Saturday, July 14, 2012

Poor negotiations on Padma Bridge  embarrasses Bangladesh
"As I See It" column
The Independent
July 14, 2012
M. Serajul Islam 

I am surprised at the hue and cry from government circles after the World Bank cancelled the Padma Bridge loan.  The government should in fact be happy with it because by its own claims this would allow Malaysia to give us the loan at costs lesser than the World Bank. The Minister of Communications who publicized this claim said that the project would be started by February next year. 

The Finance Minister led the government’s attack on the WB for the cancellation. In parliament, he blamed the outgoing President of the WB Robert Zoellick personally for the cancellation.  He said that the Government would write to the new President of the WB Jim Young Kim detailing all the steps taken by the Government to answer the WB’s concerns to revive the project. 

The response from the Bank was faster than expected. Within literally hours after the Finance Minister had spoken, the new President said that his predecessor had kept him fully aware of the negotiations between the Bangladesh Government and the Bank and that he backed the decision as an “appropriate” one. He expressed support for the 3 crores people of Bangladesh who would be affected by the cancellation but added that the Bank’s policy of zero tolerance on corruption was not a matter for compromise. 

One wonders what made the Finance Minister come up with the statement against the Bank’s outgoing President. The speed with which the new President reacted left no doubt that the Finance Minister’s claim must have irked him and his colleagues. Perhaps the Finance Minister was misled into thinking that institutions and governments abroad work the same way as in Bangladesh where the culture is for a new administration to throw overboard all the decisions of the outgoing one based on its  civilized culture for institutional behaviour.  Even if the Finance Minister had irrefutable intelligence that the former President had acted out of grudge, he should not have made the statement on it in parliament. The reaction of the new President left little doubt that his intelligence source, if he had any, was highly flawed.  By his statement against the outgoing President, he has lowered his own credibility and that of the government with the WB.  

The way the government negotiated with the WB on the Padma Bridge since the initial postponement many months ago has been anything but professional; in fact in made a fiasco in dealing with the WB on the Padma Bridge. The former Minister of Communications treated the WB accusation against him as a joke. He wrote a letter to the ACC to investigate him so that he could, with an ACC certificate, answer WB on charges against him. By doing so, he acted like the proverbial intruder in the temple who, when he heard someone asking to know who was in the temple, responded by saying that he had not eaten the bananas. In fact, if the government had taken the WB’s first contact with the government on its concerns over funding seriously and negotiated professionally, the matter could have been resolved behind the scene. The government eventually changed the Minister but in a manner that failed to give it any advantage in resolving the conflict. 

The new Communications Minister was more interested in pleasing the Prime Minister who was angry and upset with the WB for postponing the funding for a project that is politically of the highest significance to the ruling party. Her anger was enhanced by the fact that individuals named by the WB are close to her. The new Minister gave the country false hopes a number of times on dates when t the PB project would start with Malaysian funds. He promised the country that Malaysian funding would be cheaper! The Minister had to be alerted that Bangladesh would first have to cancel the agreement with WB to sign a new contract with the Malaysians! 

Nevertheless, in the end, it is this government’s style of negotiations that has been responsible for the PB fiasco. It is this style that has landed Bangladesh at serious odds with the United States. It is the same style that has now landed it with serious problem with the WB. In this style, the underlying belief is that the government led by Sheikh Hasina cannot make mistakes. It is time that those advising the Prime Minister tell her without fear that sometimes she could be wrong, that to err is human  and that she would be better off listening to them, sometimes. Unfortunately, this did not happen when the WB postponed the loan that made the Prime Minister angry. 

The Ministers and party leaders became angrier instead of calming the anger of the Prime Minister and advising her to negotiate with the WB to resolve its concerns.   They forgot the stature of the WB and the fact that so far it has contributed over US$ 16 billion for development of Bangladesh with over US$ 4 billion in the pipeline. They accused the WB of corruption and absolved those named by the WB of the charges.  Simultaneously, they said that the country would build the PB from domestic sources after the Prime Minister had hinted at that; that Malaysia would fund it; and even China was named as a possible source. Clearly, they were not sure what would make the Prime Minister happy and went about contradicting one another on where funds would come for the PB. 

The WB cancellation of PB loan put the government in an embarrassing situation.  International media reported widely that the cancellation would affect adversely the flow of much needed foreign investment. The BNP took advantage of the media reports and put its own negative spin on the issue. All these made the Prime Minister angrier and more upset than she was with the postponement that encouraged her Ministers and senior political leaders to go overboard in attacking the WB. One Minister said that the WB action and the recent Human Rights Watch’s critical report on human rights in Bangladesh are all a part of US conspiracy instigated by Dr. Yunus! Another revived memory of 1971 to highlight USA’s dislike for Bangladesh!!  

When the Prime Minister “finally” declared that her government would build the PB from domestic resources and not go to WB for a review, the Ministers and political leaders praised her decision like she had led the country to a big victory. No one cared to answer what would happen to the cheaper Malaysian proposal and future funding from WB. The ministers/leaders side tracked more important issues. First, whether it is practical for this government at its fag end to take such an important mega project on its hands. Second, what would be the impact of such a huge sum of money being diverted from critical areas of development upon the economy and the country? Finally, whether the Prime Minister can sanction/divert such a huge amount by an executive decision when only recently, the parliament adopted the 2012-2013 budget without any mention of the PB. 

At the time of filing this piece, the Finance Minister has again said that the government would go to WB after review with its development partners a day after the Prime Minister announced that the government would not do so!  In between its confused reactions whether to go to WB or not, the Government has failed to establish its case that the Bank has been unfair or that the WB itself is not above corruption. It also failed to address to the alleged payment of US$ 35 million by Canadian engineering firm SNC Lavalin to officials of the Bangladesh Communications Ministry for securing lucrative contracts from the WB that is the basis of WB’s concerns.  The case is being tried currently in a Canadian court with clear evidence to prove the charges. 

Clearly, the government has lost its direction over the PB having badly messed up its negotiations with the WB. A senior leader close to the Prime Minister suggested that the Chaatra League should raise money for the bridge underscoring the extent to which confusion has taken hold of the government over the proposed Padma Bridge. 

The writer is a former Ambassador to Japan

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