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Review on FORUM (March Issue)

March 29, 2009

FORUM (March issue) comes up with some brilliant pieces. Since I did not read all of them, I am going to make comment on few of them.

 

Admittedly, the best piece in this issue is The Way out. In this piece, Hasan Imam shares his ideas in dealing with the ongoing global recession from an economist point of view. He first presents the idea of ‘No Action’  which is shared by a good number of academicians. The argument of this school of thought is that any government intervention will make the situation worse. Policy changes and intervention will give rise to protectionism, which the free market thinkers strongly dislike.

 

However, he also gives reasons why intervention is necessary. Let’s put it in his words: “At times, these crashes are so steep that the economy cannot climb out unaided.” According to him, since the current downturn is an expansion-meltdown-contraction economic cycle instead of a typical expansion-contraction-expansion cycle, massive intervention program is  needed to avoid depression. He presents a complete set of tools, which government across the world are currently using, for recovery plan. Then, he recommends some policy recommendations for Bangladesh: interest rate cut, restrict credit flow toward short-term export capacity expansion, provide tax relief, fiscal stimulus, ease tax burden on productive sectors, nurture capital markets, create a stabilization fund. He finally wraps up with few words of hope. He points out that the current crisis also opens up opportunities for countries that produce cheap and quality manufacturing goods.

 

Can Bangladesh Textile exports Survive?, written by Ahsan Mansur, is another laudable piece in this issue. In this piece, Mr. Mansur argues why Bangladesh’s garments sector is doing well at the early stages of global recession. He seriously questions the frequently chewed factor—The  Wal-Mart Effect. He thinks that there is no reason to be complaisant about The WAl-Mart Effect. He quotes from   Prof. Taslim: “Our export sector is in deep trouble if it is spewing out mostly inferior goods since the demand for these products will certainly decline when income rises. We do not yet know of any product whose demand increases with both an increase and a decrease in income.”

Moreover, giving example of Jonathan Dunn, IMF resident representative, he argues that Affluent Americans have ample of clothes in their closets. This means they don’t shift to inferior goods in short term. Moreover, Mr. Mansur identifies recently opened outsourcing centers of the multinational corporations in Bangladesh to be the reason for garments sector’s export growth during the early quarter of global recession. It is mainly due to the growing cost pressure and currency appreciation in the countries like China, India and other East Asian emerging countries. Despite the effect of lower demand from industrial countries, textile exports from Bangladesh may still grow, as Mr. Mansur analyses, since there is a demand shift from other textile exporting countries towards Bangladesh. Finally, he predicts that textile export will grow well if the above argument is true. On the other hand, if the Wal-Mart effect is true, then textile export will suffer severely during the post-recovery period.

 

Commander-in-Chief, written by Syed Ahmed Mortada, reveals a hero of 1971—MAG Osmani—who is little known to the new generation of the Bangladeshis. How many of us know the fact that ‘Papa Tiger’ was the youngest Major at the age of 23 in the British Imperial Army? When I was reading the piece, I found  it was trying to prove that Bengalis are not ‘non-martial’. The piece is full of facts and true incidents that glorify Bengalis as a ‘martial race’. I love one incident where the Pak Army GHQ put the Bengal regiment on a month long military test. This difficult military exercise involved many back-breaking tasks such as survival of 1 East Bengal soldiers for 3 days and 3 nights  in the extreme cold weather of Punjab, marching 19 miles across the mountains of Jhelum with heavy weapons on their back etc. Bengalis successfully finished the exercise, and this achievement removed the obstacle in raising the number of Bengali battalions.

 

Jyoti Rahman’s ‘How Devolution Can Change Our Politics’’ is about the pros and cons of decentralization of powers at the local level. I’m quite agree with him that devolution will strengthen democratic performance, devolution gives rise to new leadership and devolution will end winner takes all politics. He also raises some arguments against devolution. Among these arguments, I agree with the following two: devolution is costly and it will strengthen reactionary policies.

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