Published:  12:00 AM, 17 March 2017 Last Update: 04:27 AM, 17 March 2017

Building special economic zones is a good initiative

Building special economic zones  is a good initiative

Dr. Ahsan H Mansur is an eminent economist and Executive Director of Policy Research Institute (PRI), Dhaka. He thinks, Rohingyas are legal citizens of Myanmar. They cannot be deprived of all services by the Myanmar government.  He thinks scrapping TPP by US President Donald Trump would affect open market economy. M A Khaleque has interviewed him on behalf of The Asian Age.

The Asian Age (AA): At present ethnic violence is going on in neighboring country Myanmar. As a result many Muslims living in Rakhain State are seeking shelter in Bangladesh. What is your approach to this issue? Dr. Ahsan H Mansur (AHM): Nationalism and ultra-nationalism are spreading rapidly in the present world. It also exists among the Muslims. We are also observing the activities of IS and Al Quaida in several countries. This sort of ethnic violence happened in Chechnya and Bosnia too. Now we can see this among Buddhists. We saw violence in Sri Lanka during their civil war. Religious violence is nothing new. But it is very shocking and horrendous.

 I believe human civilization should get rid of this kind of atrocities. We are getting involved in the Myanmar issue directly or indirectly. The ethnic violence of Myanmar impacts mainly two countries-Bangladesh and Malaysia. Rohingyas are Bengali-speaking people most of whom are Muslims. They are legal citizens of Myanmar. They deserve to enjoy all rights from the Myanmar government. The Myanmar government cannot avoid responsibility for ethnic torment on the people of Rakhain province. It is very inhuman that the Myanmar armed forces are torturing the Rakhain people and pushing them towards Bangladesh. It is a globally recognized policy that when one nation faces trouble, other states should come up with cooperation though no country is under obligations to do so. For example, if any Indian gets in trouble in any corner of the world, the Indian government tries to offer assistance to solve the problem through political and diplomatic efforts. It is a moral responsibility. Israel provides shelter and all other sorts of support to Jews of any country of the world. Lots of Rohingyas have in the meantime left for Malaysia and Saudi Arabia. It's a humanitarian task for us to provide shelter to the Rohingyas who have meanwhile entered Bangladesh. It would be like pushing them back to death if we deny Rohingyas' entry into our country.

AA: Do you think the entry of Rohingyas would affect our economy?
AHM: The refugees from Myanmar may cause temporary effects on our economy. But later on they can work as labor force for Bangladesh. In my view one or two lakh people from Myanmar would not cause much harm to our economy. We can deal economic pressure with the help of foreign aid. On top that the moralistic angle of this issue deserves highest emphasis.

AA: Donald Trump had pledged to drive away immigrants, to split up with open market economy, to impose 40% tax on Chinese goods before he became American president. Do you think he can really carry out all these things?
AHM: Donald Trump's election campaign was much unusual. He did not conduct publicity during the campaign in conventional ways and he succeeded by means of his exceptional campaign strategies. It is not yet certain what he would do next. He may cause more trouble or may even move away from his electoral commitments. He seems to be very unpredictable. American people are not familiar with this kind of governance. Donald Trump's approach is a threat to many countries, not just China. The situation of global politics is much tensed due to Donald Trump's gestures. Global economy is linked with global geopolitics. There may be new polarization in global political quarters. It is difficult to understand right now. It is not even clear how far he can do all these things just on his own. We need to observe how much support he gets from US Congress. It is totally shrouded in doubts how he would deal with the concerned issues.

AA: Donald Trump has said he would scrap TPP pact. To what extent do you think it may help Bangladesh?
AHM: In my view scrapping TPP would obstruct open market economy. Donald Trump's strategy is to keep himself away from everything except American interest. American interest comes first to him. He is not concerned how his work would affect others. It maybe called a self-absorbed policy. Donald Trump's foreign policy may contradict with the American foreign policy adopted after World War II. It cannot be said for sure how much support he would receive from his own party. Most of his remarks don't represent the values and ideals of his political front. He may even face impeachment if it is found that he evaded taxes. In my opinion, Donald Trump's aggressive policy may harm the United States as well as the whole world.

AA: A recent report shows that registration of investment proposals has declined by 32% compared to last year. Please tell us your opinion about it.  AHM: Some aspects of this issue contradict one another. Percentage of proposal registration has dropped but total amount of investment has increased. Several large investment projects have been registered. It is a good sign. If we can implement these projects we can gain more investments. Foreign direct investment (FDI) currently shows the highest figure of recent times. Even UNCTAD has reported that real investments of 250 crore US dollars came to Bangladesh in 2015.

AA: Amount of defaulted loans has exceeded 1 lakh 8 thousand crore taka. What are the reasons behind not succeeding to recover defaulted loans?
AHM: Some influential, unscrupulous people are exploiting the banking sector. The government should be more vigilant about this thing. These people are becoming wealthier day by day. But some banks are getting weak because of rising amount of defaulted loans. The only way to stop it is to drive these people out of government's favour. At the same time they should be brought under legal actions. Banking sector cannot improve until and unless corrupted bankers and deliberate loan defaulters are brought to justice.  AA: The country's inflation rate is very low at present. It is right now a little higher than 5%. How can this low inflation rate benefit the country's economy?

AHM: Price hike has decreased in our country. But I cannot say it has declined much. Inflation rate in Bangladesh is now 5 and a half percent. I think it can be further reduced. Inflation rate of our commercial partners is 2.5% to 3%. If we cannot further curtail inflation rate, local currency value will increase. If local currency value rises then we may fall behind in terms of international competition. It would be very beneficial for our economy if we can control price hike rate within 3% to 4%. If we can pay 4% or 4.5% interest to depositors then we can reduce loan interest rate to 7% or 8%.

AA: The government has decided to build up 100 special economic zones across the country to boost investment. How far can it help to upgrade the investment scenario? AHM: I believe it's a good initiative. It should have been done even earlier. Certain laws were made for special economic zones in 2010. Implementation of some of these zones is underway at present. We need to make at least 15 or 20 special economic zones operational shortly. Some foreign investors are not finding suitable plots or locations for investment. We need to ensure infrastructural and other facilities for investors very soon. 

AA: A lot of people are spending borrowed money for other purposes, which was disbursed for SME sector. What is your viewpoint about this thing? AHM: It is a very old problem. This problem is not so complicated. Whenever any special scheme comes up we don't value it. Most of the beneficiaries of SME loans are large entrepreneurs. Small entrepreneurs like farmers and women often don't get these loans. As a result they don't get the benefits of such schemes. This problem needs to be solved so that small entrepreneurs and women feel encouraged to go ahead with their business initiatives.

AA: Larger loans have been recently rescheduled. But these rescheduled loans are once again being defaulted. What's your assessment about this phenomenon? AHM: All our efforts to recover defaulted loans have failed. In the same way rescheduled loans have been defaulted too because those who took these loans did not change their characters. Therefore, effective steps should be taken by concerned authorities to recover loans and to ensure transparency in the banking sector.

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