Post Corona Virus- Global Change:

   Paper No. 6576                        Dated 9-May-2020

 By Kazi Anwarul Masud (former Secretary and ambassador of Bangladesh)

Very people doubt that a global change is in the offing. Debate surrounds about the nature of the change.

Change is nothing new. History of mankind has borne testimony to changes. From ruthless and sometimes benign monarchies, over thrown by guillotines, mass royal murders of the Romanovs, institution of ruthless doctrinaire so-called peoples’ revolution which massacred thousands of people through starvation or through negation of right to disagree.

Hubris of the likes of Kaiser Wilhelm of Germany too played a role in the death of one million people in the First World War notwithstanding other factors that also played no minor role. Many historians consider Wilhelm the individual most responsible for the outbreak of war in 1914. While opinions vary, there is a consensus that Wilhelm II’s brash leadership and imperialistic and nationalist agenda was a critical factor in the road to war. Wilhelm II’s main interest was in expanding the power, prestige and size of the German Empire. This was necessary, he believed, so that the German people could enjoy their “place in the sun”.

Historians believe that the burgeoning ‘German problem’ would have required exceptional wisdom, restraint and tact on all sides and particularly in Berlin, qualities which were spectacularly absent under the erratic personal military monarchy of Wilhelm II. The root cause of the First World War (and by extension of the Second World War too) was thus seen to lie in this fundamental conflict between Germany’s elemental drive for supremacy and the determination of Britain along with her continental partners to uphold the existing balance of power in Europe. Kaiser Wilhelm II was arguably the very last person who should have been entrusted with the immense powers of the Hohenzollern military monarchy at such a critical juncture in Germany’s and Europe’s history.

  

Perhaps one of the great lessons of history is not to repeat the mistakes of the past. Like Alice in Wonderland we and the surrounding forces are not similar and hence it is no use going back. The other lesson Alice has given us is though it is important that we care about our fellow human beings, but minding our own business when it comes to following the rules set for our own good and for the community gossip is better good rule to live by.

Without being pessimistic one has to admit that the war being fought to defeat coronavirus epidemic from past experience of Spanish flu, SARS, HIV, plague of the pre-modern era may look Quixotic   but to leave the millions to their fate is also not acceptable. Humanity’s journey from pre modern to modern to post-modern eras cannot go in vain. The main question we are trying to find the distribution of power in a multi-layered society where the emerging economies or at least the leaders among them would get seats at the high table.

There is a general consensus that post-Second World War state of affairs would not be tenable nor is it tenable now. The very existence of G 7, G 20 and other regional bodies are recognition of the fact that the world is already multi- layered. The question would arise how much the USA is ready to concede ground to the claim of Harvard University’s luminary Stephen Walt (The United States Can Still Win the Coronavirus Pandemic-April 3 2020) that the decline of US influence would result in end result in a world “that is less open, less prosperous, and less free” than the world of today.  Walt refers to National Security Expert Rachel Klein’s March 31 piece where she wrote:  global responses to date do not vindicate authoritarianism:

Some democracies have done very well in reacting to the crisis, and some dictatorships have reacted very badly. In other words, regime type doesn’t appear to be the critical variable here.

There is another reason why the United States may get out of this in better shape than one might initially think: the dollar. It remains the world’s reserve currency and is still considered a relatively safe asset in times of economic uncertainty”. Walt argues that the extent of long-term damage to America’s global position will depend on two main factors. First, can the United States get the pandemic under control at home, so that it can safely restart its economy and so that other nations will decide that Americans still know how to respond in a crisis? The country will have to do a lot better henceforth than it has done so far, but it certainly isn’t impossible. Second, does the United States maintain an “America first” approach to this global problem, or does it begin to exhibit the kind of global leadership that it showed after World War II, the 9/11 attacks, or the financial crisis of 2008. 

These are crucial questions to the world that abhors a system that denies Universal Declaration of Human Rights and imprisons human quest for knowledge beyond cosmos and acquisition of technology that will make life easier   being conscious of the fact that robots will replace human beings and make a sizeable portion of humanity unemployable.  There are always a cost-benefit analysis conducted in corporations and in governments when new products/methods are introduced. Intelligent governments like corporations look at shareholders or stakeholders benefits.

 In this case Australia’s former Prime Minister Kevin Rudd in a lengthy article (The Coming Post-COVID Anarchy-May 6 2020) has weighed with his views on the post-coronavirus global order. Kevin Rudd immersed as he was in his country’s politics and in Australia’s diplomacy should be taken with due interest by all those who bodes well for this planet. Rudd having been a strong US ally for decades (from the Second World War and remains a staunch ally in this region). Kevin Rudd opposes the common trend of thinking that Beijing has profited from the pandemic pandemonium.

On the contrary “the outbreak has opened up significant political dissension within the Chinese Communist Party, even prompting thinly veiled criticism of President Xi Jinping’s highly centralized leadership style. This has been reflected in a number of semiofficial commentaries that have mysteriously found their way into the public domain during April. Xi’s draconian lockdown of half the country for months to suppress the virus has been widely hailed, but he has not emerged unscathed. Internal debate rages on the precise number of the dead and the infected, on the risks of second-wave effects as the country slowly reopens, and on the future direction of economic and foreign policy” 

The economic damage has been massive. Despite China’s published return-to-work rates, no amount of domestic stimulus in the second half of 2020 will make up for the loss in economic activity in the first and second quarters. Drastic economic retrenchment among China’s principal trading partners will further impede economic recovery plans, given that pre-crisis, the traded sector of the economy represented 38 percent of GDP. Overall, 2020 growth is likely to be around zero—the worst performance since the Cultural Revolution five decades ago.

 Kevin Rudd has not been complimentary to the US either. He thinks fragmented establishment will constrain US‘s global leadership and more so as the economy will shrink considerably adding to a long list of unemployed Americans lining up for dole. In the ultimate analysis peoples’ distaste to be told what is to be done will win the day for liberal democracy. Hungary and Serbia , AFD in Germany and Marie Le Pen may for a while  increase membership but a repeat of 1938 Weimer Republic general elections that catapulted Hitler to power has no parallel to today’s pandemic situation. 

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Post Covid Scenario: Bangladesh At Cross Roads:

Paper No 6569                      Dated 3-May-2020             

By Kazi Anwarul Masud ( Former Secretary and Ambassador, Bangladesh)

 

Covit-19 has put many countries, rich and poor, in an unpreferred position to fathom the future politico-economic course for their respective countries

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Are they to abandon the system and institutions they had embraced for decades that had become in course of time their own? Some had digressed from the ones they had liberated themselves from, often due to feel they are different from their colonial masters whose main aim was extraction from the colonies to enrich their metropolis. The scale of extraction was immense and to the detriment of the disposed, not due to lack of resources but because they did not have the guns to fight the colonialists.

 

Though the colonialists viewed themselves superior to the natives Polish-British novelist Joseph Conrad in his Heart of Darkness asserts that there is little difference between "civilized people" and those described as "savages." Heart of Darkness implicitly comments on imperialism and racism. Perhaps Joseph Conrad would put the circumstances as the dictator who decides whether London (in Heart of Darkness) was any better than Africa the dark continent inhabited by “uncivilized” people.

 

As the newly developing countries were trying to find their identity so did Marxism and Maoism were finding their own battle not so much on ideology but whether industrialized capitalists were sucking the blood of the common men or as Mao, revolutionizing rural China, felt that not the industrialists  but the feudal lords were sucking the blood of the farmers. Both Karl Marx and Mao Zedung were fighting the same battle from different contexts. Mao’s China has now been transformed into the second richest country in the world with vast geo-political armor in its grasp.

 

So political scientist have started a debate on the fate of the world in post-coronavirus world. Would we see Harvard’s Graham Allison’s description of Thucydides Trap which Allison described as a situation “when a rising power like Athens, or China, threatens to displace a ruling power like Sparta, which had been the dominant power in Greece for a hundred years, or the US, basically alarm bells should sound?” Nowadays many hear the loud sounding of the alarm bells warning the world of an impending “Thucydides Trap”. Chinese President Xi Jinping has chosen Belt and Road Initiative as the vehicle for spreading China’s influence in Asia and Africa and to convert the world into a multipolar system in which China as the second richest nation in the world will play a significant role in global affairs. The problem arises with Xi Jinping’s insistence on the primacy of the Chinese Communist Party in all affairs which with the advancement of technology would be able to peep into the bed rooms of the Chinese people.

 

China’s intrusion into the recent agitation in Hong Kong contrary to the agreement of “one country Two system” signed at the time of the British handing over of the colony to China is a blatant example of Chinese interference in Hong Kong. Xi Jinping’s authoritarian bent can be gauged from his analysis of Nikita Khrushchev’s 1965 speech on destalinization which in the Chinese leader’s opinion had opened the door to multiparty political system in then USSR. The point to ponder is when people have more disposable income the urge for more freedom of choice becomes inevitable. Chinese of this generation would not like to see a Tiananmen Square massacre not by foreign troops or  by their own.

 

Outwardly China is a showpiece for the world to see. Yet the rural areas have been denied the gains of development. Inequality among different segments are increasing. According to WIKIPEDIA China’s current mainly market economy features a high degree of income inequality. According to the Asian Development Institute, “before China implemented reform and open door policies in 1978, its income distribution pattern was characterized as egalitarianism in all aspects.”

 

Wikipedia continues to add that in December 2009 34 out of 50 leading economists thought that inequality would impede sustainable development. Harvard Economist Kenneth Rogoff also cautioned on the problem of income inequality, commenting that “There is no doubt that income inequality is the single biggest threat to social stability around the world, whether it is in the United States, the European periphery, or China.”[ Income inequality is argued to be a menace to social stability, and potentially causes a disappearance of middle class capital that would impede China’s economic growth. In a bold statement ] Hu Angang, an influential researcher in China, warned that further increases in regional disparities may lead to China’s dissolution, like in the former Yugoslavia.

 

Given the above situation one has to be cautious about BRI Initiative. Western governments and journalists want definitive information on BRI. The consider statements like "The Belt and Road is a $900 million/$1 trillion/$5 trillion dollar initiative spanning 65 countries, 60% of the world’s population, 75% of energy resources, and 30% of GDP” as more propaganda than plan of action. Some find it intriguing that Malaysia, Myanmar, Pakistan, Sierra Leone, Kyrgyzstan, among other countries have canceled, downsized, or postponed key BRI projects, and the initiative seems to be going through a period of retreat to an extent that some researchers are suggesting that BRI may have seen its peak.

 

Even if BRI partially succeeds we are far from answering the question of global construct in post-covit-19 situation. Some middle of the roaders reluctant to commit themselves either way have surmised: Humans can rein in their instincts and build societies that divert group competition to arenas less destructive than warfare, yet the psychological bases for tribalism persist, even when people understand that their loyalty to their nation, skin color, god, or sports team is as random as the toss of a coin. At the level of the human mind, little prevents new teammates from once again becoming tomorrow’s enemies. (This Is Your Brain on Nationalism Foreign    Affairs). 

 

If many nations face identity crises relating which path to choose in post-pandemic world a guideline could be the state of the economy.  Most of the developed economies are expected to contract. In the case of the US 26 million Americans have applied for unemployment benefits while the legal immigrants have paid more taxes and are considered dependable workers. This puts them in the eye of the storm as the object of “stealers” of jobs that average Americans consider to be their birthright. This is no different in Europe. In war devastated Europe many immigrants were invited as “guest workers” to clean the toilets and sweep the streets that full blooded Europeans refused to do. When the European economies could stand on its own feet no doubt due to the efforts of the locals the “guest workers” were encouraged to go back to their “home” that they had left decades back. Their descendants who were no less French or Germans refused to go to a country they had only heard of and had never even seen. When the crunch comes in spades justice flies out of the window. 

 

In Post-Brexit the rights of the non-British Europeans is going to be one of the thorniest points to be settled between Boris Johnson and his EU negotiator.   But then Britain and EU are on the same page of liberal democracy. In the case of the US and China it is the opposite. How can the world in particular the developing countries be coaxed into the illiberal camp just because of yet insoluble pandemic disease?  One may refer to the US hubris of “American Exception” which was noted by Alexis de Tocqueville in his book “Democracy in America”. Later on successive writers, notably Seymour Martin Lipset and in varying degrees Joseph Nye, Robert Kagan, Neil Campbell Ferguson have voiced American Exceptionalism. Lipset in his article (American Exception-A Double Edged Sword) quoted G.K.Chestersen: "America is the only nation in the world that is founded on a creed. That creed is set forth with dogmatic and even theological lucidity in the Declaration of Independence. . . ." As noted in the Introduction, the nation's ideology can be described in five words: liberty, egalitarianism, individualism, populism, and laissez-faire”. Lipset himself said: Being an American is an ideological commitment. It is not a matter of birth. Those who reject American values are un-American. 

From Monroe doctrine to the First World War to the Second Great War and henceforth the American leadership has remained constant. Vladimir Putin however cautioned about the danger of teaching a people that they are exceptional.

 

The real undeniable truth is that the world has become multipolar as G7, G20 and other regional organizations testify. In neck of the woods   South Asia would feel comfortable to cooperate with India though not at the exclusion of China a behemoth in the region. Despite bumps Bangladesh shares common history, India’s assistance in 1971 War of Independence argument notwithstanding that Indian refuge to one million Bengalis was not only due to humanitarian consideration. Her aim was the dismemberment of Pakistan. Geopolitical consideration must have played a role. But should we then forget incessant efforts by then Indian Prime Minister Indira Gandhi on our behalf and the number of vetoes given in the UNSC by then USSR to thwart the Western plan to force a political settlement with the murderous Yahya regime whose marauding army carried out the most barbarous genocide that can be matched only with Hitler’s annihilation of millions of Jews in the Second World War?

 

We have differences with India and we shall have in future more so with the present set up in Delhi which is following a Hindutva policy while housing 200 million Muslims in the country. But then it is for the Indians to decide whether article 370 and declaration of Ladakh as union territory, Constitution Amendment Act, and policy on National Register of citizens after more than seventy years of India’s independence are acceptable. Prime Minister Norendra Modi will have to face an electorate with an economy projected to grow around 2% in 2020 and 2021, huge unemployment and hunger in certain places.

 

So far as we in Bangladesh are concerned this writer is convinced of closest possible relations with India will be beneficial for Bangladesh. 

 

  

 

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China: How Credible that China Accidently or By Design Spread Covit-19?

Paper No. 6563                           18-April-2020

By Kazi Anwarul Masud (former Secretary and ambassador of Bangladesh)

Conspiracy theories abound. Main accuser is Donald Trump. Accused id Xi-Jinping.  Charge is very serious. Particularly when death toll has passed one hundred thousand. Is the charge tenable and incendiary at a time when time has stood still? The world does not yet know when it will be free from the scourge. Millions of people are losing or have lost their jobs. In the US alone post-covit-19 unemployment is expected to be 40% the highest ever in US history but during the Great Depression. In developing countries   conditions are expected to be dire. Nick Cohen a British journalist and political commentator writing in The Spectator found  WHO asleep at the switch and cautioned that the current state of vaccine development was  an expensive, slow and laborious process, costing billions of dollars, taking decades, with less than a 10 per cent rate of success.’         Cohen asked the people not to despair or return permanently to autarky and localism. With the right precautions, an open, free-trading, free-moving, innovating world is possible without pandemics and is essential for raising living standards. Government he said,  must both splash the cash and slash many of the things it does that are not urgent to alleviate human suffering, and there are a lot of them. Despite the obvious deadly impact of covet-19 on the health and the economy of the world people have started to wonder whether the space for democracy will not be squeezed in the post-coronavirus globe. Hungary’s right-wing government offers perhaps the most striking example of how a crisis of public health has been used to further authoritarianism. Prime Minister Viktor Orban has cited the virus spread to cancel all elections and remain in power indefinitely. He has invoked broad powers to limit air travel and individual movements. But there is no end date to the restrictions, nor any parliamentary review of his actions. For as long as Orban’s emergency orders are in place, he has claimed the right to rule by decree.      In Serbia, President Aleksandar Vucic has pushed for similarly extreme measures and relied on heavily armed police patrols to enforce his edicts. He too has undermined parliamentary oversight of his actions and assumed the right to rule by decree (Can democracy survive the coronavirus? SONALI KOLHATKAR APRIL 14 2020 ALTNET). One could argue that both Hungary and Serbia were part of the authoritarian regimes and their introduction to democracy has been of recent origin. But then again both are members of the European Union some of whose members in the past rose in rebellion against repressive monarchies and landed aristocracy. Though some people in some countries may for the time being feel at ease with strict disciplinary measures it is doubtful that these same people will countenance Orban and Vucic in the long run. In developing countries though due to lack of education, healthcare, and employment people caught in “poverty trap” may get used to authoritarianism and develop a thick skin to tolerate violation of their fundamental rights. Pakistan is an example where the armed forces either directly or through proxy have ruled the country ever since 1958 when General Ayub Khan imposed martial law in the country and ruled the country for a decade. Myanmar is another example where General Ne Win put the army in control since 1962 which remains the defacto ruler of the country despite a civilian cover. Bangladesh, a rebel with a cause since the British ruled the Indian subcontinent, has fought against the British and then Pakistani injustice and finally a bloody war of independence under the leadership of Bangabandhu Sheikh Mujibur Rahman. If some critics allege the present government, in power for more than a decade, of authoritarianism it is mainly because a credible opposition has  not been formed due to lack of popular support and the  inability of the   opposition party leaders failed  to enthuse    the people to embark on a mission to unseat the government.   It appears that despite weak administrative and Ministerial incompetence the present Prime Minister is incontestably the preeminent leader of the people and any talk of her replacement, be it voluntary or otherwise, and causes a shiver in the spine of the general people.  One may be reminded that Malaysian Mahathir Mohammed led the revolt against corrupt Negib government and became Prime Minister at the ripe age of ninety three. Joe Biden should he get elected to the US Presidency will be seventy seven when he takes oath in January next year.   Barak Obama’s endorsement of Joe Biden favors his chances of winning the November elections. More so as Trump has once again gained international opprobrium for his criticism of WHO for alleged mishandling of covit-19. The Coronavirus pandemic has involved the judiciary in the US on Wisconsin primary held on 7th April. After the State Governor’s order to postpone the elections to a later date was nullified by a Republican dominated state assembly who demanded that the elections be held as scheduled the case went up to the US Supreme Court where majority opinion held that the votes along with the absentee votes be counted on 7th April though many absentee ballots could not be sent by the state election commission to the voters. The Supreme Court saw the appeal as a narrow, technical question about the absentee ballot process. The Court held that       lower federal courts should ordinarily not alter the          election rules on the eve of an election and that the elections be held on 7th April. The decision was made despite the facts that in the weeks leading up to the election, the COVID–19          pandemic had become a “public health crisis.”  As of April 2, Wisconsin had 1,550          confirmed cases of COVID–19 and 24 deaths attributable to          the disease, “with evidence of increasing community. In a dissenting note Justice Ginsberg noted the   Governor’s order to postpone the elections to a later date until          slowing down of the disease.   Additionally gathering of the people at the polling place would poses dire          health risks.  Wisconsin voters—at the encouragement of public officials— turned          to voting absentee. About          one million more voters requested absentee ballots in          this election than in 2016.  Accommodating the surge          of absentee ballot requests heavily burdened election          officials, resulting in a severe backlog of ballots requested.   She further noted “While I do not doubt the good faith of my colleagues, the          Court’s order, I fear, will result in massive disenfranchisement. A voter cannot deliver for postmarking a ballot she          has not received. Yet tens of thousands of voters who timely          requested ballots are unlikely to receive them by April 7,          the Court’s postmark deadline. The Court’s suggestion that the current situation is not “substantially different” from “an ordinary election” boggles the mind….The majority of this Court declares that this case presents a “narrow, technical question.”  That is wrong. The question here is whether tens of thousands of Wisconsin citizens can vote safely in the midst of a pandemic”. With the majority’s stay in place, Justice Ginsberg, argued,   that will not be possible. Either they will have to brave the polls, endangering their own and others’ safety. Or they will lose their right to vote, through no fault of their own. That is a matter of utmost importance—to the constitutional rights of Wisconsin’s citizens, the integrity of the State’s election process, and in this most extraordinary time, the health of the Nation”.    Justice Ginsberg’s dissent note is an extra-ordinary chastisement of the Republican dominated Supreme Court who decided to follow an undemarcated line of loyalty for being appointed by Republican Presidents    to the nation’s highest judicial posts instead of the risks of contamination  to the voters to line up to cast their votes.   Most of the constitutions of the world provide for peaceful right to assembly. But the state reserves the right to place restrictions on the time, place, and manner of peaceful assemblies. In the case of social distancing and lockdown the governments may seem to have trodden on the right of assembly but when it is being done for the good of many and the people generally consenting to such compression of liberty such governmental actions should be presumed to have the sanction of the law.   Global projection on coronavirus suggests that at the end of the covet-19, unpredictable though it is now, half of the global population will live in poverty. Even before the pandemic hit the world multiple international indices ranked Bangladesh one of the world’s most natural-disaster prone countries.          Bangladesh joins a growing number of countries trying to endorse food as a legally binding right. Many international NGOs have been advising the government to regard food as a human right. Monisha Biswas, policy and advocacy manager for international NGO Oxfam in Bangladesh, said even though Article 15 of the constitution recognizes the state’s responsibility to secure the “basic necessities of life” for its citizens, - including food, it does not recognize a person’s right to food. As of December 2010 13 countries worldwide recognized the right to food or provided for state obligations relating to food and nutrition as state policy  and Bangladesh was one of them. Though it has not yet been legislated the decisions announced by Prime Minister Sheikh Hasina to reach food to the hungry and to sell rice at a very concessional rate to the poor are expected to meet the challenges thrown by covit-19 on hunger and poverty. Another challenge thrown by coronavirus pandemic is large scale unemployment both in developed and developing countries. 

In the US till 16th April jobless claims have exceeded 22 million in four weeks. It underscores how the downdraft has spread to every corner of the economy: hotels and restaurants, mass retailers, manufacturers and white-collar strongholds like law firms.        According to a prominent economist: “This is the deepest, fastest, most broad-based recession we’ve ever seen.”                Some of the new jobless claims represent freshly laid-off workers; others are from people who had been trying for a week or more to file. The US Commerce Department reported the steepest monthly drop in retail sales since record keeping began nearly 30 years ago, and the Federal Reserve said industrial production had recorded its biggest decline since 1946.     World output, writes Ishaan Tharoor in Washington Post, over the next two years will fall $9 trillion short of what was expected before the crisis. It is a loss akin to having Germany and Japan’s economies vanish, says Gita Gopinath, the IMF’s chief economist. More than 90 countries have petitioned the IMF for assistance, with poorer nations facing the looming prospect of debt crises and   political turmoil should they fail to secure fiscal aid from wealthier powers.  Will the world come back to its axis before the corona virus almost devastated many countries regardless of the rich or poorness of the regions and the countries? This is an important question facing all of us as China is advocating itself as possessing the best model not only to save people from pandemic the likes of which the world has never seen but also having the best economic model for others to emulate. This argument may get force from the fact of the American withdrawal from the role of the leadership of the world. Ever since Donald Trump declared his “America First” policy which effectively meant that the US would  look after its own  interest and the NATO allies  and the Bretton Woods institutions better listen to the US dictates, withdrawal of US troops from Syria, abandoning the fifty year old Palestinian policy and declaring Jerusalem as the capital of Israel, distancing US from the policies of its European allies, and most recently withdrawing support from WHO at a time when international coordination with WHO at the center was the call of the day. Domestically  Donald Trump declared the media as his enemy, frequently firing  senior policy makers from their positions( some like General Mattis preferred to step down), and being at odds with the Democrats in the House and the Senate, quarreling with the CNN journalist as an example, and most recently calling the popular Governor of Michigan as “that woman”. The list is endless.  The future both near and far will testify to the destruction wrought by Trump administration long after he is gone. Richard Hass, an American diplomat and President of the Council of Foreign Relations wrote recently ( The Pandemic Will Accelerate History Rather Than Reshape It-April 7 2020) “It is too soon to predict when the crisis itself will end. Whether in six, 12, or 18 months, the timing will depend on the degree to which people follow social-distancing guidelines and recommended hygiene; the availability of quick, accurate, and affordable testing, antiviral drugs, and a vaccine; and the extent of economic relief provided to individuals and businesses…Haas continues “Implicit in  “Trump’s America First” policy  was the assumption that much of what the United States did in the world was wasteful, unnecessary, and unconnected to domestic well-being ……        The pandemic is likely to reinforce the democratic recession that has been evident for the past 15 years”.  Opposed to that Mark Green, the outgoing administrator for the U.S. Agency for International Development (USAID), raised alarms about how refugees and displaced populations (71 million displaced around the world) will be affected by the pandemic and reflected on the Trump administration’s repeated attempts to cut funding for foreign aid.  It is difficult to accept a proposition that the US that prided on American Exceptionalism will become a second rate power conceding the preeminence     to China. Most of the countries of the world except a few African countries( Patrice Lumumba’s Congo, Zimbabwe, Guinea,Ghana, Tanzania) most of the newly freed nations adopted democratic elections as a way of changing power. In Asia SEATO, CENTO and other organizations kept these countries away from communism. One of the reasons was that the colonizers were European powers who had no tract with communism. China was no factor during the forties and fifties   when liberation movements were at their peak. As deeply flawed as Washington’s response to the pandemic has been so far, the United States’ power—distinct from any particular president—rests on an enduring combination of material capabilities and political legitimacy, and there are few signs that the pandemic is causing power to shift rapidly and permanently to China’s side of the ledger write Michael Green and Evans Medeiros  (The Pandemic Won’t Make China the World’s Leader Foreign Affairs) that “as deeply flawed as Washington’s response to the pandemic has been so far, the United States’ power—distinct from any particular president—rests on an enduring combination of material capabilities and political legitimacy, and there are few signs that the pandemic is causing power to shift rapidly and permanently to China’s side of the ledger. … Some leaders, of course, are embracing Beijing’s narrative and applauding its methods in combating the outbreak—including officials in Cambodia, Iran, Pakistan, and Serbia. But few of these governments have been newly persuaded by recent Chinese messaging; they have a long record of accepting Chinese political narratives and economic assistance, often at the service of their own power at home. Indeed, some early recipients in Europe of Chinese-made testing kits and protective equipment rejected them as substandard. Just this week, Finland’s prime minister fired the head of the country's emergency supply agency for spending millions of euros on defective Chinese facemasks”. China’s expulsion of journalists from New York Times, Washington Post and Wall street Journal have put question mark on China’s tolerance of transparency. Though China’s has toned down its attack that the US had spread the virus in Wuhan many countries have not forgotten China’s efforts to contain information when they realized that the virus had gotten out of their hands in December last year. In conclusion the world now more than ever has to fight this evil together. Time for bickering is not now. 

    

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The Challenges Facing the World Today: The case of Bangladesh

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Paper No. 6545                 Dated 23-Feb-2020

By Kazi Anwarul Masud

 American economist Geoffrey Sachs (Columbia University and an expert on economic development and poverty) considers geography of nations as a true driver of economic development “because it affects the profitability of various kinds of economic activities, including agriculture, mining, and industry; the health of the population; and the desirability of living and investing in a particular place…. As human-led climate change progresses, many regions could well be hit by devastating environmental shocks, such as heat waves, droughts, and floods, that are far beyond their control” (Foreign Affairs Sept/Oct 2012). Sachs counters monocausal theory of Daron Acemoglu and James Robinson’s (Why Nations Fail) that governments that protects property rights and represent their people lead their economies to prosperity and those that do not end up with stagnant and declining economies. State capitalism that promoted the economic development of South Korea during Park Chung Hee’s military regime coupled with those of China, Taiwan, Vietnam belie the claim that only capitalism with Western values can lead the country to prosperity. China today is the second largest economy in the world though its growth has been recently arrested by the outbreak of coronavirus disease that has virtually quarantined the country from the rest of the world. Given the fact that China accounts for 16% of the global output the disease is bound to have global impact in particular small Asian countries linked to China who do not have sufficient cushion to absorb the ill effects and may slide into recession.

A Reuter report sounds an optimistic note (London 20th February) to the effect that epidemics normally have a severe but relatively short-lived impact on economic activity, with the impact on manufacturing and consumption measured in weeks or at worst a few months. Even pandemics such as the Black Death (1348/49), Spanish influenza (1918/19), Asian influenza (1957/58) and Hong Kong influenza (1968/69) that caused large numbers of deaths had a brief impact on the economy. China's coronavirus outbreak should conform to this pattern of a severe downturn followed by swift recovery, provided it does not initiate a broader cyclical slowdown in the already-fragile global economy. China witnessed an economic growth of 6.1 per cent in 2019, the slowest in recent years. And the International Monetary Fund expects it to slide further to 6 per cent and 5.8 per cent in the next two years. The Coronavirus strike will impact consumer spending in China, which may further impact the economy and the trade pacts with the US.

The Federal Reserve Bank chief Jeremy Powell considers China’s economy as very important in the global economy now, and when China’s economy slows down it is felt by the USA though less than countries near to China or those actively trading with China like some Western European countries. Coronavirus aside one may question the efficacy of state capitalism as a strategy for economic growth. The recent Bangladesh government decision fixing deposit and lending rates by banks and post offices has been described as “financial repression’” ( Financial Express 12-02-2020) that may cause significant drag on growth, according to a study, ranging between 0.4 to 0.7 % of the GDP. This repressive approach was justified by some governments on John Maynard Keynes’ argument to distinguish between investment for productive purposes and those for speculation.

Such an approach has been criticized by another school of economists who opposes artificial imposition of ceilings to encourage investment and calls for market forces to determine the preferred rate of interest and encourage competition among banks and financial institutions. Particularly galling has been interest cut in postal savings as it directly affects the middle and lower middle class in Bangladesh who account for 70% of the account holders. Joseph Stieglitz (The Great Divide 2012) has argued that inequality results from conscious political decisions which results in a world of super-rich, a vanishing middle class and growing poverty. Stieglitz also questions the efficacy of a government that embraces political capitalism—a system where the rich and the powerful influences government choices that in Hobbesian terminology ends up as being “nasty brutish” and ultimately selfish and protects the interests of their own class.

Political capitalism can also be defined as an economic and political system in which the economic and political elite cooperate for their mutual benefit. Perhaps one may wish to visit the Great Gatsby Curve introduced by Alan Krueger, Chairman of the Council of Economic Advisers in 2012 illustrating the connection between the wealth of one generation facilitating the following generations to have or even surpass the wealth of the earlier generation and the possibility of the poorer in the earlier generation unable to pass on any wealth to the following generation thus denying them the opportunity to climb up the both social and economic ladder.

Bangladesh has had the highest rise in its ultra- wealthy population, surpassing any other country in the world. The growth rate, calculated by Wealth-X, a global financial intelligence and data company, stands at a solid 17.3 percent. If Bangladesh had 100 Super rich in 2012, for example, the number should stand at 219-220 by 2017. In other words, the number of super-rich more than doubled in our country in just five years. At the same time defaulted loans despite easier payment terms accorded to the defaulters has not eased the problem of loan default. Billions of dollars are suspected to have been siphoned off to safe heavens abroad. According to Global Financial Integrity Report 2017, Bangladesh topped the list of least-developed countries in terms of “illicit financial flows”. In 2014 alone, Bangladeshis laundered USD 9.11 billion to foreign countries. At the end of 2016, the amount of money Bangladeshis deposited with Swiss Banks stood at USD 683 million—near equivalent to the amount deposited by Indians. (Daily Star 20-09-2018). Truly Joseph Stieglitz’s observation on “A banking system is supposed to serve society, not the other way around” appears to have fallen on deaf ears. Yet incontestably Bangladesh economy broke through a period of stagnation and even regression through robust export of garments and remittance of Bangladeshis working abroad and today has become the third fastest growing economy in the world.

The Gross Domestic Product (GDP) in Bangladesh was worth 274.03 billion US dollars in 2018. The GDP value of Bangladesh represents 0.44 percent of the world economy. GDP in Bangladesh averaged 53.02 USD Billion from 1960 until 2018, reaching an all-time high of 274.03 USD Billion in 2018 and a record low of 4.27 USD Billion in 1960. The Gross Domestic Product per capita in Bangladesh was last recorded at 3879.20 US dollars in 2018, when adjusted by purchasing power parity (PPP). The GDP per Capita, in Bangladesh, when adjusted by Purchasing Power Parity is equivalent to 22 percent of the world's average. Bangladesh apparently is doing well. Yet apart from growing inequality in the distribution of income one would be well advised to bear in mind the dystopian pictures drawn by MIT husband and wife team ( The Limits of Growth-1972) of the world facing an “over shoot and collapse” by 2100 unless the world took seriously the environmental and resource issues. According to the book, to feed the continued growth in industrial output there must be ever-increasing use of resources. But resources become more expensive to obtain as they are used up. As more and more capital goes towards resource extraction, industrial output per capita starts to fall – in the book, from about 2015.As pollution mounts and industrial input into agriculture falls, food production per capita falls. Health and education services are cut back, and that combines to bring about a rise in the death rate from about 2020(The Guardian 2nd September 2014).

The emerging economies in particular those in South Asia should take lessons from these discourses. Inequality should not be allowed to fester. Growth that does not serve the interest of the majority of the population means only economic figures. The world- both the developed and the developing- should strive for gender equality. Climate change should be a central issue in international conversations. Political capitalism- a momentary solution of economic woes- cannot be the hall mark of economic growth. Social Darwinism, the popular theory in the late 19th century that life for humans in society was ruled by “survival of the fittest,” that helped advance eugenics into serious scientific study in the early 1900s has to be avoided at all cost because the world cannot afford another Hitler. Religious divide that contributes to populism should be avoided.

One hopes that the future generation would be able to inherit that is more prosperous and where opportunities are not denied on grounds of religion, caste, creed or the economic circle one is born into.

The writer is a former Ambassador and Secretary in the Foriegn Ministry of Bangladesh.

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Is Inequlity Fated to Stay? The Case of Bangladesh.

Paper No 6536              Dated 25-Jan-2020

By Kazi Anwarul Masud

Hunger, Famine, Inequality, Injustice and many other words in English language may have different interpretation but are intrinsically intertwined and almost incestuous in origin. A person infested in famine must be hungry and is not equal in food intake compared to their richer compatriots. At the extreme pole one could cite one of the most famous quotes in history. At some point around 1789, when being told that her French subjects had no bread, Marie-Antoinette (bride of France's King Louis XVI) supposedly sniffed, “—“Let them eat cake.” Or one could revisit My Fair Lady and the conversation between Colonel Pickering and Alfred Do little where Do Little admonishes Colonel Pickering for boasting for having morals which Pickering could not have afforded had he been as poor as Do Little.

This brings us to the question: whether immorality is deeply connected with famine and hunger. In least developed countries hunger is a common affair and is generally accepted as a way of life. In the race for growth and development these countries get more embroiled with statistical improvement of growth for praise from the World Bank, IMF, Asian Development Bank and other international institution than really improving the life of greater number of people. Trending of lack of interest of women to marry less educated males    post-industrial society where the glass ceiling for the women to rise to be equal or higher than their male colleagues have been broken due to the demand for educated and technologically attired candidates regardless of gender.    “Just as manufacturing had previously displaced agriculture as the major source of employment, sociologist Daniel Bell argued, so the service sector was now displacing manufacturing. In a postindustrial, knowledge-based economy, the production of manufactured goods depended more on technological inputs than on the skills of the workers who actually built and assembled the products….

The revolution in information technology that has swept through the economy in recent decades, meanwhile, has only exacerbated these trends (What the Right and the Left Get Wrong By Jerry Z. Muller March/April 2013Foreign Affairs). Related to this post-industrial society’s emphasis on education Nobel Laureate Paul Krugman’s (THE UNEDUCATED AMERICAN)  blaming of the US’ progressive loss of global position partly on “fiscal responsibility” which greatly affected amount of money spent on education. Consequently, Krugman states that in the USA a college graduation rate is slightly below the average across all advanced economies.

In the context of less developed countries e Bangladesh, for example, prides itself for bringing the country’s poverty rate (people living below $1.90 a day) down to 21.8 percent while people living in extreme poverty, came down at 11.3 percent in 2018, according to the latest data of the Bangladesh Bureau of Statistics.    It has also been claimed that Bangladesh    would be able to attain SDG by eliminating poverty by 2030.  Though famine conditions have not been seen in Bangladesh for decades but the people living in extreme poverty cannot have the required amount of food necessary for living well. In other words, while people do not starve in Bangladesh a determinate number of people are undernourished with consequent denial of access to health and education. While an essential driver for development is hope, and Bangladesh’s promotion from LDC to low middle income country is laudable, an eminent economist points out that “not much is added to our achievement by calling ourselves a “non-LDC developing country”, if at all we have to find a new designation.” (May 15, 2018 Least Developed and Developing Countries-A matter of definition? Wahid Uddin Mahmud). 

Citing th lone case of South Korea who graduated to an industrialized countryafter the Second World WarDr Mahmud continues to explore the path on which Bangladesh should continue “What could then be our next target in terms of country classification? It could be graduating to the high-middle-income status according to the World Bank's classification, which will mean increasing the per capita income nearly fourfold in real terms; or, it could be becoming a developed or industrialized country in the sense it is understood in the common development terminology”. It is given that with enlarging population not necessarily able to gain from demographic dividend, lower productivity due to lack of required skill, dependence on remittance from expatriate manpower  and export of readymade garment, calamitous effects from climate change, losing arable land to feed the growing population, growing youth unemployment, possibility of political unrest that at present appears nowhere near the horizon and the country virtually ruled by a coalition of likeminded people Bangladesh may continue with the Political Capitalism  model--  an economic

system in which business controls government more than government controls business and the economic and political elite cooperate for their mutual benefit. If left unaddressed, in the words of Professor Jerry Muller (March/April 2013 Foreign Affairs), rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large. 

 Conceding the thesis the political capitalism is not the midway between socialism and capitalism one cannot but agree that capitalism breeds inequality of opportunity and an undeclared aristocracy emerging through marriage between the scions of ultra-rich families. Thus transference of movable and immovable assets are ensured from one generation to another and as the value of the assets increase over time they are concentrated in fewer hands. This develops the elitist class who are considered superior, by themselves of others, due to wealth and power

(the two are closely related as the retention of power is dependent on the support of the elites in society). In the US, for example, 1% of the population owns almost 39% of the wealth which is twice that the bottom 90% of the people own. Rising inequality, observes Paul Krugman, has both economic and political costs (Paranoia and Plutocrats January 24, 2014). Concentration of wealth in the hands of the few even with higher productivity may cause stagnant wages and worsening living standard along with unaffordability of good education, higher mortality due to lesser income as a proportion to medical costs. The moneyed class who are allied with power have to  contend with explosive resentment of the have-nots and consequent rise of autocrats and diminishing space of democratic values. One would be better advised that Adolph Hitler’s rise to power in 1930 general elections giving the National Socialist Party largest number of seats in the Reichstag was due to the disaffection of the German people with the worsening economic condition, Treaty of Versailles notwithstanding, and partly occasioned by the Great Depression forcing the US government to recall the loans earlier given to the German government. Albeit Thirties scenario is too dystopian and the rise of fascism to be replicated in the present day global society and one has to accept the fact that capitalism has come to stay packaged in basically two varieties---one Western capitalism imbued with democratic ideals and the other being the Chinese variety where private sector thrives under strict supervision by Chinese Communist Party.  The problem of unregulated capitalism result in the money accrued is spent on luxury not needed by the spender which political philosopher Benjamin Barber calls “infanitilisation” e.g. money spent on satisfying infantile desires. Barber’s criticism rests on his argument that while early capitalism encouraged virtues with the working men’s “robust motion of agency and spirited grittiness” while the decay that spells later day capitalism suffers from a paradox—“the needy are without income and the well-heeled are without needs”. This redoubles Paul Krugman’s doubts about the Conservatives that equality of opportunity will gradually bring about equality of income. Such views propagated by the conservatives ignore the culture of poverty resulting in the cycle of poverty also known as “development trap” denoting low income, poor education, poor housing and poor health. Since these disadvantages work in a circular fashion it becomes difficult to break out of this cycle. Conceding the premise that capitalism has come to stay or in any case is better than other alternatives the inequality in all its forms are evident in both developed and developing countries. An OXFAM study recently released tells us that India's richest 1 per cent hold more than four-times the wealth held by 953 million people who make up for the bottom 70 percent of the country's population, while the total wealth of all Indian billionaires is more than the full-year budget.

Releasing the study 'Time to Care' ahead of the 50th Annual Meeting of the World Economic Forum (WEF), rights group Oxfam also said the world's 2,153 billionaires have more wealth than the 4.6 billion people. The report flagged that global inequality is shockingly entrenched and vast and the number of billionaires has doubled in the last decade, despite their combined wealth (The Economic Times January 20, 2020).

 The situation is similar in Bangladesh. The gini coefficient, which is the economic measure of equality was 0.458 in 2010 rose to 0.482 in 2016. The rich has become richer while the poorer became poorer. Capital Dhaka being the center of administration and industrialization the income inequality increased between the urban and rural areas as did the migration to the city from rural areas. One saving factor has been the foreign remittance sent to village homes by Bangladeshi expatriates working abroad. While the World Bank, IMF, ADB and many others are praising the high growth rate of Bangladesh and have projected the rate of growth will remain high in the coming years unemployment remains a problem mainly due to disconnect between growth and employment opportunities.  The IMF mission that visited Bangladesh recently expressed concern over banking sector irregularity, reported by the media time and time again, can derail the growth momentum. IMF mission was also skeptical about the new regulations brought in to arrest the growing amount of bad loans, many of which, may become unrecoverable. What good is economic growth if its fruits are denied to the great majority of the people? Harvard Professor Joseph Nye jr, Nobel laureate Joseph Stieglitz among many others have questioned the efficacy of refusal to address the worry of the have-nots across the world. Very recently Klaus Schwab, the founder of the Davos based World Economic Forum (Capitalism Must Reform to Survive From Shareholders to Stakeholders January 16, 2020) has taken pains to inform the world that “Davos Manifesto’s opening line declared that “the purpose of professional management is to serve clients, shareholders, workers, and employees, as well as societies, and to harmonize the different interests of the stakeholders.”    This information is meant for those who are critical of Wall Street corporations who prefer shareholders’ interest to those of stakeholders.  In conclusion, both the developed and developing nations alike, must recognize the fact the statistical increase of Gross Domestic Product and euphoria over high growth rate alone will not endear any government to the people for votes in the next elections.

   The writer is a former Ambassador and Secretary f Bangladesh.         ..