Bangladesh and Shock Doctrine

Bangladesh and Shock Doctrine

By Kazi Anwarul Masud

One may wonder how relevant to Bangladesh economy could be Canadian author Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism? After all the book has both been hailed and trashed by prominent writers/columnists for proposing the thesis that free market fundamentalism and Breton Woods Institutions’ imposition of their prescriptions in the wake of the 1997 Asian Crisis forcing the afflicted governments to sell off many state owned enterprises to Western companies had nothing to do with Bangladesh. These were done when these countries were reeling from the effects disasters or upheavals. She took examples from the last thirty years of South America of the 1970s to New Orleans after hurricane Katrina. Klein asserted that torture has been an essential tool for authorities to implement aggressively free market reforms. She forcefully argued that neoconservatives’ project was not to spread democracy in democracy deficit countries but to implement maximization of profit mechanism for small elites or in other words maintain consistency in rich-poor divide by 20% rich and 80% poor.

This segment of global population may be termed as “disposable” poor doomed to subsist in “planned misery”. This reminds one of Scottish philosopher Robert Owens’s belief that great majority of the people have to remain poor for the small minority to live in splendor that they have been used to. Going back to Naomi Klein she alleged that at the most chaotic juncture in Iraq’s civil war a new law was enacted allowing Shell and British Petroleum to claim Iraq’s vast oil reserve. Klein was particularly hard on Nobel laureate Milton Friedman and Chicago School of economists who produced neo-cons and neo-liberal thinkers who still wield considerable clout in Washington.

Though Bangladesh at present is now being governed by a freely elected government our past has seen martial law, military backed government and corrupt Islamist allied government and the country has been ravaged by natural disasters. Bangladesh has also been identified as one of the worst victims of climate change. If we look at the apocalyptic political change of 1975, constitutional change (now declared unconstitutional by the Supreme Court) that changed the basic character of the 1972 Constitution, and the change in our economic system from socialism to unbridled capitalism at the instance of the donors as the military governments without popular support had to be dependant on donors and Islamist forces; then Naomi Klein’s Shock Doctrine should not look totally unfamiliar to us. Klein described the conditions that would invite Shock Treatment as public disorientation followed by mass collective shock caused by war, terrorist attacks, natural disasters, have been experienced by the people of Bangladesh.

Nobel laureate Joseph Stiglitz reviewing Klein’s book alleged her treatment of the subject of “oversimplification”. Stiglitz equally blamed Milton Friedman and other shock therapists of oversimplification basing, he says, their belief in the perfection of market economies on models that assumed perfect information, perfect competition and perfect risk market. In another piece Stiglitz postulates that market economy does not automatically guarantee growth, social justice or even economic efficiency. He advocates “moral growth” that is sustainable, increases living standard not just today but for future generations as well and leads to a more tolerant and open society. Since the behavior of people –both buyer and seller is not rational and information is not perfect, not appreciated by market fundamentalists, there remains an important role of the governmental intervention as implied by Nobel laureates Daniel Kahneman and Vernon Smith.

Some have tried to depict such intervention as Adam Smith’s invisible hand that according to Smith was a conjunction of the forces of self-interest, competition, and supply and demand. Milton Friedman saw the invisible hand as “the possibility of cooperation without coercion”. Stiglitz recently doubted the existence of an invisible hand. He added that he “did not think anybody today would say that the pursuit of greed by the bankers led to the well being of America or certainly the world”.

The recent global meltdown has put countries like Bangladesh in a difficult situation. As it is Bangladesh will have to prioritize between political development and economic development in order to consolidate and sustain democracy. While conventional wisdom states that democracy being more accountable to the masses should have more possibility to reduce poverty, both Milton Friedman and Joseph Stiglitz are skeptical that democracy can be sustained in poor countries unless these countries achieve rapid growth. This accords with the views expressed by Stanford University Professor Larry Diamond that the Third World is witnessing a democracy recession due to serious problems of governance with pockets of dissatisfaction, and unless income inequality is reduced, freedom is guaranteed, and economic growth is generated many of the struggling democracies would eventually lean towards authoritarianism.

Political theorist Benjamin Barber termed the Western style of capitalism as “infantilisation”: money is made to satisfy infantile desires that in an orderly society would be seen as childish exuberance for extravagance. Barber’s criticism rests on his argument that while early capitalism encouraged virtues with the working men’s “robust motion of agency and spirited grittiness” while the decay that spells later day capitalism suffers from a paradox“the needy are without income and the well heeled are without needs”. According to analysts the people trapped in the culture of poverty have a strong feeling of marginality, helplessness, dependency, and the feeling of alienation within one’s own society.

Closely associated with the concept of culture of poverty is cycle of poverty also known as “development trap” denoting low income, poor education, poor housing and poor health. Since these disadvantages work in a circular fashion it becomes difficult to break out of this cycle. Francis Fukuyama thinks that basically four conditions have to exist to facilitate democratic transition: - (a) the level of development, (b) culture, (c) neighborhood effect, and (d) ideas. Virtually all industrialized economies are functioning democracies while relatively very few poor countries are democracies. There are of course exceptions. Albeit Francis Fukuyama is not totally convinced that Islamic culture which does not separate the temporal from spiritual authorities and therefore make themselves unable to sustain a true liberal democracy and may use “one man, one vote, one time as a route to establishing theocracy of the sort that exist in Iran today”, is necessarily reflective of the situation prevailing in the entire Islamic world.

It is true that barring exceptions virtually all industrialized countries are functioning democracies. Indeed once a country attains per capita GDP of US dollars six thousand it transforms itself from an agricultural society to an industrialized one and the country attains sustainable democracy. Empirically it has been found that not a single country which became democracy ever reverted back to authoritarianism. Perhaps because of the growth of the middle class owning private property makes them a of Ideology strong stake holder in the sustenance of democracy. Harvard University Professor Daniel Bell in his End of Ideology wrote: “The ideologist--Communist, existentialist, religionist-- wants to live at some extreme, and criticizes the ordinary man for failing to live at the level of grandeur. One can try to do so if there is the genuine possibility that the next moment could be actually, a "transforming moment" when salvation or revolution or genuine passion could be achieved.

Max Weber in a poignant essay entitled "Politics as a Vocation," posed the problem as one of accepting the "ethics of responsibility" or the "ethics of ultimate ends." For the latter--the "true believer” all sacrifices, all means, are acceptable for the achievement of one's belief. But for those who take on responsibility, who forgo the sin of pride, of assuming they know how life should be ordered or how the blueprint of the new society should read, one's role can be only to reject all absolutes and accept pragmatic compromise.”

In short, the state must ensure that the system and services needed for a market economy to function efficiently exist. Importantly the legal system embodying the commercial and corporate law must exist.

The state must also ensure an environment of competition which both Adam Smith and Karl Marx agreed that capitalists naturally do not want competition and try to avoid it. The basic infrastructure and social services must also be provided by the state. In the final analysis there is no unique constellation of conditions that would require the state to play its role which would vary according to the stage of development an economy is already in. This strand of argument was further confirmed by Harvard University Professor David Scott as follows: - “Economic development requires the transformation of institutions as well as the freeing of prices, which in turn requires political and social modernization as well as economic reform.

The state plays a key role in this process; without it, developmental strategies have little hope of succeeding. The creation of effective states in the developing World will not be driven by familiar market forces, even if pressures from capital markets can force fiscal and monetary discipline. And in a world still governed by "states rights," real progress in achieving accountable governments will require reforms beyond the mandate of multilateral institutions”. But since perfection of democratic practice, for example, is subjective and if one has to graduate from the present ‘”imperfection” to what the developed countries would consider acceptable to be a member of the league of democracies then many of the developing countries would have to wait for years to get their approval. Here again hypocrisy runs wild if one were to consider West’s haste to embrace the former East European countries as members of the European Union and of NATO that, as John Foster Dulles had thought, was formed to safeguard the Western faith and way of life.

The democracy that we all aspire for will not be beneficial unless it can respond to the needs of the people that the government claims to represent. The future configuration of the world does not guarantee that democratic countries will prevail. If China as predicted by the World Bank were to become the largest global economy with its authoritarian system intact then many countries will be asking themselves if pluralism is the best answer, and whether in the short term public goods cannot be better delivered through an authoritarian system than one in which so many centers of power have to be consulted for their consent before a decision can be taken. A counter argument can be that like South Korea as the Chinese people gain better standard of living they may want greater freedom in the decision making process. This brings us to the theses of Harvard Professor Niall Ferguson and historian Paul Kennedy on Rise and fall of Great Powers. Ferguson finds in Kennedy’s model that great powers rise and fall according to the growth rates of their industrial bases and the costs of their imperial commitments relative to GDP. But Jared Diamond, an anthropologist, concluded that the Maya civilization fell into the Malthusian trap as the population grew followed by deforestation, erosion, drought and soil exhaustion that again led to dwindling resources and internecine fights and eventual extinction. Diamond warns that today’s world could go the Mayan way. But then again Niall Ferguson poses a question: what if rise and fall of civilizations are not cyclical and it could be triggered by a crisis and result in a fall within a short time? In such a situation the entire game plan can change.

There is a saving grace. Politicians of all hue, both from developed and developing world, follow short term policies that will endear them to the electorate paving the way to power. Since great powers by definition are few in number medium and small countries bother little for their place under the sun. Yet in shaping policies the medium and small countries have to be aware that Westphalian concept of sovereignty as inscribed in the UN Charter has been amended as in the European Union where members practice shared sovereignty. Additionally the concepts of duty to prevent and duty to protect, endorsed by the 1985 UN Summit, have put responsibility of good behavior to remain as a member of the international community not only on the great powers but on all members of the international community. Globalization has also assisted in the circumscription of sovereignty due to the realization that fate of the global community is interconnected and the welfare of the developing world is closely dependent on the welfare of the developed countries. But as human beings are more Hobbesian than Kantian in their dealings with others the center-periphery relationship of the by-gone days under a different rubric still exists.

This was clearly evident in Copenhagen Climate Conference where the reluctance of the guilty developed nations’ interests and the newly emerging economies as opposed to those of the innocent victims of the climate change clashed and produced a compromise document that fell far short of the expectations of the great majority of countries for justice and equity. No binding limits on gas emission were agreed upon nor billions of dollars of assistance to the badly affected countries was guaranteed. But then the assurance given by the developed world that would give 0.7% of the GDP as foreign aid remains to be fulfilled after decades have passed since the promise was made. Equally the farm subsidy given to American farmers in the production of maize to reduce external dependence for oil that has restricted entry of agricultural goods from poor countries to the US who are already saddled with adverse terms of trade as producer of primary commodities do not induce confidence in the judgment of the rich to be fair and equitable.

Apart from the brutalities inflicted by then Pakistani occupation forces on unarmed Bengali nation leading to bloody war of liberation in 1971 Bangladesh has been a victim of Islamic extremism nurtured during the rule of “two army generals, namely Ziaur Rahman and H.M. Ershad who were responsible for shattering the country's secular fabric. Sudden and violent departure of General Ziaur Rahman from the political scene resulting from a bloody coup left the country's Islamization process in jeopardy for a while. Enter General Ershad and his regime took the mantle from the predecessor in no time.

During the period of 1982 to 1991 the country experienced proliferation of religion-based schools, popularly known as Madrassahs. There was no control; mushroom growth of Madrassahs in all the nooks and corners of Bangladesh gave rise to thousands of Islamic zealots of Bangladeshi variety. They were the epitomes of Bangladeshi Talibans.Like General Ziaur Rahman, General Hussain Mohammad Ershad became a darling of the Oil Sheikhs. During Ershad era, droves of Bangladeshi holy warriors left their ancestral land to join fighting in Lebanon and Afghanistan.

Yossef Bodansky, Director of Congressional Task Force on Terrorism & Unconventional Warfare mentioned Bangladeshi Islamist zealots in one of his essays. Alarming scenario was presented by Vikram Chobe in his "Osama Bin Laden: Upholding the Tradition of Jihad" essay. He wrote that the Indian Intelligence recently discovered that Bin Laden is generously donating funds to the Pakistan-based extremist outfit Harkat-ul-Mujahideen, which has contacts with the Dhaka-based Bangladesh Harkat-ul-Jihad-e-Islami. Harkat-ul-Jihad-e-Islami has been assigned the task of recruiting Bangladeshi and Indian Muslims to fight in Kashmir under the command of Harkat-ul-Mujahideen. The bureau has also discovered that the Dhaka-based terrorist organization has already recruited 1,000 Muslims who will be trained in the terrorist training camps at Kormi and Kasia in Bangladesh.

The American Taliban John Walker Lindh said in an interview that Afghanistan's Mullah Omar's body guards composed of Bangladeshis also. In a CNN interview, Walker Lindh said that two important languages spoken in al-Qaeda power center were Urdu and Bengali. According to Arabic newspapers, U.S. forces in Afghanistan are holding nationals from several Central Asian Republics, as well as Jordan, Syria, Bahrain, Bangladesh, Tunisia, Morocco, Indonesia and some Kurds from Iraq, although officials of some of those governments say they know nothing about such detention." (Resurrection of Taliban in Bangladesh-Jamal Hasan 15-2-2005). The Islamists nurtured by the rightist-Islamist coalition government in 2001-2006 displayed its violent fangs during the present center-left government. Despite the leaders of the Islamists having been hanged of late terrorist activities by the Islamists with alleged links with terrorists based in India and Pakistan (with links with Pakistan intelligence wings as confessed by one of the Pakistani terrorists) has seen a comeback.

With information available in the public domain it is difficult to ascertain the depth and breadth of the Islamic extremism in Bangladesh. But the brutal murder of a student in a Bangladesh university where the main accused alleged that he received direction for the murder from one of the top leaders of Jamaat-e-Islami (denied by the leader so alleged) deepens mistrust among the people about the commitment to pluralism by the Islamists in politics. Another incident that occurred at the beginning of the rule of the present center-left government was the bloody, violent and despicable revolt by the Border Security Forces in Dhaka. As the trial for the offences committed is now going on it would be imprudent to comment on the mutiny. But there is a school of thought that the BDR revolt was staged to destabilize the government, halt the execution of the murderers of the Father of the Nation (the guilty persons have sow been executed), delay the trial of the Bengali collaborators of the Pakistani occupying army in 1971 and the process of secularization of politics that is quite distinct from agnostic or atheist politics in Bangladesh. If 9/11 terrorism was a shock to the US then BDR revolt last year was a shock to the people of Bangladesh.

Fortunately the Bangladesh government of Sheikh Hasina has not been swayed by successive natural and man made disasters and so far is acting according to the promises made in the Election Manifesto with specific attention given to the agricultural sector. Equally industrialization, widening the export base, increasing manpower export, promising to provide free education up to graduate level, upgrading health sector etc are being attention to. As the Western world is yet to come out of the woods of global recession with consequential adverse effects on others including Bangladesh it would be advisable to remind ourselves of the lessons advocated by Naomi Klein, Paul Kennedy, Jared Diamond among others so that the country can be kept on an even keel for its politico-economic development.

The writer is a former diplomat and Secretary of Bangladesh