Dear incoming government: It's the economy!

Published in Daily Star (November 2008)

http://www.thedailystar.net/story.php?nid=65467

Dear incoming government: It's the economy!
Faisal Salahuddin

WHAT would be a good translation of Bill Clinton's famous campaign slogan: "It's the economy, stupid?" A poor half-translation is: "It's the economy, bekup." It is difficult to choose between “bekup" and “boka." Unlike “bekup," the word “boka" embeds too much unintended affection and too little grudge.

Some grudge is appropriate since glaringly missing from our parties' campaign menu so far has been an intelligent and informed discussion about the economy. Parties so far have offered only some vaguely soothing but impotent headline promises like: "Bangladesh without poverty." With no details whatsoever.

Perhaps a good part of it is due to the uncertainty regarding election and the backstage drama. Perhaps some of it is due to the parties' either overly optimistic or pessimistic forecast of their own chances of electoral victory. Hence their conclusion is that issues don't matter anyway at this late in the game.

But I fear a large part of it comes from our bi-partisan culture of rear-view politics where insincere rhetoric is often passed as intelligent agenda. This strategy combined with our strong anti-incumbency bias generally worked well in the past. But will it in the coming years as times are changing (as is our electoral landscape)?

Changing electoral landscape

Let's get an aerial view of our electoral landscape. In this election, over one in three is a swing voter; one in four is still undecided. Blind party loyalty is thinning -- in some places as many as half the voters are open to voting for a different party (The Daily Star-Nielson Survey).

If you think the size of the swing (37%) or undecided (23%) voters don't matter much, think again: In 1996 AL won by increasing its vote by slightly over 4%; in 2001 BNP by about 7% (sure, coalition arithmetic played its part too).

If you are still not convinced, note this: more than half (108) of the total BNP seats in 2001 were decided by a vote swing of 8% (Nazim Kamran Chowdhury, Prothom Alo, October 2006)So swing voters matter.

Since swing voters like swing dancing, economy will increasingly matter even more. The Daily Star survey also tells us the single agenda voters now care most about is economic: inflation. Then corruption, law and order -- also related to the economy. See, it's mostly the economy, buddhiman!

Puzzlingly enough, as we stand a month before the election, why does the topic of economy still resemble that of sex? Everybody knows its importance but no party is talking about it.

Unless we openly and responsibly talk about it with our candidates (or the other way around?), take electoral precautions and then vote accordingly, we might end up with some unpleasant economic STDs (stealthily transmitted diseases).

Let's talk about jobs, baby!

The next government will face enormous economic challenges. Let me point out a big and obvious one: Labour force under its tenure will grow by over 10 million.

Let me restate: total new jobs needed over the next 5 years is more than our total workers in the garments industry and in the Middle East put together (Figure 1).

That's daunting when you consider history. It took us 30 years to build the garments industry. At an average pace witnessed during 1997-2007 (about 300 thousand per year), it will take over 30 years to create 10 million jobs through only manpower export to the Middle East.

What is even scarier is that with the ongoing global slowdown, these two previously reliable valves -- garments and labour export -- to release job pressure may not be as reliable anymore.

It's not just that only voters should care about jobs and the economy. Parties themselves need to care about the economy out of self-interest. If you think inflation is unbearable, wait till voters feel inflation when they are unemployed. If parties want a recipe for political suicide, here is one: take rapid urbanisation, mix it with unemployment and then sauté with the high or even low heat of inflation over the next five years, and add some social salt of crime and poor law and order. Then serve in any portions on any plate. Suicide guaranteed.

Our politicians already know the importance of job creation for their own constituents. Some are used to creating jobs for party workers through phone calls to the their industrialist friends. You can create ten jobs using that model but not 10 million. For that you need labour-intensive export-led manufacturing growth and sound macroeconomic policies.

Needless to say that job creation does not mean jobs in the public sector. It has to be through private sector-led industrialisation. But that can happen only if government provides an enabling environment through appropriate policies. In other words, after providing a smooth dance floor and the right music, government should get out of the private sector's way.

I argued in July 2008 Forum piece "The Tentative Tiger" that the Bangladeshi economy is showing many early signs of take-off. The next elected government will get a chance to shape the quality and the trajectory of that take-off. Don't we as voters have the right to ask our politicians if they are good pilots?

That is why parties now need to spell out their economic agenda. It will help voters. It also help parties think through their own challenges of being either a responsible ruling party or an effective but constructive opposition.

Yes, I am assuming they want to be so. It takes two -- ruling and opposition parties -- to tango and to grow in a democracy.

We have many questions. What economic vision do the parties have for Bangladesh over the next 5-10 years? How would they implement that vision? What would their signature macroeconomic policies be? What are their plans to improve business environment? What would the social safety nets be and how would they be financed?

Some of these are complex and medium-term questions -- some with no quick answers. But we need to know how our politicians are thinking about them. And how thoroughly?

Is it too much to ask?

Only a month away from the election is it too much to ask:

1. That both the party leaders give us their economic vision of the country for the next ten years? Some specific proposals please -- not just headlines.
   
2. That we have a series of televised debate about their promises regarding issues like hartal, power sector, ports, inflation? Perhaps common citizens and business leaders could be in the audience and ask questions.
   
3. That, last but not least, both the print -- and the tele-media along with the bloggers and netizens give a more prominent and thoughtfully thorough coverage of parties' economic agenda or lack thereof?

A simple equation captures the economic urgency of the next government: 5 years and 10 million jobs equals to 2 million jobs a year.

Only a month away from the election is it too early for our parties and the MP candidates to tell us: how?


Faisal Salahuddin, a macroeconomist, can be reached at faisal.salahuddin@gmail.com