Views
6 years ago

Resolving the 'connectedness' crisis

Published :

Updated :

Bangladesh's pathetic placement in the 2018 Global Connectedness Index (GCI: 140th out of 169), portrays one of the key reasons why it is struggling to find its place in the political economic sun. In spite of importing so much of needed inputs for its ready-made garments (RMG) industry from one part of the world (largely China and India), then exporting the finished products to another part of the world (largely Western Europe), apparently it is not seaming up sufficiently well to close the gaps and climb higher. The same oddity characterises the migration-remittance nexus: sending so many workers to so many other parts of the world (the Middle East primarily), then cashing in on one of the top remittance flows in the world, it still cannot escape the connectedness ground-floor. Why cannot we glow even on these, our trademark, fronts? Other avenues must be explored.

Three formulas automatically come to mind, described to expose the increasing levels of complications involved: a free-trade policy orientation; diversifying from low-waged and low-priced investments to high-end ones; and raising the domestic safety-security ante. Since the GCI measurements include trade, capital, information, and people flows, any paucity in openness, broad-mindedness, and fret-freedom can stump any socialisation effort in its bud.

Beginning with the free-trade proposal, one must first position Bangladesh where it actually lies currently. No better a measure of that than the degree of trade protectionism: for countries that are supposed to matter, Bangladesh ranks abysmally low here too. It is one of the most protectionist countries in the world, with an average of 10.7 per cent. The same World Bank estimates show India's comparative 6.3 per cent, Pakistan's 10.1 per cent, and Sri Lanka's 6.8 per cent scores in the South Asia region. Broader still, we find Cambodia with 9.8 per cent, Indonesia 2.6 per cent, Malaysia 4.0 per cent, Myanmar 4.1 per cent, the Philippines 3.4 per cent, Thailand 9.5 per cent, and Vietnam 2.9 per cent. In this cluster lies many of our, especially RMG, competitors, yet the clearest sign of them moving ahead of us faster and higher seems to be written on the wall with their lower tariff levels. France, Germany, Great Britain, and Italy, where the bulk of our RMG exports go, boast 2.0 per cent each, alerting us as to what we need to do if rank-climbing is our goal, while the United States with 1.7 per cent and China with 3.5 per cent show how even at that petty-level a serious and substantive tariff-war can take place.

When we find India and Pakistan ranked 74th and 127th on that GCI list, Malaysia and Myanmar 12th and 133rd, respectively, as well as the rising global star China at 61st, we cannot but swallow a hard one: Pakistan was just ranked "junk" by Fitch credit-raters, while Myanmar remains one of the world's foremost ethnic-cleansing countries today; China and India may be aspiring global leaders, but their rankings, though heads-and-heels above ours, still leave a lot to be desired; while Malaysia (and other Southeast Asian countries), not to mention France (and all other West European countries), offer a model that leaves us embarrassingly exposed.

A fine starting point might also be the decisive one on this very front: damn the tariffs, but full-speed ahead with free-trade agreements. We have none, which is not the way to climb any global economic ladder to begin with. Though Bangladesh is overseeing the free-trade BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral, Technological, and Economic Cooperation) objective, it must champion and institutionalise this policy approach, first within the BIMSTEC arena, then towards Southeast Asia, before spreading the campaign elsewhere.

If we do, we may motivate many more foreign exporters, even if that fattens our import column in the trade ledger. Yet, we will end up reducing smuggling (a costly externality that does even get counted in the connectedness measurement), while by sanctifying conspicuous consumption, conspicuous exportable items might also be encouraged. Above all, we will have opened up more windows, therefore more connections, both with the number of trading partners and the items involved. Even more of a boom might be seen in our labour exports, giving higher-wage level jobs greater mobility. Not only do we need more high-wage, white-collar workers from abroad, but so do countries like Germany and Japan from abroad, for example, even from Bangladesh. Here we might find flows expanding over time which enter GCI measurements. In short, the more we loosen regulations (on trade, travel, and so forth), the more mainstream we become.

The more the free-trade flows, the more the spillovers in arenas such as human mobility across borders, whether as workers or visitors, like tourists, as well as investments of all sorts, bringing with them technological shifts and technical experts, not to mention students and teachers as they revamp their skills. This second proposed formula carries with it the automaticity that characterises free-enterprise systems: particularly, for us, the shift from low-waged production to higher-skill demand destinations, if not for this generation of workers, than their children's, if not to expand our known exportable trademark, that is, the RMG brands, then to open unknown products for the global market.

Many more policy adjustments will be needed, for example, on profit repatriation, visa-loosening arrangements, elevating traffic and food/health standards to global levels, and opening to discrimination-free recruitment policies, particularly along gender lines and with minority groups. Yet, these are the very essence of industrialising and post-industrialising societies, the symptoms of a society not only moving upwards, but also socialising laterally. Membership in this club needs to be pursued more vigorously.

Sealing these developments is the third proposed formula, a system of guarantees through both transparent policies and regulations as well as tangible safety/security measures, like reliable police/enforcement agencies, and the like. This may be the hardest since it stirs more instincts than the other two, but it is the one that delivers the underlying connectedness goal with greater certainty. It confirms the society is safe enough, even if it is impoverished; and the many  tourists who travel to places like Nepal or West Bengal, might fit in a Bangladesh stop-over without additional qualms, as too investors, for example, those in Myanmar who might contemplate a Bangladeshi extension, or even a Bangladeshi RMG exporter to European destinations exploring Canberra, Colombo, or Kolkata.

Those are the buttons to be pushed to get anywhere on the connectedness ladder, and the charm about each step is simply that more windows open of their own than the steps taken once the original plunge is made. These ripple-effects are what connectedness is all about; and they all begin where 21st century transactions will profit the most: with openness, transparency, competition, and technologically savvy consumers.

Anyone for unfastening their seat-belt for the ride?

Dr. Imtiaz A. Hussain is Professor & Head of the Department of Global Studies & Governance at Independent University, Bangladesh.

[email protected]

Share this news