Fight For Legitimacy

Referendum guarantees governing norms Practice brings true reforms.

In his first televised address, Chief Advisor called the people to decide the date of their departure. He made the plea after some left-leaning quarters raised concerns about the duration of the interim govt. He also called the political stakeholders to fix the date of election. As I have written in one of earlier pieces, Prof Muhammad Yunus was brought to power to fix the economy, the reform program is just a smokescreen. And the idea is working! Economy has got a positive signal. Remittances coming faster than we thought,foreign budget assistance is also coming. The new governor divulged that he would approach the IMF for another $3 billion for the budget support, making the total IMF credit package $7.7 billion. However, govt is reluctant to depreciate the currency further,apprehending upward trend in price levels. Crawling peg is still in favor of govt's stance. But still there is ample room for taka depreciation and I think it will be good for the country in the long run. Crude oil price and grain price could be the deciding factors, the two shapes the lives of people here, for picking up the appropriate time to depreciate the local currency.

Meanwhile, the economy is in really bad shape. The true picture of the battered economy is surfacing. A news report says between 2015 and 2019, govt projected GDP growth rate was 3% higher than what it had actually been. The report alleged that former finance minister actively participated in manipulating inflation and GDP data in connivance with some BBS officials. The former minister even went into a loggerhead with the World Bank country office¹. When the inflation data is flawed, interest rate and business decisions will also be flawed. In one of my pieces, I argued how flawed inflation data could affect IRR based investment decision making(see "Slow Alignment Costs Investment",October 05,2023).Meanwhile, inflated GDP estimate is used to increase public expenditures in politically motivated projects and unproductive sectors.

The incumbent chief election commissioner Kazi Habibul Awal raised important issues about the status of this interim govt in an opinion column. The point he wanted to make is that it is a govt came through a revolution and supported by the Army. To make interim govt's decisions more effective, it has to make some order/decree stating that its decisions even if contradictory to the constitution will enjoy special status and be above the constitution. Since it is not a military govt, it is not being governed by martial law,which postpones the constitution. So his suggestion is to postpone the constitution completely, or partially, or keep it with the ongoing decisions by issuing a decree that says all decisions taken by this govt will be deemed legitimate in future course of events. He thinks this will dispel any ambiguity regarding the decisions taken by this interim govt². This is a good point that the interim govt should pay heed.

I personally think the interim govt should go for a referendum with the draft reform policies it intends to undertake and duration of the govt to get a view of public perception. This govt is continuing the tenure of the past regime that will likely to end by January 05,2029. Since the former PM fled the country and has been accused of killing innocent people, the current govt assumed the power in the request of "students and citizens" to run the country and "steer the reforms".And constitution says election will be held by April 05,2029. In that light , it has ample time to rule the country. Since it is a "revolutionary govt" claimed by some, a referendum will give the much needed legitimacy to it and the decisions it has made or is going to make. Many of the people have not got an opportunity to vote in the last 15 years. They will be happy to give their decisions on how long they would like to see this govt. A ballot paper stating "1/2/3/4 years for this and that reform ( brief description of reforms)" or "no reform under this govt" will suit the need. Referendum will establish a high moral ground for the interim govt. Even if the govt looses the referendum, the advisors will also have a high moral ground to say that they respect people's verdict and decide to go. It will also throw cold water to quarter that has dubious intention and wants to rest guns on interim govt's shoulders.

The committee to prepare the white papers on corruption has just been formed. I am eager to see what white paper it will bring about on the corruption in the defense and in the establishment. Such "white paper",even if it sees the light, will ultimately decide the tenure of this govt. Police stations are not operational yet. I think many of the police personnel need to go through training session/ program to make sure who fits for the job and who does not. Speculations are abound that many got the job without completing the compulsory trainings ( 6-month for constables). At the same time uniforms need to be changed, police and Army uniforms can be made easily from any tailoring shop. Specially designed uniforms with features of authenticity and made in exclusive tailoring shop will prevent the uniforms from falling into wrong hands. Without fully-functioning police stations, it cannot ensure rule of law. It also needs police stations to continue the probe on murders of students and innocent people. The number of the dead reached 758 till August 29. Another reason for the interim govt to stay is to finish the probe of July massacre.

Coming back to economy. Govt abolished the ad hoc practice of raising the energy prices. Bangladesh Energy Regulatory Commission (BERC) will resume holding regular hearing on raising /lowering prices of energy. I still believe govt is continuing the monthly fuel price adjustment policy as per the conditions laid out by the IMF. It is a good practice as it stems leakages. A news report says Bangladesh Petroleum Corporation provided inflated projection of fuel prices that ultimately led to not lowering the fuel prices. Govt has to decide which projection or estimation should be taken into account in deciding the fuel price adjustment. I mentioned earlier fuel price adjustment is linked to depreciation of taka,which will make our goods more competitive and bring more remittances. Government has objectives like earning revenue from import duties on fuel and making BPC more profitable. But it should also weigh up decision about revenue from tariff and that about foreign currency earnings. Energy ministry needs to clear $470 million to clear the energy dues. A steady stream of export and remittances will make it smooth with the help of depreciation of the currency. It is also reported that former energy minister has stake in Vittol Asia,which owes $180 million to govt as energy payment, raising serious conflict of interest issues. Govt needs to probe this seriously and scuttle the deal if it is still in effect.

Govt declared metro rail "essential service" to bolster its security. The designation key public installation is not necessary.The Metro Rail Act ,which includes the Mobile Court Act(a repository of all the laws) ,is there to ensure its security. I leafed through the Metro Rail Act,it is a tough act. Despite the Metro Act, it was deliberately targeted. Here lies the spirit of reforms. If we do not respect the changes,do not practice the reforms, it is pointless to make reforms and changes. Instead of making the top-down reforms, just go for the bottom-up reforms: the ones people want the govt to make. In this regard ,govt should ask people, groups,communities and organizations to contribute their inputs into the reforms. Instead of taking all the burdens on your shoulder, just spread it to all and make the "reforms" more participatory.

References:

1. "Banowat Porishonkhaner Prodhan Porikolponakari Lotas Kamal(Lotus Kamal Main Architect Of Fraudulent Stats)",Daily Bonikbarta, August 25,2024. Link: https://bonikbarta.net/home/news_description/396456/%E0%A6%AC%E0%A6%BE%E0%A6%A8%E0%A7%8B%E0%A7%9F%E0%A6%BE%E0%A6%9F-%E0%A6%AA%E0%A6%B0%E0%A6%BF%E0%A6%B8%E0%A6%82%E0%A6%96%E0%A7%8D%E0%A6%AF%E0%A6%BE%E0%A6%A8%E0%A7%87%E0%A6%B0-%E0%A6%AA%E0%A7%8D%E0%A6%B0%E0%A6%A7%E0%A6%BE%E0%A6%A8-%E0%A6%AA%E0%A6%B0%E0%A6%BF%E0%A6%95%E0%A6%B2%E0%A7%8D%E0%A6%AA%E0%A6%A8%E0%A6%BE%E0%A6%95%E0%A6%BE%E0%A6%B0%E0%A7%80-%E0%A6%B2%E0%A7%8B%E0%A6%9F%E0%A6%BE%E0%A6%B8-%E0%A6%95%E0%A6%BE%E0%A6%AE%E0%A6%BE%E0%A6%B2
2. "Biplob O Farman : Songbidhan O Sarkar(Revolution And Decree: Govt And Constitution) ",Kazi Habilbul Awal, Daily Samakal, August 24,2024. Link: https://samakal.com/opinion/article/252561/%E0%A6%AC%E0%A6%BF%E0%A6%AA%E0%A7%8D%E0%A6%B2%E0%A6%AC-%E0%A6%93-%E0%A6%AB%E0%A6%B0%E0%A6%AE%E0%A6%BE%E0%A6%A8:-%E0%A6%B8%E0%A6%B0%E0%A6%95%E0%A6%BE%E0%A6%B0-%E0%A6%93-%E0%A6%B8%E0%A6%82%E0%A6%AC%E0%A6%BF%E0%A6%A7%E0%A6%BE%E0%A6%A8

[*Update: this piece has been updated on September 02,2024; update includes inclusion of reference to IRR based decision making.]