Monday, July 30, 2012

The resignation may save the Padma Bridge loan but not Bangladesh’s image.

"AsI see it"
The Independent
July 27, 2012
M. Serajul Islam 

Renowned writer/novelist Humayun Ahmed’s death managed to temporarily take the heat off the Padma Bridge and related developments. Even the resignation of the central figure in the drama, former Minister of Communications Abul Hossain figured insignificantly in the news media because of the death of Humayun Ahmed. 

Nevertheless the resignation is big news. The Finance Minister had given hint of this just a few days before the resignation that the Minister would be asked to go to meet the most important of the five conditions that the World Bank had laid down for reactivating the loan.  In fact, even in the midst of the nationalistic pitch of the Prime Minister supported by her Ministers and senior party leaders, the Finance Minister did not stop talking of the World Bank. 

It is now to be seen how the World Bank reacts. The Bank is a professional international financial institution whose stake holders are the sovereign nations of the world, both from the developed and developing world. It is in the business of providing loans at very low interests for countries such as Bangladesh for their development efforts. The Padma Bridge under normal circumstances should have been a dream project for the World Bank to finance. The bridge is expected to benefit 30 million impoverished people of southwest Bangladesh and would, when finished, also be expected to help Bangladesh’s GDP to rise by 2%. Therefore there is enough incentive after the resignation of the Minister for the World Bank to provide the loan as the Bangladesh Government has finally bowed to its dictates. 

However, activating the loan may not be as easy as expectations are in the country or in the government. Ministers and leaders of the ruling party abused the WB with no holds barred. The attack was led by the Prime Minister who did so to create a nationalistic passion in the country. The WB was portrayed as an evil institution and an imperialistic tool of the developed countries. Her supporters credited her for the courage and vision to stand up to the WB. While abusing the WB, the Ministers and ruling party leaders promised to show the world that Bangladesh could build the Padma Bridge on its own and do what few developing countries dared to do to the WB; ask it to get lost! 

Surely, the abuse of the WB would come up when and if the Bank chooses upon reactivating the loan. The Country Director of the World Bank, speaking in the media earlier, said that the ill feelings left behind by the way the Bangladesh Government handled the PB loan issue would not just make the reactivation of the loan difficult, it would also affect adversely future World Bank funding for Bangladesh. Further, it would be common sense to expect that the WB would be in no hurry after the heaps of unparliamentarily and undiplomatic abuses hurled at it. Nevertheless, since the WB has the Bangladesh Government where it has wanted, the chances are it would provide the loan, the abuses and insults notwithstanding. 

Clearly, the Minister’s resignation leaves little doubt that the nationalistic passion over  the bridge  could not outweigh the reality that the Prime Minister’s  call to build the Padma Bridge from domestic resources , though theoretically possible, was highly unlikely. It also proved that the talk about Malaysia and China waiting on the wings to step on to the shoes of the WB was nothing more than deliberate attempts to placate the Prime Minister. The Finance Minister called the Malaysian proposal that the Communications Minister had drummed up as better than the WB proposal as hazy and unclear! 

The government, by the Minister’s resignation, has accepted the central issue upon which the WB had stopped the loan; that their charge of corruption against him was a correct one. That acknowledgement would affect adversely Bangladesh’s image and pursuit of FDI and development aid. The Japanese Ambassador in Dhaka has alluded to this possibility in the context of his country. Further, by accepting the other conditions imposed by the Bank, the Bangladesh government has accepted conditions that the Bank has not imposed on any other country.  

The Prime Minister’s role as the great leader with the courage to stand against such a powerful institution as the World Bank will surely take a serious battering if the WB reactivates the loan. That would be such a tragedy for the Prime Minister is a worthy political leader who has been placed in this embarrassing situation because her Ministers and senior party leaders failed to advise her against the jingoistic pitch that she built to express anger at the WB for cancelling the loan.  

Instead, these leaders gave a huge spin to her jingoistic pitch. In what was height of naivety, they came up with unbelievable and absurd suggestions. Sajeda Chowdhury encouraged the Chaatra League to collect money and a student in Rajshahi died as a result. In government offices and in other places, employees started raising money for the Bridge from “voluntary” contributions! The government failed to consider that the opposition wanted the WB funds to build the Bridge because of the benefits and had no reason to join the government’s tirade against the Bank or take part in any nationalistic passion. In fact, the Prime Minister’s move to raise nationalistic passion proved merely the fact that she leads just her party and not the nation. 

Nevertheless, the nation now hopes that the resignation of the Minister would encourage the WB to reactivate the loan for the PB is no doubt a national issue that even the opposition admits. For the government it is time to re-visit the entire drama to see the mistakes that it made that have now ended in its humiliation. When the WB asked for the Minister’s removal over the PB, the nation also wanted him out but on his failure over the roads. By removing him then, the government could have pleased the WB without being seen to have given to its demand while at the same time earned great favour of the people who wanted his resignation on a bipartisan basis. It is a mystery why this was not done then.

As the government awaits a response from the WB, it could do another right thing and explain to the people about what actually has happened between it and the WB. There is every reason to believe now that most things said in public by the Ministers and ruling party leaders were motivated. The World Bank Country Director has given the WB’s clearance to the Bangladesh Government to go ahead and make public all its correspondences with it. The government would need to do this now for sake of transparency. Most importantly, the correspondences must be made public for the sake of the Prime Minister’s credibility.   

The PB loan and the drama surrounding it should also be  lesson for the government. When it chose to fight such a powerful institution as the World Bank, it should have considered that it was not dealing with one of the many private banks of the country for that was the way the government behaved, the merits of its arguments against the WB notwithstanding.  It would be a huge underestimate to say the Ministers and political leaders messed up with their actions and reactions. They have helped Bangladesh accept the charge of corruption together with showing the government as incapable of doing business professionally across its national frontiers.  

In the way Bangladesh negotiated with the WB, the scores if the loan is reactivated would be 100 for the World Bank and zero for the Bangladesh government! Nevertheless, for the country, this would be a great news and a perfect score because the Padma Bridge has the potential for bringing significant economic development to Bangladesh, particularly its impoverished southwest.

The writer is a former Ambassador to Japan and Egypt

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