State of politiconomy of Bangladesh

The term politiconomy is coined by taking the first six letters “Politi” of the word political and stitching them to the last six letters “conomy” of the word economy, and hence the term politiconomy. It is a hybrid or fusion of political science and economics— one that studies economic systems (e.g., markets and the domestic economy) and their governance by political systems (e.g., law, institutions, and government)”. This system embodies goods market, markets for labour and financial markets, as well as output growth, distribution of that growth, income inequality and international trade, and how these are influenced by institutions, laws, and government policies. Politiconomy in its modern description is deemed an interdisciplinary field, flourished by adopting theory from both political science and contemporary economics. The Journal of Economic Literature uses three codes to classify political economy with three sub-areas. They are:
• The role of government and/or class and power relationships in resource allocation;
• Economic impacts of international relations; and
• Economic models of political or exploitative class processes. 
This article focuses lopsidedly on the first sub-area of political economy of Bangladesh and highlights a few intricate political, economic and resource constraints that have been posing hindrances to progress. The country is born out of the spirits of participatory democracy, freedom of the media, rule of law, equal justice for all, free of exploitation by business magnates class and so-called elites of society. The unassailable question at the outset is: did we achieve these goals after 52 years of existence as an independent and self-ruled country? If not, then why not?
In an article titled “The State of the Nation” (Nov. 27, 2005, The Daily Star) I wrote, “My country is in shame, not because it has done something iniquitous, but because what its politicians have led it to — an economy in shambles, governance and judiciary in progressive politicisation, a media in intimidation fatigue, its democratic institutions in disarray, and people in corruption weariness. During our early years of schooling, we all learned “when money is lost nothing is lost, when health is lost something is lost, but when character is lost everything is lost.”
Eighteen years have passed since that article was written based on the prevailing political and economic conditions at the time. Today, I was reviewing that vintage article and was assessing the current state of the nation and the economy with a dispassionate mindset. This article addresses only the failings that are either continuing or worsening.
On the economic front, the country has earned global acclaim with per capita income increasing steadily. Per capita income is largely credited to expatriate remittances and export of readymade garments. Infrastructure developments in recent years and more in the offing are commendable and will help boost economic growth and prosperity. The growth of institutions of higher studies including medical and engineering colleges is a clear milestone and cause for celebration. This year Bangladesh joins the Nuclear Club as the 32nd country generating electricity from nuclear fission.
Now the accountability of the list of failings. What about gender inequality and poverty reduction? What about people’s struggle with price spirals of daily essentials, rule of law and governance, politicisation of the judiciary and law enforcing? The media is more intimidated than any time in the past, the country is still ranked 147 in the world in corruption perception index, and democratic institutions are in abject disarray. In the 2024 national election, voter participation was a dismal 42 per cent— the worst ever since the country became independent in 1971.Redressing these does not need squandering taxpayers funds or hard-earned foreign currencies.
Bangladesh economy, poverty reduction, and foreign currency reserves are heavily dependent on remittances along with export earnings from ready-made garments. It is, however, encouraging to see that there is a strong realisation among the policy makers that the country must diversify its export earning potential. That realisation must translate into reality – the sooner the better. What stands in the way though is declining foreign exchange reserves due to rising import bills, which is one of the reasons behind the stubborn price spirals and continuing currency depreciation against the U.S. dollar. The weakness of the economy is exposed when Bangladesh has sought a $4.5 billion loan from the International Monetary Fund (IMF). Of course, IMF exists to lend reserves to countries deficient in reserves. But what about the unbridled capital flight that is slowly impoverishing the country with foreign currency reserves?
In a capitalist and free market economy, sources of funds for business investment and economic expansion depend on how strong and efficient its financial market is. Unfortunately, even after 52 years of its existence as an independent country, financial market in Bangladesh is still in a primitive state. Because of recurrent hartals and rampant corruption, public distrust in corporate accounting and finance, business conditions are not congenial to stock market investments. If businesses are not profitable and the factors that foster economic growth are hindered by hartals, lockouts and corruption, financial markets will remain ineffective to generate sources of funds for business expansion and cease to function efficiently.
In one of my articles I argued, “Why doesn’t GDP growth glitter gold for all”. This will continue to happen if the GDP growth policies are not inclusive of the people trapped in poverty and victims of income inequality and gender discrimination. Until the government adopts aggressive programmes to lift the people trapped in poverty by creating employment opportunities for the able bodied one and educate their children a big chunk of tax revenue will be drained on social welfare into feeding them. Economic growth is welcome news, but that growth must be low inflation growth.
Of course, the poor in developing economies benefit from higher growth driven spending (through redistribution of tax revenues) from sending their kids to free schools, using free rural health clinics, improved rural road services and transportation etc. However, higher inflation as the country is experiencing now may relegate many school going children back to bread earning low paying day jobs: house servants, rickshaw pulling etc., — placing the past gains in poverty reduction in serious jeopardy. Therefore, economic growth is certainly not sufficient for boosting the overall wellbeing of the citizens. That is precisely the reason policy makers should always focus on non-inflationary or at least low inflationary growth. Nobel Laureate economist Amartya Sen argued, “While economic growth is important for enhancing living conditions, its reach and impact depend greatly on what we do with the increased income.” Columbia University Economics Professor Jagdish Bhagwati argues that while growth does benefit the poor, the rich often benefit disproportionately. Therefore, the poor must have access to education to increase their economic opportunities.
Lastly, I would boast by admitting that one of the luxuries I have been enjoying by living in the U.S. over the last 47 years is press and media (PAM) freedom. No country can reach the pinnacle of economic success and global respectability without having a free PAM. What is the status of free PAM in Bangladesh? The country scored 37 out of 100 in World Press Freedom Index (WPFI, 2023) and accordingly ranked 163 out of 180 countries surveyed – a dismal manifestation of the state free PAM. This a significant deterioration from its 2019 score and ranking (49.26 and 150 respectively).
Autocratic (undemocratic) and hybrid regimes around the world use state machinery and fraud elections to hold on to power and throttle the PAM by intimidation, repression, and prosecutions. These leaders know well that a free, open, and matured press not only bridges the information gap between the government and its citizens but also acts as corruption watchdog and confronts religious extremism, encourages political participation. All these desirable goodies enhance productivity of resources and hence economic growth.
Nobel Laureate economist Joseph Stiglitz emphasised that efficient and effective political and economic markets require accurate information. The PAM provides that and “shortens” the gap between the government and the public by keeping the flow of information helping the implementation of policies effectively, efficiently, and timely.
In conclusion, we may not forget that there is no alternative to politicians ruling the country and no alternative to press and media freedom to keep the politicians adhere to democratic values, good governance, and deliver political goods to the people who elected them to power.

Dr. Abdullah A Dewan, formerly a physicist and a nuclear engineer at BAEC, is Professor of Economics at Eastern Michigan University, USA. [email protected]