ILLINOIS: Bangladesh’s economy will continue its high growth into 2020 according to the World Bank, the International Monetary Fund and the Asian Development Bank. This comforts the government, serving as a morale booster for the ruling Awami League (AL).
Although these economic forecasts are lower than the Bangladeshi government’s own estimates, the widely agreed growth of above 7 per cent is still impressive. The country is one of the fastest growing economies in the world.
But positive reports were accompanied with warnings that the government and its supporters are barely mentioning.
The country’s banking sector is facing a serious crisis. A key vulnerability that the World Bank stresses is the growing amount of non-performing loans (NPLs).
THE BANKING SECTOR IN TROUBLE
The amount of NPLs in June 2018 reached US$10.8 billion — 10.5 per cent of all outstanding loans in the economy. And it continues to grow.
It appears the banking sector has become a hostage to defaulters. Instead of going after defaulters, the government is pouring money into the banking sector, repeatedly offering bail-outs and allowing banks to reschedule loans at lower interest rates.
The government’s lenient attitude is due to many defaulters being well-connected. Political connections are also often cited by observers as the reason behind the loans’ approvals in the first place. Similar considerations suggest the debt rescheduling for loans are unlikely to ever be repaid.
Despite the poor performance of those established private commercial banks, three more were approved in February.
Banking sector issues are only symptomatic of the overall flawed governance system.
Voters have become dismayed with the electoral system. Extraordinarily low voter turnouts in the Dhaka North City Corporation mayoral election held on Feb 28 and in the on-going sub-district elections demonstrate that citizens’ confidence in elections has been shattered.
Prime Minister Sheikh Hasina has suggested reviving the one-party system, introduced in 1975 by her father Sheikh Mujibur Rahman, as a solution to the elections-without-voters problem.
RESTLESSNESS IN BANGLADESH
There is a mood of resignation and powerlessness among Bangladeshis.
Misdeeds that previously provoked protests and moral outrage are increasingly accepted as the way it is, despite concerns over an abuse of the legal system to quell dissent.
The failure of the opposition, in particular the Bangladesh Nationalist Party (BNP), to reorganise itself and challenge the government has been a source of frustration.
The BNP rejected the election results and publicly stated that its elected members — only six — will not join the parliament. But two opposition parliamentarians of the Jatiya Oikya Front’s minor Gano Forum party have since broken ranks, raising questions over whether others will be tempted to fall in line.
Dhaka’s air is thick with a rumour that a deal between the BNP and the government is in the making. It would involve the BNP chief Khaleda Zia being allowed medical treatment parole in exchange for those six BNP members joining parliament.
But the BNP has trashed that rumour. Zia has been jailed since February 2018 after being convicted in two cases of graft, while 34 other cases are pending.
As her health deteriorates in Dhaka Central Jail, her lawyers’ efforts to secure bail for these cases have allegedly been blocked by the government, although the government claims that it has no hands in the judicial process.
Despite securing an unprecedented victory and having the participation of 344 out of 350 parliamentarians, the ruling party still feels that it needs these six boycotting members in to provide moral legitimacy to parliament and the national election.
Whether wanting to bring the BNP into the parliament is due to external pressure or because of anxiety within the ruling party is an open question. But there is no denying that the election and the degenerating style of democracy have engendered concern among Bangladeshis.
Simmering discontent over governance is finding itself expressed through sporadic grassroots non-partisan social movements as well as labour unrest.
Separate mass protests viewed together paint a larger picture of popular agitation, including garment workers in January, the second road safety movement in March, the ongoing unrest in the jute mill sector, and protests at Dhaka University. More is likely to follow.
These are yet to pose a serious challenge to the government but represent the growing popular discontent against the lack of transparency and accountability occurring in Bangladesh.
Ali Riaz is a Distinguished Professor at the Department of Politics and Government, Illinois State University. This commentary first appeared on East Asia Forum. Read it here.