5-points against Tata Projects in Bangladesh

Posted by Radical Notes June 13, 2007 at 3:14 pm in Bangladesh, Economy

S. Nazrul Islam

Economists are famous for making ambiguous, guarded, and qualified statements. However, at times a spade needs to be called a spade. Press reports indicate that the wheels of the government machinery are turning towards an approval of the Tata investment proposal.

This is one such occasion when clear statements need to be made, and here is one statement — the Tata investment proposal is not good for Bangladesh, and neither the current (unelected) nor the future (elected) government should approve it. Since this is not the place for a detailed and technical discussion, I will present 5-points against the Tata investment proposal in the following blunt manner.

Export of gas in embodied form

The Tata investment proposal is basically a proposal to export Bangladesh’s gas in another form. Under this proposal, the gas will be used to produce steel and fertiliser, much of which will be exported to India and other parts of the world.

How can Bangladesh agree to such a proposal when she herself is in dire need of her limited gas reserves to meet current and, in particular, future domestic demand? According to reports, Tata is demanding a 20 year guarantee of gas supply at a concession price.

The Daily Star of May 15 reports that the executive chairman of the Board of Investment (BOI) is advocating Kafco formula as the model to follow in deciding the price at which gas will be supplied to Tata plants.

This is tragic indeed! He should read some of the articles written by Prof. Nurul Islam to know that Kafco has proved, and is proving, a bleeding wound for the government exchequer. Extension of the Kafco formula to Tata will simply increase the bleeding.

The proposed Tata investment is of the predatory type, aimed at taking away the limited amount of non-renewable mineral resource (namely gas and coal) that the country has. It is, therefore, not a good idea.

Very limited employment expansion

The proposed Tata investment will not lead to any sizeable employment expansion, and hence, there will not be any appreciable “trickle down” benefit from this investment. The steel plant, the fertiliser plant, and the power generation plant, are all very capital intensive, employing at best a few thousand people, many of whom will be coming from outside the country.

In a country of 150 million, several thousand jobs will hardly make an impact. Tata investment is not aimed at utilising Bangladesh’s renewable and abundant resource, namely the labour force.

The Tata investment is, therefore, entirely different from foreign investments coming to the garments, textile, and other labour-intensive industries (in SEZ and EPZs) which together are creating hundreds of thousands of job for Bangladeshis.

While Bangladesh may welcome foreign investment aimed at utilising the country’s renewable resource, labour, it should be equally wary about Tata’s predatory proposal. Equating these two types of foreign investments would be a grave mistake for Bangladesh.

Very feeble forward and backward linkages

The Tata investment will benefit Bangladesh very little in terms of forward and backward linkages. The reach and width of the forward linkage is very limited because most of the steel and gas produced will actually be exported to India and other destinations.

There is not much of backward linkage either. All the machineries for the plants will basically come from outside. There will be very little input demand to be met from Bangladesh’s domestic sources, other than, of course, gas and coal.

So, instead of providing a big boost to the entire economy, the Tata plants will remain as an enclave without much of a link with the rest of the economy, an enclave whose main purpose will be to siphon away the country’s mineral energy resources.

Wrong industrial structure

Tata investment will be a step toward a wrong industrial structure in Bangladesh. The other day even Indian Prime Minister Manmohan Singh lamented India’s oligopolistic and government patronage-dependent industrial structure (see The Daily Star of May 14). Being one of the largest industrial houses of India, Tata is the pre-eminent member of this oligarchy.

When India herself is regretting, it will be a grave mistake on the part of Bangladesh to gravitate toward an oligarchic industrial structure by approving the Tata investment proposal.

In the case of Bangladesh, the damage will be all the greater because Tata is a foreign entity. If allowed to go ahead, Tata investment will lead to a lopsided industrial structure dominated by a foreign giant.

This is exactly the kind of industrial structure that Bangladesh should avoid. Bangladesh may, instead, follow Taiwan’s example of fostering a non-oligarchic industrial structure populated by numerous small and medium sized plants and companies.

Taiwan’s non-oligarchic and more competitive industrial structure has served her well, as the comparative experiences of Taiwan and Korea in the face of the Asian financial crisis at the end of the 1990s amply demonstrated.

While the chaebols-dominated Korean economy plunged into a deep recession, Taiwan was hardly affected by the crisis. Chaebols were oligarchic and dependent on government patronage, exactly the characteristics of the proposed Tata investment.

In the case of Korea, at least the chaebols were national companies. In case of Bangladesh, Tata is a foreign company.

Worrisome influence on the nation’s body politic

The final point arises from the fact that, in many respects, Bangladesh is still a weak state. This state already finds it difficult to withstand the predatory onslaughts of domestic capitalists.

It will find it even more difficult to withstand the influence and pressure of a giant like Tata, which will in general enjoy the support and sympathy of the state of India. In fact, the commercial interest of Tata may emerge as an additional complication in the good neighbourly relationship between Bangladesh and India.

Having occupied a significant industrial and physical space inside the country, the company will be in a position to exert considerable influence on the state and body politic of this nation, and it is difficult to be sure that this influence will always be beneficial.

The way Tata is trying to get its investment proposal approved during the tenure of the current interim, unelected government does not bode well in that respect.

Above are the 5-points against Tata. Of course, all these points can be further elaborated and substantiated. In fact, Prof. Wahiduddin Mahmud’s report on the Tata investment proposal, published earlier by this newspaper, does so in many respects.

There are also other discussions and analyses available. However, the important point is that if bureaucrats and other decision makers develop private interests in the project, then no amount of argumentation and analyses will help, because they will simply play deaf and blind and do their own thing.

The current government’s anti-corruption drive has been targeted so far mainly toward politicians. However, many bureaucrats, too, had an important role in the corruption, embezzlement, and selling-out of national interests to foreign companies that the nation witnessed in the past years. It is difficult to believe that they have all rectified themselves.

The present government has set the good precedence of confiscating ill-gotten wealth and bringing such wealth back to the country from outside. What this means is that, sooner or later, those who want to enrich themselves at the expense of the nation can be brought to book.

They should know that the people of Bangladesh, including non-resident Bangladeshis (NRBs), are watching. The remittance money sent home by NRBs has now reached almost $6 billion per year, exceeding the country’s combined net export!

Tata’s total investment figure, which many suspect looks bigger on paper than its actual worth, pales by comparison with the investment that NRBs are making in their country each year, and they are not planning on remitting the investment income!

So, for the Bangladesh economy, NRB remittance is the real source of investment, and the authorities should try to make the best use of this resource.

NRB remittance, together with the garments export earning, is keeping Bangladesh afloat. Both of these owe to Bangladesh’s main renewable resource, namely labour. The government should focus on making the best use of investment, both domestic and foreign, that is labour-intensive.

It should save the country’s limited quantity of mineral resources for optimum domestic use. It should, therefore, say “Thank you, but no!” to the Tata investment proposal.

COURTESY: Meghbarta

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Bangladesh now: a showpiece of pax americana

Posted by Radical Notes June 13, 2007 at 1:17 pm in Bangladesh, Agrarian Question, Imperialism

Soumitra Bose

If things come the BUSH-BLAIR or rather EMPIRE way, we would have all over the earth what we now see in Bangladesh. The country is run now by what is eulogized as a “caretaker government”! Yes, care is what they are taking, of what, however is the question?

Political activities are banned. It is still an “ideal democracy”. No one is allowed to spell ill about the government, no one can and will criticize those handfuls that are running the show, or rather are seen as running the show. Show, however is actually run by the army, and everyone in the street knows it. There are “wise” men - a handful, who decide or decree whatever will be next step and there would not be anyone who can question.

The middle class, who has lived and thrived in Bangladesh for more than 35 years now is happy and even conceited as ever, because they feel and “see” that corruption is not there, political Mafiosi are all behind bars and yet the middle class as it is always throughout the world do not see what they do not want to! Just today, news came out that the Chief of the caretaker government is willy-nilly [as no one is allowed to directly mention even the name of the person for any allegation processing] involved in a huge financial scam. Social laws never go wrong… one has to give some time to prove them! When supreme power is bestowed on some one and the person is not answerable especially in the perspective of the most corrupt economy then obviously power would corrupt and absolute power would corrupt absolutely.

Democracy, of whatever sham form brings out the news some time down the line and makes powerful ones accountable in whatever inadequate way it can, but when democracy is shelved and withheld, it becomes the golf-lawn for political oligarchy.

Every one in the streets knew what happened in Bangladesh was a coup masterminded by US consulate. It all started like the following. The US under the aegis of their war against terrorism found out that Bangladesh housing all different hues of fundamentalists and Islamist terrorist and even some other terrorist whom the US considers dangerous. The US intelligence found additionally that the Bangladesh army is the most corrupt institution and Taliban literature and demagogy and pornography. Bangladesh army and the embedded pro-Taliban functionaries were looking up to a hypothetical situation of attacking India with the help of Pakistan and other Middle Eastern Muslim countries. Things did not turn up as they planned. Musharraf fell to US game plan and turned his guns against Taliban and fundamentalists. So the Bangladesh army functionaries who were polishing their armaments toward an imaginary India-attack lost the steam.

Meanwhile the US sprang into action. The US consulate increased the efforts of negotiating and coaxing and cajoling the political leaders, but could not get very favourable responses despite their bribing and threats. This was because of the incendiary situation created on one hand by the growing labour unrest and other political movements of the people against globalisation and the growing dismay of the people against the anti-Muslim US policies. Faced with this situation, the US slashed the final threat to Bangladesh army. They said all foreign stints for Bangladesh army personnel in peacekeeping missions abroad will be terminated if Bangladesh army does not clear the fundamentalists from within its ranks. Money became more critical factor than baseless dreams of creating Muslim Umma in South Asia. Almost overnight the army decided to take on the chaotic political turmoil. They moved straight to the capital, made the then caretaker government sign on a draft that is now the writ. This draft was written allegedly [as you would get the information from the streets] by Md. Yunus and Justice Debopriyo Bhattacharya. Yunus the Nobel Prize winner always nurtured the dream of becoming the supreme man and yet could not cope with political criticism. Bhattacharya, a Hindu fundamentalist, would champion the cause of the Hindu minority. A new government was formed whose members were nominated by the US consulate. The new government arrested the main political leaders on account of some or the other corruption and criminal charges. The way Bangladesh was running all these charges are actually true. But the ulterior motive was to stop all political activities, which they promulgated and did and every kind of manifestation or organization was banned. People found overnight the local political Mafiosi quelled and they hailed the military. The bite was realized later. The prices soared up, economy dwindled, and administration anarchy shot up and the producing forces found their voices gagged. All came very soon on the heels of the famous and heroic people’s upsurge of Phulbari and Kansat. People took up arms against the imperialist marauders and trans-nationals. TATA’s project was shelved and very interestingly and very co-incidentally those upsurges took place when across the border the other Bengal took up arms with iconic presentation of Singur and Nandigram. The South Asian intellectuals and the conscious people equated Phulbari, Kansat, Singur and Nandigram in the same line against imperialism and globalisation. This was too much. Messages need to be sent and liberalism was inadequate. US sent a message across the border within India and very concomitantly they pressurized Musharraf. When Leftists in Pakistan are jailed the ploy of “war against fundamentalism” fell flat. Peasants’ upsurge in the North West Frontier Province and Punjab in Pakistan, the Anti-SEZ movement in India, the rise of the Maoists in Nepal and the recent setbacks of the Lankan Army sent a counter message to PAX AMERICANA that people are now ready to take up arms at the drop of a hat. Bangladesh is the message of US imperialism. Phulbari, Kansat, Singur and Nandigram is the message of the people. Battle lines are drawn, the struggle will go on!. People of this vivisected sub-continent have lost all hopes on neo-liberal governance of repeated changes in form and essentially the same imperialist extraction. They are taking the path of massive militant upsurge. The future is going to be a totally unforeseen chapter of human history. What started in 1857 may spread like wild fire once again toward a second Freedom struggle.

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