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In sports specially in cricket or football, technical reasons to postpone or stay a game is always favoured by the team with higher losing probability. It is a good excuse to save face and avoid the loss of faith from supporters. The same analogy, may be applied to the current circumstances surrounding the by-polls of Dhaka North City Corporation (DNCC). The esteemed High Court did its due diligence based on legal grounds to stay the by-polls.
The whole debacle shows that the Election Commission (EC) of Bangladesh either is not independent or incompetent, could be both. This truly is a picturesque moment showing the weak governance and dysfunctional institutions of our republic. A capable EC should have scheduled the by-election considering the proper time-line to resolve the Ward Commissioners' term limit issue. The EC will deny any undue influence from the ruling party. If that is true then the EC confirms its incompetency. A "great achievement" for the EC is that even without holding the election it was able to prove its incompetency to perform its role.
Eventually the by-polls will happen, and the deserving candidate will be the mayor. However, as it is an election year hence it would be difficult for the incumbent government to make favourable condition for any candidate it endorses. Whatever the noises are regarding the free and fair election the truth is that election engineering and vote rigging are customary in Bangladesh's political-economic culture. Such practices are possible to hide in rural areas but in the Capital Dhaka, it would be very difficult to hide such malpractices. It seems the ruling regime is in a dilemma!
A free-fair DNCC election is a necessity for the government to establish that they can conduct election in a neutral manner; however, it also means ruling party's candidate increased probability of losing. Without a free and fair DNCC election, the neutrality factor for the 2018 national election would be questionable. In Bangladesh the systemic factors compounding in election year by default creates an unfavourable economic condition. We are all consumed by the election related buzz words, but we need to look at the economic factors to understand an election year in Bangladesh.
Election year dynamics of Bangladesh's macro-economic variables are true representation of economic resilience. If we observe since 1990 until now, the trend in election year economic indicators, then it shows that consistently in election years there is a measurable decline of economic growth. In contrast to that in other countries, the ruling party, hence the government, tends to trigger a positive economic atmosphere before election by using different monetary tools. Through policy instruments government tries to increase productivity, investment, job creation and reduce inflation. Such steps stimulate the economy and hence creates a favourable condition for the incumbent's re-election. Such political goal-oriented election-year policies have been critiqued heavily as these measures do create a positive economic cycle but for short-term.
Moreover, if the short-term measures are continued for long-term and becomes an entitlement condition, then the same policy instruments end up creating unemployment, excessive liquidity, inflation and negative trade balance etc. Even when proper pecuniary measures are taken it is not enough to balance the artificial bubble.
Bangladesh's election-year economic cycle does not follow that pattern. However, the opposite trend does not mean it is good news for Bangladesh, rather it just means it is opposite. Bangladesh's mass population and their "elected" representatives both understand each other's intentions and expectations hence maintains a decorum of indifference to sycophantic behaviours and fallacious promises linked with elections. The voters know from experience that they cannot expect any of the promises made to be fulfilled by their "elected" representative. Similarly, the candidate knows in current political system it is impossible to placate so many voters and hence relies on a combination of deal-making and election season tangible benefits.
So, in an election year with such known expectations and built trust on political system's inability the society as whole goes into a hibernation mode.
In an election year with uncertainty, indecision factors, probability of violence people hold on to more liquidity, investment goes down, savings increase and most of all capital flight increases. The economic indicators and reports have already started to show such trends. In Bangladesh election year circumstances create a path dependence of short-term economic bust and this is triggered by the rational decision of the businesses, consumers and people in general.
People of this country might have been denied to exercise their pluralistic rights but that does not mean they can be forced to make economic decisions in the same manner. That is the strength of capitalism and free market economy. The economic performance of a country in an election year, after considering the obvious biases of artificial boom or bust, is the true approval rating for the government. The declining indicators collectively represents the distrust and disapproval towards the ruling party. Higher inflation rate (specifically food inflation), trade deficit, banking sector irregularities, revenue shortfall tells us already that this year is an election year. Gross domestic product (GDP) forecast for Bangladesh from the World Bank has been lowered, Centre for Policy Dialogue (CPD) has stated the grave looming crisis in the banking sector and mega projects are projected to become mega disappointments.
Maybe given the "incredulous" nature of Bangladesh's politics it may even be possible to stay the upcoming National Election through a technical injunction or court ruling. However, there is no such measures to stay or pause the economy and its forecasted decline in an election year. Bangladesh's weak economic resilience and uncertainty, being, the only certain factor, make it a rational choice for people to become economically reclusive. Historically, this countrywide collective mindset propagates the economic slow-down further and recovers only after the election.
What we need to worry for Bangladesh in 2018 is that this cycle of boom-and-bust might fail entirely given the overall systemic leverages being pushed to maximum. The economic downtrend of 2018, fuelled by election year factors and underlying systemic conditions, might become permanent and that cannot be stayed by any technicality.
The writer is Archer Fellow Lee Kuan Yew Scholar