The Financial Express

Business-government alliance: Corporatist Bangladesh?

Imtiaz A. Hussain | Published: May 19, 2016 19:11:40 | Updated: October 23, 2017 04:35:11

Business-government alliance: Corporatist Bangladesh?

One of the big victims of global neo-liberalism has been corporatism. It typically refers to a policy-peddling network comprising of influential business leaders, on the one hand, and on the other, either state officials (party leaders), labour unions, bureaucrats, or any combination of the above. Accordingly, it can be societal or statist, depending whether the most influential group happens to be social groups (businesses or environmental, for example) or the state.

It has been a centuries-old behavioural pattern across Latin America, Mediterranean Europe, Far-east Asia, and so forth; and has been contrasted with pluralism in which societal groups determine policies competitively (the election determining which party is in power, thus more capable of pushing its own specific interests): an election distinguishes it from corporatism, since left-of-centre parties (the Democrats in the United States, Labour in Britain, or Social Democrat parties across Western Europe) have typically been union-friendly in  western democracies, therefore promoting employment regardless of inflationary pressures, and public spending, while right-of-centre parties (the US Republican, British Conservative,  or Christian Democrat parties across Europe) have historically favoured business, therefore limit wage-hikes and governmental spending, while reining in inflation even if unemployment increases.
What is emerging of late is a mixed-bag: even pluralist countries, like Great Britain and the United States, have been not just practising, but also instituting selective corporatist practices, while market reforms in previously corporatist-based countries have adopted neo-liberal reforms (whether wholeheartedly or superficially) without abandoning corporatist tendencies and last-resorts. For example, Bill Clinton won the 1992 election largely by moving to the political centre, befriending businesses over labour, and hijacking the Republican platform; Tony Blair did likewise in England at the expense of John Major's Conservative Party; and across Latin America, we still see so much of nepotistic or cliquish inclinations of governmental leaders in all of the major countries that the full array of democratic possibilities still remain elusive.
Bangladesh seems to be developing more of a corporatist than a plurilateral pattern if recent developments give any indications. Illustrating this most vividly may be the post-Tazreen, post-Rana Plaza RMG industry: since it is the country's largest, by far, how it emerges from the contested dynamics currently may establish the mode for other industries, indeed, of policy-making networks generally.
On the one hand are the businessmen, whose negligence or indifference led to those tragedies, as indeed to the even more factory fires that sort of defined the RMG sector (in 2012, for instance, 115 people lost their lives in 250 fires, as this newspaper observed in its editorial on April 18, 2016). Many of the businessmen were or are either parliamentarians, or influential over elected officials, thus opening networking doors with the government. No doubt, many of them were shocked by the tragedies; but not all have accepted the Sustainability Compact adopted by the Accord and Alliance, among other international bodies: the Accord represents 200 European retailers (where 60 per cent of our RMG sales go), the Accord is the flagship of 20 US/Canadian retailers; and both seek fire safeguards, strengthened building structures, and, inevitably, representative workers associations. Formulated as watchdogs, they question if some sine qua non provisions of the Accord and Alliance have been fulfilled even if reported as fulfilled (an April 2016 Alliance report, for example, mentioned only 24 factories, out of 677, have meet the requirements).
On the other hand, the government has become an important player in this reform movement, as one might expect. Hitherto a silent player vis-à-vis RMG activities, it is increasingly adopting an assertive role. Because Accord/Alliance reforms have been made contingent to key trade agreements/arrangements, such as the US Generalised System of Preferences (GSP) or Trade and Investment Cooperation Framework Agreement (TICFA), the government's engagement gets deeper; and the slower the RMG reforms, the greater the policy-related pressure on the government. No wonder Commerce Minister Tofail Ahmed only just mentioned the Accord/Alliance would not be continued when its current term expires in June 2018, a time-span too short for full RMG-based reforms to be completed.
A third player relates to worker's rights. Bangladesh has never had unions strong enough to paralyse the country, hold businessmen at bay, indeed, fail to shift from being the nuisance it can be to wielding a stick at the government: "hartals" have generally been spontaneous, more specific-issue driven, and, thereby, developments appealing more to workers at large beyond organisational membership, and much like the centuries-old patron-client network in Latin America (and India, among others), that extended the lord-peasant relationship (the Aztec emperor and the masses) to the conqueror-indigenous counterpart (Spaniards-Indian natives) five centuries ago (and far, far longer in India, Japan, and other countries), the Bangladesh RMG magnate's relationship with the workers fit into a master-servant (sahab-chaprasi) relationship that continues as a defining aspect of contemporary society: wages depend upon performances, but never enough to make both ends meet, which non-monetary compensation balances. Unlike the household servant, for instance, RMG workers have no insurance against fires.
Trade unions emerged and evaporated depending upon how much pressure businessmen or the government wants to bear upon any grievance issue. Even as they have been marginalised in countries adhering to neo-liberal policy approaches (as all Accord/Alliance home countries are), the organisational staying power has kept them alive and alert, and often in collaboration with civil society groups. Therefore, the US AFL-CIO (American Federation of Labour and Congress of Industrial Organisations), of which there is no counterpart across Bangladesh, demands worker's rights for their RMG factory workers too.
It is unlikely trade unions will grow in Bangladesh in the near future, since the alternative of a Welfare Association has been approved by the government: though created in EPZs (export-processing zones), they serve as a model of what might emerge in RMG factories, without fully satisfying Accord/Alliance preferences. Bangladesh's government can afford to take a tough stand on the issue since RMG demands have soared and our US exports continue to climb (beyond $6.0 billion as of April 2016), while as European demands likewise spiral beyond imminent controls, EU diplomats continue negotiating with Bangladesh RMG producers and the government in instituting reforms, piecemeal to begin with.
In other words, our corporatist power based on a business-government alliance is presently strong enough to (a) withstand RMG reform pressures beyond certain thresholds; (b) overpower any other policy-influencing network; and (c) prevent the age-old man-servant relationship from withering too soon.
On the other hand, external pressures have not, and will not, play dead. A number of factors could empower them: (a) any further RMG factory tragedy; (b) Bangladesh losing its RMG edge in the next 3-5 years; (c) the strength of external social organisations and civil society groups; and (d) linkages with other policy arenas where Bangladesh is more vulnerable.
Ultimately, even if RMG reforms win the day, or die a sad death, the corporatist network is set to grow far into the future: any change of government would change the players who benefit, but not the corporatist organisational structure, while governmental continuity strengthens the corporatist movement.

Dr Imtiaz A Hussain is Professor, International Relations, formerly Universidad Iberoamericana, Mexico City.

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