The conventional wisdom says, "What is good for the goose is good for the gander" but NOT necessarily and especially when a goose or a gander is from a different country and by mistake or whatsoever the reason could be, it lands in a lake in Uganda or on a Sylhet marshland in Bangladesh. Weather and environment of different places make plants, trees and animals, if not always but often, different from each other. This dissimilarity we find very much so in humans compared to any other living creatures. A human has a distinctive speech and as a social creature it has a society of its own that differs culturally, linguistically, ethnically and socially very widely and significantly. But as this article is about good and bad investment, I shall try to keep the discussion confined to investment only and my motherland Bangladesh as a case study keeping in mind our own culture, social, political and most importantly economic circumstances.
Investment means the use of money in the hope of making more money, or, in financial context it is purchase of a product or other item of value with an expectation of favourable future returns. Investment also means using capital and labour for production of new capital goods, plants and equipment that John Keynes called real investment.
There are different types of investments and only a few we need to mention here for clear understanding of the subject and they are:
(a). Autonomous Investment - investment that does not change with the changes in income level or Government Investment
(b). Induced Investment - Investment that changes with the change in the income level or investment by the entrepreneurs
(c). Financial Investment - Investment made in shares, bonds, securities, etc. even though mostly it is transfer of financial assets
(d). Real Investment - Investments in new plant and equipment, construction of public utilities like schools, roads and railways, etcetera.
But what is most important for us to know that the investment policy of a country, rich or poor, has everlasting consequences for its future welfare and prosperity of the nation. Wise investment gives better dividends and foolish ventures lead to wastage of national resources. Wrong investment can also be great hindrance for future development activities.
Since the emergence of Bangladesh as an independent country most of her major investments were in wrong projects and for wrong reasons. It did not benefit the majority of the people and in someway many people got into a vicious cycle of hardship and poverty. It is true, all the investments of Bangladesh government in the last long 40 years or so were not worthless, but nevertheless her major investments were mostly dim-witted and imprudent if not outwardly absurd or ridiculous. We need not discuss here about corruption, mismanagement and 'divine' kickbacks the people in power and their protégés got causing a very highly negative impact on the nation's development and prosperity. Thus, let me concentrate on and consider now 'dim-witted and imprudent' investments I am talking about. I will give only a few examples to explain my observation.
Road and Infrastructure Building: Military dictator HM Ershad is known to have been the pioneer of investment in road and infrastructure building. No doubt many roads and other infrastructure projects started taking shape as soon as the country was liberated and a new government began functioning. During Ershad's period, however, road building got high impetus. But one can raise a question: was it necessary to build all the roads that were constructed during this period? How much prudence and cautiousness were used in planning and building all of these roads? Dhaka should not have been allowed to grow as a monster city in the first place. It should have been kept small. By allowing roads and highways around it and building unplanned houses Dhaka has been made a filthy and mosquito-prone hell. A prudent government would have moved cantonments, some ministries and semi-government organisations out of Dhaka and connecting major cities from north to south and from east to east by railways and only by two major highways from Rangpur to Patuakhali and from Chittagong to Khulna. Bangladesh needs easy and simple transport systems like train and tram and NOT random roads and highways for driving second-hand and environment polluting Japanese cars by the few rich for fun. Car tax in Bangladesh should have been highest in the world to discourage people owning cars. However, that could have been possible only by making our railway system well spread and very efficient. By doing so the country could have a very useful transport system instead of expensive road links for the car users. Is it too expensive to have railways connecting the major cities of Bangladesh vis-à-vis road links? One needs not ignore the importance of road links but rail connectivity should have been our first priority.
The Jamuna Multi-purpose Bridge and the Padma Bridge: The Jamuna Bridge was established in 1998 to link the eastern and western parts of Bangladesh and the purposes were to:
(a). Promote inter-regional trade,
(b). Make movement of goods and passenger traffic by road and rail quicker, and
(c). Facilitate transmission of electricity and natural gas, and integration of telecommunication links.
All these are fine ideas I must say and I am quite sure most people will consider someone insane who could claim that the bridge was an imprudent project. But please hold on for a while and let me explain my point.
Such a bridge has much relevance for a country where people are rich and their 'time' is most valuable. But 80 per cent of the people of the northern region are very poor and live under a dollar a day. Many die of 'Monga' (seasonal joblessness) in this region. The only thing important for them is a simple meal for 'survival'. Using over billion dollars or so for such a bridge was a foolish investment in a country where poverty is so acute. This amount should have been used for economic development of the northern region, for example, improving agriculture, fisheries, husbandry and small industries that could give people a permanent source of income. By building small townships and self-sustainable community out of the scattered village huts and combining food production, healthcare centre, schools and colleges with it rural northern Bangladesh could be better off and nobody needed coming to Dhaka to drive rickshaw or scavenge food in the slums. Instead of the bridge there should have been a good ferry service to transport people and vehicles from one side to the other that may have been a MUST and necessary case for some people. The bridge has been useful for transporting agricultural products and other rural goods for the rich and the affluent in Dhaka who can now get it all at cheap prices. The bridge is also very good for the same group of people to visit their ancestral homes now and then quickly and comfortably by their environment-polluting reconditioned Japanese cars.
I strongly oppose the Padma Bridge project on the basis of the same argument that I have said about the Jamuna Bridge. Instead of using billions of dollars for this bridge we can make efficient ferry services and a railway link from Dhaka to Patuakhali or even up to Kuakata with a good ferry service on the Padma. The money should be used, as I propose for the northern region, for improvement of agriculture, fisheries, animal husbandry, small industries and housing in the southern region so that poor people could be economically better off and find no reason to come to Dhaka for scavenging food and dwelling in slums.
Here, for readers' full understanding of my point, I shall talk about the bridge on the Sound Strait (Danish "Øresundsbroen" and Swedish "Öresundsbron") that connects Danish capital Copenhagen and Swedish 3rd largest city Malmoe in Southern Sweden. This two-level super structured bridge is about 17 km (bridge, fast land raised by reclaimed land from sea and a 5 km long tunnel) and one of the finest bridges on earth that would last minimum 100 years. About 17,000 road vehicles use this bridge daily apart from thousands by rail. Sweden (per capita GNI or gross national income 53,000+) and Denmark (per capita GNI 60,000+) are two rich countries (per capita GNI in Bangladesh 700+ US dollars) of the world but they took over 80 years for discussion before building a fixed link between these two brotherly nations. This link consists of the world's longest cable-stayed bridge for both rail and motor vehicle traffic. The main span is suspended from four pylons that measure 204 m above the surface of the sea. The point I want to focus is the correct sense of priority and acting accordingly. These intelligent people do what their people need most and EXACTLY when.
Capital and city development projects: Capital and other city development projects are also a very interesting subject one can ponder to judge the rationality of investment in this sector very seriously. The first such project was initiated in early days of Pakistan time when they built the Dhanmondi Residential Area for politicians, influential people and bureaucrats. Its origin can be traced back to the late 1950s when the government acquired agricultural land from poor farmers at nominal prices and gave it to those mentioned above. A similar process is continuing unabated. The 'Dhaka Improvement Trust' (DIT) was established in 1956 under the provision of the 'Town Improvement Act -1953' and the objective of the Act was to improve physical and urban condition of the city. This corporate body had supreme planning and development control power within its jurisdiction.
DIT became Rajdhani Unnayan Kartripakkha (RAJUK) in 1987. The prime responsibility of RAJUK was almost the same, i.e. to develop, improve, extend and manage the city and the peripheral areas through a process of proper development planning and development control. They are doing it one can say. But they are doing it keeping the old corrupt system fully intact with highly innovative coordination of corruption. They occupy farmers' land the same way paying the minimum price, develop satellite towns spending public fund and distribute plots by lottery. Actually many things happen behind the scene and manipulation of lottery is often done to favour the politicians, their cronies, so-called freedom fighters, honourable NRBs (no-resident Bangladeshis) et cetera. I don't know what is their reason to offer a quota in plot allotment to the NRBs (actually they are mostly Bangladeshi-born foreign citizens) who have happily settled in Western Europe and North American countries. However, the point I want to say and emphasise on here is how this RAJUK destroys and has been destroying a highly profitable and useful means by allotting plots by lottery at nominal prices. On one side they deprive the farmers of their farm land by acquiring it at nominal prices and on the other hand deprive the organisation from huge profits by selling the plots much below the market rates. They could make huge profits and by the money earned they could urbanise a large portion of Bangladesh by now. A great opportunity was lost due to dim-witted and imprudent vision and mission of our government and the crooked RAJUK people. I take this opportunity to say clearly and loudly that no development project is worth taking or a good project that does not benefit the common people of our villages where over 80 per cent of our people live. Unfortunately, no government project that has been executed by Bangladesh government, past or present, falls in this category.
Investment in garments sector: Investments in the garment sector were equally a questionable subject. Bangladesh does not have any comparative advantage in garment business. Still the sector grew at an unprecedented speed. Today Bangladesh is the third biggest garment exporter in the world employing millions of people directly and indirectly. But everything in this industry developed in an unplanned and uncontrolled manner causing great pollution to our environment and giving 'slave' jobs to our womenfolk and children. Bangladesh will continue, I am sure, engaging her in this business sector, however unfavourable the comparative advantages she may have, as the country is caught in a vicious cycle through this business.
Investment in human resources: Investment in human resources is the most important investment of any nation and it means generally to invest in education. Bangladesh has done it, no doubt, but mindlessly and without giving any consideration to quality. While I write this note on education millions of poor students in Bangladesh, I am sure, are memorising things from the Quran and other religious verses in thousands of madrasas, without understanding anything even of their own religion. This madrasa education produces thousands of ill-educated people causing a social and intellectual crisis now and for the future generation. Who are the students of these madrasas? Do I need to elaborate? I have no comment on a government that let the poor population of the country go astray in this way and keep them ignorant for life. The country would not get rid of the curse of this ill education for generations to come.
Our schools and colleges are in a pathetic condition and our teachers in schools and professors at universities are doing everything but teaching. They are like dishonest businessmen selling ready-made notebooks at a high price wherever they find buyers. Schools and colleges are mushrooming under government and private initiatives without giving any priority to quality or necessity. Education is a crude and ruthless business in Bangladesh and our teachers are, if not exactly like the petty street hawkers who sell rotten or polluted goods, but almost like them with a pirated commodity called education. The government is also building schools, colleges and universities without proper understanding of the consequences of this mushroom development of poor institutions. I would give an example. Bangladesh had one Marine Academy. It used to produce top class merchant marine officers. Presently the government is establishing a maritime university and six more maritime academies for the reasons only the government knows better. We have now general universities, engineering universities, science universities and even a medical university and what not. But what is the objective of these 'all sorts of hocus-pocus universities'? Is it to create academic posts for politically-interested people who could be prominently focussed in newspapers as VC, Pro-VC, proctor, dean and what not? Hope we could have a rational explanation from someone of this unfortunate scenario.
Primary schools in the country are in a pathetic condition. Teachers often do not attend classes and officers in school boards are corrupt thieves busy earning money by hook or by crook. The highest bidders in bribing are appointed in schools as teachers. Does not the Prime Minister of the country know it? Is not the education minister fully aware of this fact? But who cares for this dismal situation in the education sector? To please everybody and to get votes by doing so and thus going to power are the only objective of our political leaders. Schools, colleges and universities are abodes of destructive politics and students in educational campuses wield sticks, knives and guns for political parties. Members of school management committees use schools as business centres and for earning illegal money. During the British Raj there were few government institutions that were not enough for a large population. Hindu gentlemen set up numerous schools and colleges, often with their own money and for their own community in the beginning, to impart education to people. BM College (Barisal), AM College (Mymensingh), BL College (Khulna), Victoria College (Comilla), MC College (Sylhet), Tolaram College (Narayanganj) and hundreds of primary and high schools were such private educational institutions that even today contribute to mass education. But these days we have over 50 private universities and hundreds of schools established by individuals and a group of greedy people for doing business and earning money. Most of these universities have no permanent teachers and no permanent campus; public university teachers they hire to teach who ignore their jobs where they are permanently employed and in the process students of the public universities suffer most. Most importantly, for earning extra money these teachers exhaust them fully and hardly can do any reading to improve their knowledge or keep them acquainted with recent developments in their respective fields. They keep their old notes and go on repeating it in classrooms year after year. Private educational institutions are not bad but the education business commodity, especially in a poor country like ours, is crude, immoral and indeed philistines' activities.
Here again, I must mention something about fees in public and private educational institutions. In a poor country like Bangladesh or Burkina Faso, education should be free for those who cannot pay. But those who are rich and well to do MUST pay for their education. Or, why not introduce fees on the criterion of pay as your economic situation permits? Why let well-to-do people get education on subsidy in public universities at the cost of the poor who never get a chance of any education at all due to poverty? Why not a student of a cadet college in Bangladesh does not pay fully or partially for his education when he can afford to do it? Why not introduce high value added tax (Vat) in private universities with the university fee when even a very poor man pays VAT for buying a food item or a lungi? A huge amount could be earned if we do so and reinvest it for betterment of our education system or even to offer financial help to poor students. These are simple questions and we have not used the opportunities until now.
Needless to mention here that education is the backbone of a nation. Investment in quality education only can lift Bangladesh out of poverty and misery and the sooner the people, the civil society and the government understand it, the better.
Investment in quality administration and an honest government: We need a radical change in our administrative system and that means new investments, if not in cash, in our way of thinking. Our present administrative structure is continued from Lord Cornwallis' time and from Lord Cornwallis' Indian administrative reforms of 1793. The structure, size and substance of this system did not change much during this long period and in spirit it remains the same. It is off a very little use in a modern society. Let us bury the offices of Upazila (sub-district), DC (deputy commissioners) and divisional commissioners now and bring a practical democratic administrative structure that will bring welfare and total benefit for our people. We need to dissolve Upazila, District and Divisional administrations and replace them with one administrative unit at the grassroots level and that means we need to make our union councils the only unit of administration at the grassroots level. Union councils must be in charge of primary and middle school education, primary healthcare, law and order, housing, care for the destitute, and employment (of men or women). In short, the union councils should do everything for welfare of the inhabitants. Municipalities and city corporations should be divided into small units like union councils and they must function exactly as a union council unit. The union council even should act as a primary court of justice, and all local disputes should be mitigated in this court. There should be even a small police force (3/4policemen) and a jail in a union council. That is how the administration in advanced European countries works.
Similarly we need to do something to establish an honest government. We must understand that poverty and affluence are the two consequences of bad government and good government. A bad and corrupt government makes a country poor and vulnerable and a good government leads a country to economic development and prosperity. But how can we get a good government-by not wishing or longing for a government by an 'Amirul Momineen' and certainly NOT by making Bangladesh an Islamic republic? We have no other choice but adopt a modern and secular democracy. There is no substitute for democracy and secularism in a modern world. We have experimented with a primitive sort of democracy and now we have 97 per cent members of our parliament who are corrupt and criminals. Indian democracy, the largest in the world, suffers from the same phenomenon. The reason is not difficult to understand. Democracy in the third world countries needs to change their old and outdated election system. The election system that we have is called a majority voting system, a very unfair and odd process in electing lawmakers for a country.
This old rotten system we must replace by a proportional voting system. The national government and the local government bodies of any country work best where such "proportional voting" system is in practice. Democracy is also better practised under a proportional voting system (or proportional representation system) where one votes for a party rather than for an individual. Among the advanced western democracies (except the USA and the UK), it is also the predominant voting system. The basic approach of the proportional voting system is simple: legislators are elected in multi-member districts, instead of single-member districts, and the number of seats that a party wins in an election is proportional to the amount of its support among voters. So if you have a 10-member district and a party wins 51 per cent of votes, it receives 51 per cent of seats. If another party wins 25 per cent of votes, it gets 25 per cent of seats, and if a third party gets 15 per cent of votes, it wins 15 per cent of seats and so on. This system eliminates 'mushroom' growth of political parties by making it obligatory for a party to obtain a minimum percentage of popular votes in the election.
The proportional voting system was devised to solve many ills caused by the majority voting system. As a rule, the proportional voting system provides and guarantees more accurate representation of parties, better representation for minorities, fewer waste of votes, a higher level of voter turnout, better representation of women, greater likelihood of majority rule, and little opportunity of vote buying and the use of muscle power. Decent people are attracted to politics by this system because they need not spend money or to run after the voters to be elected. The political parties list their candidates serially in this system and voters know in advance who would win the election if a party is expected to get a certain percentage of total votes. A party who nominates thieves and thugs would be rejected by the decent voters and thus more decency would prevail in the election process. By this system, the government of the ignorant, to some extent, also could be eliminated. (Anybody interested to know little about proportional voting system might read the election system of Germany or any of the Scandinavian countries).
We also need to make sure that the 'RULE OF LAW' functions in the country and no 'PERSONAL RULE' as it is in practice in most of the third world countries. A fully independent judiciary is another criterion of good governance. We need to change our outlook and frame our social system aiming to ensure equality, fair play and justice to each and every citizen.