FBCCI wants Sheikh Hasina as Prime Minister again
by Reza Monem 6 August 2023
Bangladesh is scheduled to hold its next parliamentary election by January 2024. While the opposition parties led by Bangladesh Nationalist Party (BNP) continue to demand the resignation of the government ahead of the election, the international community, especially the U.S. and the European Union reiterated their interest in a free, fair, and inclusive election. As the ruling party, Bangladesh Awami League (BAL) has been flexing its muscles as well to display its popularity by organising frequent public meetings in the capital Dhaka, and other cities. Leaders of the ruling party don’t hesitate to appear at any event where the audience is friendly.
On 15 July 2023, the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), the nation’s apex body of trade organisations, held a business conference. Prime Minister Sheikh Hasina attended and addressed the conference. Amid political slogans, the FBCCI leaders collectively proclaimed their public support for the ruling party at the upcoming election.
The public display of such a political stand of the business leaders in favour of the incumbent government is unprecedented, even by Bangladesh standards. History has been made. The last time FBCCI took a political stand was more than 27 years ago. It was against the incumbent BNP-led government. On 11 March 1996, the FBCCI called for the dismissal of the February 1996 election results and a fresh election under a neutral, caretaker government.
In Asia, business leaders rubbing shoulders with politicians is not new. The current Bangladesh situation is an extreme case, albeit predictable. During the BAL’s 14-year term in the government, the country enjoyed rather stable economic growth, thanks to a giant readymade garments sector and the steady, healthy flow of remittance from overseas workers. Businesspeople, almost of all genres and sizes enjoyed a ‘blue sky weather’ during this long period. Hardly had there been any occasion where the government and business interests collided. As the economy expanded over time, so did the bank loan default rates, the emergence of new business elites, and the growing trend of capital flights.
Based on data over the period 2011-2021, Bangladesh ranks as the 21st highest loan default nation in the world. With a default rate of 7.97%, Bangladesh is ahead of its South Asian neighbours such as India, Pakistan, Nepal, and the Maldives. As of June 2022, a total of 69,369 court cases have piled up for judgment. A total amount of Taka 1.53 trillion is at stake.
Newspaper reports of borrowers leaving the country with unpaid bank loans are not uncommon. There were open admissions and debates in the parliament about the growing trend of money laundering out of the country. Global Financial Intelligence, a U.S.-based think tank estimated, U.S. $8.27 billion every year on average was siphoned out of Bangladesh through trade mis-invoicing between 2009 and 2018. By 2021, deposits in Swiss banks held by Bangladeshis grew to 871.1 million francs.
In recent years, there were several cases of rapid price hikes of daily essentials like onion, green chilli, soybean oil, and sugar. The common masses and low-income groups vented their anger at the government through the press and social media. Allegations were made of trade syndicates or cartels controlling the market. Even ministers lamented the government’s helplessness publicly. Yet no substantive measures were taken apart from enacting a new bill that makes hoarding daily essential foods a punishable offence. Critiques allege that business houses close to the ruling party leaders have amassed unbelievable amounts of wealth over a very short period. A new class of conglomerates has emerged through kinship, exchange of favours, or long association with senior members of the ruling party.
Since the 1990s, the Dhaka stock market crashed twice. On both occasions, the BAL was in power. The first was in 1996 and then in 2010-2011. On 9 January 2011, the Dhaka stock market registered the largest drop in share price in its 55-year history. Police had to use tear gas to disperse thousands of angry investors who vented their anger towards the government. After a three-month investigation, a probe committee identified several influential pro-government tycoons as the mastermind of the crash.
What we observe today in Bangladesh is the legacy of an open market economy introduced in the country in the post-1975 economic reforms. As the private sector flourished, so did its interest in politics. In a hierarchical society and under fledgling democracy interrupted by military rules, successive governments took rather a soft attitude towards the business class. Bangladesh’s quest for quick economic miracles, amid a weak institutional environment that lacks the rule of law and political accountability, espoused the rise of the business class through the political power structure over time. Thus, the inevitable happened.
Over time, the business class has well and truly captured the Bangladesh parliament. In 1973, members of the first Parliament came from legal, business, and farming backgrounds. In the fifth Parliament (1991-1995), lawyers (38%) outnumbered businessmen (15%). By 2008, 57% of the members were businessmen. At the next poll in 2014, this number grew to 59%. In the 10th parliament (2014-2018), 65% of the 350 members were Kotipoti [1]. By comparison, only 0.06% of the total population of Bangladesh were Kotipoti in 2016. The current parliament, dubbed as a ‘Parliament of millionaires’ by a national newspaper, has 182 out of 300 members who have a business background, and almost 82% of the members are Kotipoti. By contrast, in 2019, 20.5% of the people lived below the national poverty line.
Political connections with the incumbent government turbocharge business success in Bangladesh. At the same time, success in business raises one’s prospects for political office. In Bangladesh, wealthy candidates are catapulted from outside to ‘safe’ seats based on their large contributions to the party funds. Quite often, newly-joined ‘election-winning’ party members are given preference over longstanding, hardcore activists when it comes to election nominations.
When in power, the business owners-turned-politicians have a smooth ride in advancing their business interests with the support of government machinery and the backing of financial institutions. At the same time, family members and close associates of powerful politicians easily enter into lucrative businesses with the blessings of the government. Thus, ‘the winner takes it all’ in Bangladesh politics.
So, is it a good sign that business is getting so close to politics in Bangladesh? Not really, if you think of democracy.
When politics is mixed with business, a dangerous ‘cocktail’ is formed. If money corrupts politics, corrupt money poisons politics. As discussed earlier, in weak democracies, money can ‘buy’ party leadership positions and election nominations. Moreover, it is possible for wealthy and politically-powerful candidates to sway public opinion in their favour by splashing money, making false promises, intimidating voters, and blocking the opposition voice. Hence, it is possible for the few wealthy to overpower the silent majority in the election outcomes. And the vicious cycle will continue. Thus, borrowing from Abraham Lincoln, one can say a nation is deprived of a government “by the people, for the people, and from the people.”
[1] Kotipoti is a Bangla word meaning the owner of ten million Taka (Bangladesh currency). In the socio-economic context of Bangladesh, a Kotipoti is considered to be a rich person.
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Reza Monem is a professor at Griffith Business School, Griffith University, Australia.
