The average annual GDP growth rate in the 1990s was more than 5 per cent but the average annual growth rate was around 4 per cent during the 1980s. The growth rate increased to more than 6 per cent in the decade after 2000. Since then the growth momentum has tapered off somewhat but the country has been successful in maintaining a respectable growth rate of more than 6 per cent. The per capita GNI has been rising steadily and Bangladesh has already crossed the threshold level to become a low middle-income country.
If we look at the sources of growth in recent years, we see that the agricultural sector, the export-oriented apparel sector, small and medium enterprises and the services sector played a major role in the process. These are all employment-intensive sectors and, hence, the growth seems to have been quite broad-based. A steady growth in remittance inflow has also contributed significantly to increasing domestic demand, particularly amongst the low-income people in rural areas. However, income distribution seems to have been worsening with time.
Bangladesh has been maintaining a stable macroeconomic situation with a moderate level of inflation, less than 5 per cent budget deficit, a healthy balance of payment situation and a stable exchange rate. Bangladesh’s achievement, according to social indicators, has also been remarkable and appreciated worldwide.
One development strategy that the present government has followed is that of expansionary fiscal stance. It has so far worked well. But unless the government succeeds in resolving binding constraints to private investment and accelerating the pace of private investment, moving to a higher growth trajectory will not be possible.
Besides, the government needs to be careful to address the inequality which is growing. Many thinkers say that inequality grows with the economic development. In our country, inequality is on the rise because of corruption and unearned income. Some individuals became owners of banks overnight. All this led to the growth of inequality. I would say that the present ruling party should not be solely blamed. The issue has been accumulating.
New Age: Is a meaningful economic development possible without people’s democracy?
Zaid Bakht: There is no confrontation between economic development and democracy. There is no guarantee for economic development even if you have democracy. There is also no guarantee that economic development and democracy would supplement each other. What is needed most is the good governance and political democracy must ensure
New Age: How do you think Bangladesh can combine democracy and development?
Zaid Bakht: I have answered the question at the beginning. The critical requirement for sustained growth is good governance and the rule of law. If these two are not ensured, mere pretence of political democracy is not going to serve any substantive