Why despots love development stats

Like every other known despot in world history in the last century, Sheikh Hasina too used "development statistics" to "legitimate" her rule as she clung to power by rigging three consecutive general elections since 2014.

As she also lost the moral authority to stay in power, like other dictators Hasina started using economic growth data to convince people and the world that Bangladesh was thriving under her effective leadership though the integrity of most data has long been questioned and criticised.

She however did not need to invent such a playbook. Benito Mussolini of Italy, Joseph Stalin of the Soviet Union and Kim Il-sung of North Korea, among other dictators, frequently used development statistics to project an image of economic progress and stability and to justify their rule and maintain control by using forces. 

Major economic data such as GDP growth, inflation, exports and unemployment released by either the Bangladesh Bureau of Statistics or any other government institutions during the Hasina regime were accused of being doctored by the government.

Economists, academics and businesses continuously labelled them as "manipulated." In producing data, the tendency was always there to exaggerate those which portray rosy economic pictures.

When the country's economy was flying, as per government data, recording an average of 7% growth before the pandemic hit, the rate of increasing unemployment raised questions over the growth which was also termed "jobless growth."

After the pandemic, when most economies were still struggling to recover and return to a growth trajectory as the Russia-Ukraine war broke out, the Hasina government boasted a 5.78% GDP growth for FY23, outpacing not only the World Bank's 5.2% forecast but also the Asian Development Bank's 5.3% and the International Monetary Fund's 5.5%.

This gap between forecasts and outcomes raises a key question: Is Bangladesh underestimated by global institutions, or do these discrepancies reveal the regime's skill in manipulating data to control the narrative? 

This is why dictators love Big Data—the power to shape perceptions and reality.

Economist Luis R Martinez, a professor at Harris School of Public Policy, University of Chicago, who investigated dictators' GDP-growth figures has come up with noteworthy findings.

The results of his study "How Much Should We Trust the Dictator's GDP Estimates? suggest that autocracies overstate yearly GDP growth by approximately 35% compared to democracies.

There are many examples of data discrepancies in Bangladesh.

Mismatch in export data has become the biggest scam. 

Amid outcry, the central bank in the latest monetary policy released on 18 July said the monetary policy committee discussed the recent revision in the export data. BB officials explained that this affects data for the last three years FY22-FY24.

Major economic data such as GDP growth, inflation, exports and unemployment released by either the Bangladesh Bureau of Statistics or any other government institutions during the Hasina regime were accused of being doctored by the government. Economists, academics and businesses continuously labelled them as "manipulated."

"The revisions suggest that exports have been falling over the past three years. The estimated total exports for FY2024 is likely to be around $42 billion, which is $10 billion less than the figure reported by EPB based on NBR customs data," it said.

When EPB was coming up with export data every month claiming growth every previous month, exporters were puzzled as they did not see that growth in their business.

The inflation data released by BBS has also been questioned on grounds of its authenticity. The reality on the ground did not match with the monthly released inflation data. When BBS claimed general inflation below 10%, businesses and bankers in their budgeting calculated inflation as 14%-15%. It was almost an open secret in the business and banking sector.

Bangladesh Institute of Development Studies (BIDS), an autonomous body, has debunked a myth about food inflation. It conducted a field-level survey and came up with its findings on 9 May saying actual food inflation in Bangladesh stood at 15%, contrasting sharply with the 9.87% figure reported by the BBS for March.

Take the surprising health inflation data released by BBS last December.  

Rural inflation numbers were higher than the urban inflation numbers since June last year with the gap widening to nearly 50 basis points in November. But health inflation data, released by the BBS on 4 December last year, pointed the other way – the rural health index dipped to over 7% in the negative in November, while the urban rate was 3.63%.

BBS data show a massive decline in rural healthcare costs, driving down overall health sector inflation to negative territory for three months in 2023 in a row. When the data was questioned in the media, particularly by The Business Standard, BBS came up with something different next month.

After a surprising few months of negative trends, national and rural level inflation in the health sector experienced a notable upswing in December and returned to positive territory. 

National health sector inflation in the final month of last year was 1.16%, according to BBS data released in the following month. The number was 3.83% in November. 

In October and September, health inflation was -1.73% and -3.92%, respectively.

A few months ago, an annual report from the Ministry of Fisheries and Livestock claimed a 1.56 lakh tonne year-on-year increase in fish production in the last fiscal, contrasting narratives emerged from fish farmers across the country.

Official figures show production reached 49.15 lakh tonnes in FY23 compared to 47.59 lakh tonnes in FY22.  This increase in yield was primarily attributed to the thriving fish enclosures. In FY22, pisciculture was responsible for supplying 57.39% of the fish.

However, ground reports painted a contrasting picture with many small and large fish farmers facing significant challenges in the last two years, leading to low production and even closures of farms, according to a TBS report on 17 December last year.

The impact of the pandemic was cited as a major factor by farmers, which resulted in capital losses and disrupted supply chains, forcing many farmers to reduce or stop production. The Russia-Ukraine war further exacerbated their struggles by causing a massive 66% increase in feed prices, reaching Tk70 per kg.

This double whammy of economic hardship coupled with rising production costs significantly eroded profit margins, leaving many farmers unable to sustain their businesses, said the TBS report.

But Hasina never stopped publicizing the 'development' statistics.

While unveiling her party's election manifesto on 27 December for the last January election, boycotted by the main opposition BNP and others, Hasina even compared the development statistics of her 15 years' rule with that of the last government of BNP in between 2001-2006. 

She needed 10 pages full of data to narrate her "development" stories in the economy, electricity, education, health and overall improvement in the quality of people's lives.   

But she did not say anything about abnormal increases in default loans, money laundering, numerous instances of violation of human rights, deterioration of the rule of law and freedom of the press.

To showcase her regime's muscle for infrastructure developments, she often referred to mega projects such as Padma Bridge and Bangabandhu Tunnel, whose costs saw repeated escalation. Some of her ministers even loved to claim that Bangladesh was set to become Singapore.

Though the outcomes of the 7 January election were determined before the polls in the absence of the main opposition BNP and other parties, Hasina had appealed to voters to vote for her party for the continuation of development spearheaded by her government for the last 15 years.

In the stage-managed election in January this year, she won a landslide again. 

However, she could continue her stay in power for less than seven months in this term as people clearly did not buy her development narrative any more.

After her downfall, BBS, the supreme institution of government statistics, released inflation data for July which saw a jump. Bangladesh's general inflation last month, marked by a quota reform movement leading to blockades and curfews, soared to a record high of 11.66%, according to BBS data released on 12 August.

This is the first time the country's general inflation has reached double digits and is the highest in at least 12 years.

General inflation in the previous month of June was 9.72%, while the previous highest was 9.94% last May. Food inflation in July climbed to a record 14.10%, while non-food inflation reached 9.68%. In comparison, these figures stood at 10.42% and 9.15% respectively in June.

The increase in inflation is partly blamed on unrest caused by the anti-government protest but the most important thing is that the new government did not want to distort the data.  

Created in 1974, merging four different statistics offices under different ministries, BBS has been given the task of having authentic data which is a must for the country's development planning.

However, the integrity of the institution had been undermined by rampant discrepancies in its data during the Hasina regime.     

Economist Luis R Martinez said the findings in his study "are a warning sign for academics, policy-makers and other agents that make regular use of official economic statistics from weak and non-democracies. The increased manipulation of GDP figures that I uncover in weak and non-democracies is not easily anticipated or corrected."

He said the autocracy gradient in the night-lights elasticity of GDP is not explained by variation in publicly available measures of corruption and does not disappear as GDP data gets revised over time. 

Economist Martinez's study has been widely referred to by other economists and academics around the world. 

What needs to be done to prevent data manipulation? Marinez said, "The findings on the IMF's Special Data Dissemination Standard provide preliminary evidence that transparency-promoting policies are effective at preventing manipulation of official statistics."

Shakhawat Liton, Deputy Executive Editor, The Business Standard. Sketch: TBS

[Shakhawat Liton is the deputy executive editor at The Business Standard]