The country’s leading economist, chairman of the Centre for Policy Dialogue (CPD) and former caretaker government adviser, Professor Rehman Sobhan, recently spoke to Prothom Alo in an interview taken in the backdrop of the coronavirus pandemic. The eminent economist spoke on a wide variety of issues, including budget allocations for health, education, agriculture and other sectors, tackling coronavirus in the country, pandemic-induced changes in the world order and more. The interview is being published in two parts. The second and concluding part of the interview appears today.
International organisations, the Guardian and other leading newspapers all predict that the world would face a severe food crisis. The UN Secretary General António Guterres has warned that even countries having huge food surplus could face problems due to disruption of the food supply chain. So what measures could be taken by our government to avoid any possible food shortage?
Bangladesh has been uniquely fortunate in having a hard working, creative and dynamic class of farmers who have quadrupled food production from the time of independence. They have not only quadrupled production but are showing their capacity to go on increasing output as well as diversifying farm production. They are not just producing the traditional food grains, they are also producing a much greater variety of agricultural produce and have now moved into dairy farming, expanded the quality of our livestock and fisheries production. All these developments demonstrate huge efficiency in the productive capacity of our farmers, achieved with limited levels of public investment.
Whatever maybe happening in the world, I strongly believe that Bangladesh’s farmers have the capacity to meet our needs, at least for the foreseeable future but we will have to give them full support. We will have to make sure that they will have access to the needed inputs for production such as fertilisers and pesticides. We will also have to make sure that the delivery and distribution system works.
In the COVID period the government will have to sustain the distribution system even if it means using the support of army logistics to see that food produce is delivered to markets. Most importantly, we have to see that the incentive mechanism for farmers is maintained so that producers do not throw away their product because prices are low and delivery cannot take place. The main goal of the government should be to handle these bottlenecks and to see that price support is maintained. Part of the budget and resources should be invested in seeing that price support is given to farmers in all sectors in order to provide incentives to keep on producing, particularly when we may be facing crises at the international level for our supply chains.
In some areas we will be dependent on international sources of supply for agricultural inputs and we will have to see how far we can increase domestic production in this particular area and how far we can see that those parts of the supply chain originating abroad are still smoothly maintained. But for the government, the main action must be to see that all support, financial, logistical and administrative, is given to the farmers so that they can go on not just producing at this high level but can go on enhancing their production.
I think what Stiglitz must be pointing out is that under globalisation, we have all become increasingly dependent on global supply chains but once the global supply chain is broken, then we are thrown back on the nation state for ensuring our survival capacity. When we are thrown back on our nation state, then the whole issue of internal economic democracy along with political democracy becomes a much more important factor to be considered. It is here that the capacity to respond to the needs of our ordinary citizens who are not so effectively tied into the globalisation process, becomes much more important so there has to be systemic changes in which the less privileged segments of society:
(a) need to be given a better share of the returns from growth
(b) need to be given much greater support and protection through the expenditure of public resources.
Much talk has recently been generated about returning to an idea which has been around for some time about providing a compulsory basic income guarantee, where all citizens are guaranteed a certain level of income by the state. Even in developed economies citizens will be guaranteed basic income. This will address the needs of those households who are poorly paid or fall victim due to loss of income through globalisation or even COVID. These are some of the issues which need to be considered.
Stiglitz and myself and many others have argued that whether it is due to COVID or whether it is due to growing inequalities in the global system, a crucial issue now is to democratise economic opportunity so that people from all classes will have the same right to quality healthcare, same right to quality education, the same right to participate on equal and competitive terms in the marketplace and the same right to share in the ownership of wealth. These are all issues which should be part of the agenda of the 21st century with or without COVID.
Harvard Professor Carmen M. Reinhart stated that it is another nail in the coffin for globalisation, and another American economist Adam Posen said “Economic nationalism will increasingly lead governments to shut off their own economies from the rest of the world” and you see in recent past we are witnessing that how the rise of ultra-nationalism is growing across the continents. Now our apprehension is that this could further marginalise our two major economic sectors remittance and exporting readymade garments. How do you see that this process of marginalisation through globalisation may further gain momentum and whether our two main economic frontiers could be at greater risk?
There is always that possibility for such risks but this assumes that the COVID pandemic will go on forever. I don’t think that is possible, I think that in the course of the next year or so we’ll find vaccines to protect the global population from the epidemic and we will be getting back to business. When we go back to a world without COVID, countries in the Arab world who are dependent on importing labour are not going to become less dependent on imported labour. Otherwise the whole society will break down without access to Bangladeshi or Pakistani or Indian or Philippine workers to effectively maintain the functioning of their economy and their services.
The same applies to many other areas of the world where the nature of their demographics means that they are going to be always dependent on inflows of labour to serve areas of economic activity which cannot be substituted from domestic sources. At the end of the day all those largely politically ill-informed people who vote for Mr. Trump and used to work in the traditional smoke stack industries in the US are unlikely to seek work in newly set up garment factories in the USA. RMG will continue to be made by countries such as Bangladesh and we will still remain an important source of supply for these and other products which are essentially labour-intensive in nature. So those structural changes both in production capacity and also in the way in which global labour practices actually function are still going to be there and those elements of inter-dependence will remain.
I think what we may well see, certainly in the Asian region, is that our global inter-dependence will become much more Asia-centric. We will become progressively less dependent on Europe and North America because the fastest growing areas in the world are no longer Europe and North America but, due to their greater competitiveness, the countries of Asia, particularly China, India, Vietnam, South Korea. These countries are going to be our major sources of supply and will also eventually becoming our major market. Bangladesh should, for the future, be planning a much more cooperative and integrated framework of economic relationships with the Asian region.
Other countries in the developing world would also be developing equally stronger ties mostly within the developing world. Africa’s major trading partner and even for many Latin American countries, today is China, not the United States or Europe. These new economic links are going to be the new realities of the 21st century and also in the post-COVID world. If any part of the world has a serious problem, it is the European and North American part of the global system. Scholars from those countries who are so concerned by globalisation are having their own country’s circumstances in mind. I am much less pessimistic about our own circumstances, provided that we handle our domestic policies sensibly and improve our capacity to build up more cooperative links and supply chains with our neighbors within the Asian region.
As I said, this is already happening. And it will continue to happen. China is the fastest growing country of that size in the world, indeed in the history of the world. Already China has built-up its supply chains all over the world. Today they have also become the main source of global capital, their foreign exchange reserves now exceed 3 trillion dollars which is financing the large budget and balance of payment deficit of the USA. China’s capital surpluses will remain the world’s largest because of their competitiveness.
Historically Bangladesh was always dependent on major sources of capital flows coming from the European capitalist countries and from the US. This is no longer the case. Now the main sources of capital are located in China. I think India also can go on sustaining growth and performing much better than they actually are and will also become an important source of capital, technology and supply for Bangladesh. As far as we are concerned, we are much better placed because we have got these two countries as our neighbours. One is the largest economy in the world and the other is the third largest economy in the world. If we intelligently and creatively take advantage of our position, this will transform our future economic and also our political relations with these countries. We should strongly support the construction of an Asian economic community where we can live in a world in which Asia will be the center of our economic universe, where the balance of power will move across the world from North America and the North Atlantic region into Asia and the Pacific.
Our Prime Minister is strongly committed to a balanced foreign policy and I would give her full encouragement to pursue this. It is not just in Bangladesh’s interest, but in the interest of all countries of Asia that India and China establish a much more harmonious relationship because the future of the world order really depends on the way in which this relationship is actually handled. It is very much in the interest of the traditional major powers who have ruled us from the West that India and China remain divided and they will do everything in their means to see that they remain divided. The two giants will need enlightened, statesmen-like leadership to work together.
Pandit Nehru, and Zhou Enlai at one stage in their lives had this vision of India and China coming together to build a new Asia. Pandit Nehru, on the eve of India’s independence, had convened an Asian Relations conference in Delhi to visualise a post-colonial world in which the countries of Asia would come together and collaborate to build a new international order. I think that this should really be the objective and I would like to see statesmanship being demonstrated by the leaders of both India and China. Bangladesh and other Asian countries should do everything possible to encourage them to demonstrate their statesmanship so that they can solve these problems which are today creating a crisis on their borders.
I would two hundred percent agree with my friend Amartya Sen because I have all my life always believed in public dialogue and that an independent media, committed to constructively pointing out problems which are facing a country, is the best friend of any government, particularly in moments of crisis. In moments of crisis within South Asia and also outside it, there is always a tendency within the government to conceal information. Our greatest enemy in the time of crisis is to conceal facts and truth. The media can shine light on the darkest corners of what is happening. No greater service can be done to any government. In my view, our government and others should regularly offer awards to investigative journalists who point out problems of concern for the people which need to be brought to the attention of the government.
Link to first part of this two-part interview with Professor Rehman Sobhan: