Diary Bangladesh (July 14, 2009)

Interestingly conflicting views are expressed by Pakistani visitors to Bangladesh. The businessmen usually come back envying Bangladesh’s economic growth. The common comment is “look at Bangladesh it does not grow cotton and yet its textile value added exports is over $10 billion.” The tourist from Pakistan comes back and cribs about poor infrastructure, traffic jams and conspicuous poverty. My last encounter was with one such couple who came back and said it with ‘West Pakistani’ arrogance “their separation was a good riddance.”

Their criticism brought a trip to Dhaka on my priority list. It was my first visit last week to this part of the world – some thing which my Bangladeshi journalist friend did not believe and asked “how come a man with grey hair like you never visited Bangladesh ever?” I pleaded guilt for the delay.

Now let’s see objectively where Bangladesh stands between these two contrasting views of the Pakistanis and then move on to what we can do for each other. First let’s talk about the Bangladesh economic position. It is true that the Bangladeshi Taka is around 16% stronger than the Pakistani Rupee, the economy is growing at about 4 to 5% and the inflation rate is over 5%. It is also a shame that Pakistan’s textile made ups exports is less than Bangladesh a country that does not grow cotton and imports most of its fabric and yarn. This Bangladesh has achieved through hard work of its cheap labour, lower interests and electricity rates; it also enjoys duty advantage in the European market available to the least developed countries. Unfortunately, Bangladesh is in the category of least developed countries, which is indeed not an enviable position. The Pakistani visitors forget the fact that the per capita income of a Bangladeshi is much less than it is their own country. The businessmen, who lament selfishly that Bangladesh labour is much cheaper than Pakistan, should on the contrary be happy that the workers are paid better here. It is precisely for this reason that the flow of Bangladeshi workers is towards Pakistan in spite of the risky illegal path they have to take and not otherwise. Substantial amount of is remitted by Bangladeshi workers from Pakistan to their country through ‘Havla system.’ Most of these workers are employed as domestic servants and in poultry industry.

Internally, uneven development and concentration of business in and around Dhaka pulls the rural unemployed to this city in large numbers. That is the reason that a tourist is struck by the poverty and chaotic traffic jams. All cities which face massive inflow of immigrants in the developing countries have crumbling infrastructure. Such Pakistani tourists usually take no pain in going into the depth of historical, economic and social reason of poverty of Bangladesh. They tend to forget that the country was liberated only 37 years ago. There is sufficient economic data available which shows that till December 1971 West Pakistan benefited from the net outflow of capital from the then East Pakistan. (For quick reference read: Bangladesh Papers published by Vanguard in the 70s; Making of a Nation Bangladesh – An Economist’s Tale by Nurul Islam; and from East Bengal to Bangladesh by Dr. Shaikh Maqsood Ali).

After independence Bangladesh could have done much better and caught up with the lost two-and-a-half decades, if only its politicians had not bungled up. However, most of the businessmen and journalist I met here in Dhaka feel good about the new government. Cogito Group Chairman Mehboob Chowdhury told me that Prime Minister Hasina Wajid has come back as a mature politician and has distanced herself from the old team which had the stigma of corruption. “So far she is doing well and moving cautiously,” he observed. Similar optimism was expressed by some of the senior journalists.

Chowdhury is upbeat about the economy and says that the “banking system of Bangladesh has not been bruised from the global financial crisis.” But a cursory look at the banking system show that the country has too many banks and eventually many small banks will have to go through the mergers and acquisition process like Pakistan. A bit late however, when the world has become wiser about the unbridled consumer financing, Bangladesh is entering it with fervour. Here perhaps they could learn from Pakistani banks’ experience, they burnt their fingers in consumer financing because of imprudent lending and without credit data about the borrowers.

This kind of exchange of experiences, increase in trade and investment between Bangladesh and Pakistan is now possible and mutually beneficial for both the countries. Bangladesh Chamber of Commerce and Industry President Annisul Haq told me “present level of economic cooperation is low between the two countries because of lack of communications.” “The information about the trading and investment opportunities is not enough on both sides,” he explained. He suggested that proper survey about such opportunities should be conducted. It is perhaps this reason that Haq’s wife Rubana Haq has launched a South Asia Channel to increase understanding and cooperation in the countries of the region. Aaj is already telecasting some programmes of this channel.

On the issue of low imports of fabric and yarn from Pakistan for the Bangladesh booming garment export-oriented industry, Haq said that it’s cheaper to import from China and easier too because of frequent shipping services.

He said only a couple of people from Pakistan have invested in the garment and home textile units in Bangladesh. The question is why Pakistani industrialists have not moved to take advantage of setting up garment export units in Bangladesh? Another question is why the lackluster SAFTA has not increased the trade and investment between the two countries in spite of many goodwill statements? Why the trade between the two countries is a paltry $350 million. The balance is in favour of Pakistan which exports goods worth $270 million and imports $80 million. Haq says it can be more balanced if only Pakistan would allow duty-free imports of items like pan, betel nuts and jute. Market sources say that if size of informal trade is taken into account, then the total trade between the two countries would be around half billion dollars. The business always knows what is needed where and which the cheapest source is. It is of common knowledge that huge amount of medicines are smuggled from Pakistan to Bangladesh through personal baggage. Here comes yet another question why we do not have a free trade agreement with Bangladesh while we have one with Sri Lanka?

Faiz Ahmed Faiz had asked a question after his visit to Dhaka, roughly translated it was “After how many rains these blood stains would be washed away?” This visit to Dhaka many years after Faiz Sahib has convinced me that heavy rains of over three decades of Bangladeshi monsoons have washed the bitterness and “stains of blood.” (ayazbabar@gmail.com)

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  1. #1 by Rawshan on September 16, 2009 - 10:10 pm

    Bangladesh is over populated so it spils some of its population for obvious reason. But I think net remittance sent by Pakistani professionals working in Bangladesh is way more than some BD domestic help who found their way to Pakistan some how. It is also biased assesment that BD is doing well because of duty free access to european market. BD still does far better in USA market than Pakistan where Pakistan gets preferential treatment and BD gets nothing.
    Regarding wages, yes you are right on this. BD garments mainly employ low skilled female workers who were the marginalized segment of the society and helped to change the socio economic condition of those poor people. We have the lowest unemployment rate in Bangladesh (2.5%) and you wont find too many BD professionals looking for jobs in Middle east.

  2. #2 by Rawshan on September 16, 2009 - 10:17 pm

    One more thing, we do better in textile because we are good at them. This is in our blood as we been doing them for thousands of years(eg. Moslins, silk was well known in europe since before middle ages for what columbus set sail for India). Same thing goes to Ship building, fishing and farming. We are good at them.

  3. #3 by baluchindependence on December 1, 2009 - 4:29 pm

    pakistan has been in the process of disintegrating. it is the west that has been keeping it in “intensive unit” as it has been effectively utilising it as a prostitutes. its just time a matter of time that the divided population of so called pakistan will break-up. but the west will make it linger in order for it to be more painful.

  4. #4 by Babar Ayaz on December 4, 2009 - 4:23 pm

    That’s interesting! I didn’t know that so many Pakistani Professionals working in Bangladesh. Can you give me some statistics. On other issue please be rest assure that I could be the last person who could be biased against Bangladeshi people, in fact I like them and have many journalist friends in your country. As a matter of fact I am strong advocate of expansion of relations in South Asian countries.

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