Balancing development with sovereignty

Professor Nurul Islam describing Bangladesh authorities and donors as unequal partners in his book Making of a Nation, finds it ironic that the donors who have been emphasizing right from the sixties on the need for implementation of appropriate macro and micro policies have continued even today to nudge forward Bangladesh development strategy instead of it being country owned. Over the years, writes Professor Islam, the donors' priorities have ranged from basic needs, poverty, human development, environment, gender, children to participation, social inclusion, human rights, and political freedom.

It is inevitable that the donors would ask for good governance from recipient countries. After all, aid money, despite its declining importance as a percentage of GDP or public expenditure (it declined from ten percent of GDP in the seventies to less than three percent in 1998), comes from taxes collected from the citizens of the donor countries, and the donors are accountable to their respective parliaments and in turn to the electorate. Unsurprisingly, therefore, the donors insist on good governance, meaning accountability, transparency, participation, and predictability. The donors, regardless of the quantum of aid being given, are thus upset at the slow progress of reforms and the failure of the authorities to improve governance. According to the World Bank, bad governance has a high cost that retards the rate of growth and particularly hurts the poor.

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Bangladesh is counted among the poorest countries of the world. Most of the people have insufficient income to provide for a minimum standard of living, there having been no appreciable reduction in the number of people living in extreme poverty. In Marxian analysis, the poverty-stricken masses have nothing to sell but themselves, as opposed to the few whose wealth increases constantly. Inevitably the process of accumulation of wealth is corruption-ridden.

Yves Menay has ascribed four invariant characteristics of corruption: (a) violation of social rules and norms; (b) secret exchange among political, social and economic markets; (c) illegal access given to individuals and groups to the process of political and administrative decision making; and (d) resultant tangible benefits to the parties involved in the transaction.

By any definition, corruption is illegal, and in the first instance results from collusion between political and money elites -- the first party abuses the public trust for private gains of both parties. The former country director of the World Bank in Bangladesh was candid enough to publicly point out the "system loss" in the power sector resulting from collusive theft by the employees of the sector and the consumers, port inefficiencies costing over $1 billion a year, governance problem and inefficiency in the banking sector slowing down GDP growth over one percent per annum, and Taka 30-40 crores of public procurement lost every year due to corruption.

Giving a detailed analysis, Frederick Temple concluded that Bangladesh was losing 2-3 percent of GDP growth a year due to corruption. His successor Christine Wallich was more circumspect yet no less pointed in her assessment of governmental inadequacies holding up the growth rate of our economy. The GDP loss should be seen in the context of global interpersonal inequality in which the rich are getting richer and the poor are getting poorer. If the nomination of Paul Wolfowitz for the presidency of the World Bank is any indication of things to come, then countries like Bangladesh in these days of abridged sovereignty may wish to avoid display of aggressive nationalism despite seething anger felt by the authorities at the exogenous intrusion in our internal affair.

Lest we forget, the question of morality is being raised in judging both the national and international behaviour of states and the evaluation of the code of conduct, more or less uniform in character, prescribed to be followed by the civilized states have placed morality as the centre-piece in the global theatre. Perhaps one of the greatest benefits of decolonization has been the imperceptible regression of presumptions relating to "racial superiority and civilized mode of behaviour" of the metropolitan people vis-a-vis those living in the periphery, and the gradual metropolitan recognition that the subalterns, at least some among them, are no less qualified than they are.

There is, however, no denying the fact that the world divided as it is into First, Second, and Third (or even Fourth), does testify to the great existential divide among the people living in these well defined worlds where division is more vertical than horizontal and promotion from one to another is well-nigh impossible.Ê As it is from the beginning of history social stratification or societal division based on wealth, power and status has been a defining characteristic of civilizations. Social stratification took global shape with the advent of colonization, and poverty began to be distributed among the people living in the periphery and the wealth of the periphery was shipped to the metropolis.

One of the most bizarre aspect of colonization was the self-assumed patriarchal attitude of the colonizers towards the colonized, and their missionary zeal to carry on their shoulders "the White Man's Burden" of educating the "natives" unable to stand on their own two feet. Little heed was paid to the scholars who committed the sacrilege of pointing out that though some among the "natives" were indeed cannibals, a vast majority of them were adorned with etiquette and mores which were far superior to the ones the metropolitans were determined to impose on them. In effect, both in their own lands and in the conquered territories, the colonizers were subscribing to the first principles of Scottish socialist philosopher Robert Owen, who theorized that it was necessary for a large part of mankind to exist in ignorance and poverty to secure for the remaining part such degree of happiness as they now enjoyed.

During and after the process of decolonization, the newly and aspirant independent countries began to question the hypothesis inherent in the modernization theory which explained underdevelopment in terms of lack of certain qualities in the "underdeveloped" societies such as drive, entrepreneurial skill, creativity, and problem solving ability. The articulate among the freed people, rebelling against intellectual dystrophy and sanitized academic orthodoxy, by and large put their faith in the dependency theory, which explained that the continued impoverishment of the third world was not internally generated but was a structural condition of global domination in which the dominant forced the dominated to be producers of raw materials and food stuff for the industrialized metropolitan centre.

However, the entire colonial discourse should not be seen through the binary structure of good and evil, because the colonizers were not totally exploitive in nature but were also donors of liberal values and compassion shown by the West through aid to tsunami victims and the expected financial pledge following publication of the report by the Africa Commission. But lot remains to be done for the developing countries to move forward. Foreign aid is yet to be given at the 0.7 percent of GDP pledged by the developed world decades ago. The US and EU are yet to get rid of farm subsidies which are many times more than the assistance given to the developing world. Tariff and para-tariff barriers imposed by the developed countries on the exports of the developing nations are yet to be removed. Debts owed by the poorest countries are yet to be written off.

The question which can be asked of the Bangladesh authorities is whether they would advance the dependency theory of development as an excuse for their inability to further socio-economic development of the country. Danish expression of serious concern at the deterioration of governance situation especially of the law and order situation and German readiness to enter into a dialogue with Bangladesh authorities on how to ensure free and fair elections should be treated as constructive advice given by friends.

More importantly, the donors' developmental aid and assistance policy these days includes good governance in the recipient countries where they would like to see multi-party democracy, respect for human rights and rule of law, government with the consent of the governed, accountability, equity, and poverty concerns are being addressed. Many of the demands made by the donors of the recipients may not be readily available in those countries yet to make "developmental transition," and excessive donor influence also raises the question of incursion into sovereignty of the recipient countries. In the tussle between the donors and the recipients, particularly after the disintegration of the Soviet Union, the developing world is still struggling with the question as to whether capitalism is the right path to development.

Sir William Ryrie suggests "market economy" is the way to go for the third world -- where market economy is defined as "properly regulated capitalism," a system which seeks to maximize economic efficiency and growth while minimizing the social ills and injustices which unfettered capitalism can throw up. Though for the market system to operate perfectly would theoretically demand withdrawal of the state, experience has shown, particularly in the third world, the role the state must play to ensure proper development of the market economy. In short, the state must ensure that the system and services needed for a market economy to function efficiently exist. Importantly, the legal system embodying the commercial and corporate law must exist. The state must also ensure an environment of competition, and both Adam Smith and Karl Marx agree that capitalists naturally do not want competition and try to avoid it. The basic infrastructure and social services must also be provided by the state.

The point in question currently being debated is the limit put on sovereignty through infusion of transnational capital, be it in the form of aid, loan, or investment. Despite Professor Niall Ferguson's exhortation that the US should take up the call of history and behave like an empire, because otherwise the power vacuum would be filled with "[an] anarchic new Dark Age, an era of waning empire and religious fanaticism, and civilization's retreat to a few fortified enclaves," the relentless erosion of Westphalian sovereignty continues to frighten.

In the ultimate analysis, umbrage taken by Bangladesh authorities over public criticism of its domestic behaviour lacks moral clarity. Political dystrophy and dissonance, destroying the present and shrouding the illumination of the future, cannot but invite international criticism. Space must be given to all shades of opinion to air their views, so that inequality, polarization, poverty and misery do not lead to social exclusion of a large number of people. Satow's guide to diplomacy and the Geneva Convention on diplomatic practices are not immutable religious texts, but are subject to interpretation and integration of new commentaries. Sovereignty should not be so brittle that it cannot withstand constructive criticism. The solution lies in mending one's aberrant ways and to be in total compliance with the internationally accepted code of conduct.

Kazi Anwarul Masud is a former Secretary and Ambassador.