We have created a class which consists of economic monsters who persistently oppose much-coveted redistributive justice – afraid they will lose their wealth and power
Governance is expected to be effective, efficient and transparent. However, as that is not the case, we must differentiate between good and bad governance.
A few days ago, I obtained several documents to determine views on good and bad governance. Most of the writers depicted governance from an academic perspective – but unfortunately, in a superficial and grandiose manner. It reminded me of Nobel laureate Abhijit Banerjee's comment, "Talking about the problems of the world without talking about some accessible solutions is the way to paralysis rather than progress." Banerjee is right.
For issues of governance, we often employ impressive words such as: accountability, participation, the rule of law, transparency, responsiveness, consensus-oriented, equity and inclusiveness, effectiveness and efficiency, etc. However, we often fail to articulate how these elements can be realised.
Things like institutional reform, political accountability, administrative responsiveness, effective bureaucracy, redistributive justice, and tax compliance are nothing but an encyclopaedic wish list; the practical implementation of which remains mostly invisible.
To resolve bad governance, we must know how it manifests, what its outcomes are, and how to address it.
Before going into the practical measures of handling bad governance, let me first talk about the stark difference between good and a bad governance.
In an article titled Global Economic Inequality, Oxford scholar and economist Max Roser compared Somalia's and Iceland's child mortality rates – which are 127 out of 1000 and two out of 1000, respectively. The writer stopped at blaming bad governance in Somalia for the high infant mortality rate. But, how is bad governance responsible in this case?
The governance index – the quality of governance – places Somalia at 2.3 out of 10, whereas Iceland is at 8.2 out of 10. This clearly indicates Somalia's bad governance. The country invests only 1.3 percent of GDP on education, whereas Iceland invests 5.6 percent to this end. The enrolment rate at primary schools is 30 percent in Somalia, whereas it is 100 per cent in Iceland.
Furthermore, the employment rate in Somalia is 33 percent, while it is 92 percent in Iceland. The per capita income of Somalia is only $300, while it is $52,000 in Iceland. On the Human Development Index, Somalia is below 190 and Iceland is 6th among 195 countries.
At the end of the day, Somalia's: education performance is very low, health condition is starkly poor, poverty is abject, basic services are appalling, corruption is rampant, social strife is high, legal system is ineffective, and so on.
Following the same approach, I looked at Bangladesh. The data I gathered speaks for itself.
Our corruption ranking is 146th from the bottom; our corruption is denoted as endemic. Bangladesh scored 26 out of 100 on the Corruption Perception Index in 2019, whereas Denmark and New Zealand topped the list with a score of 87. Of South Asian countries, Bhutan scored 68 and ranked 25th.
On the 2018 governance index, Bangladesh's average score is 2.1 out of 10. The global highest is Denmark's 9.4.
In terms of inequality, disparity, Bangladesh's Gini coefficient is 0.48 in income and 0.74 in wealth as per the 2016 Household Income and Expenditure Survey.
The upper 10 percent – economic elites – control at least 45 percent of total national income. Meanwhile, the bottom 10 percent, the poor, have access to only 1.1 percent of the total national income. In terms of least inequality, Denmark is first in the world with a Gini coefficient of 0.25, whereas Bangladesh's rank is 148 among 159 countries. Bangladesh's Human Development Index is 135 out of 189 countries.
We boast about securing a GDP of $300 billion – predicted to be $700 billion in 2030. But look at our allocation for the fiscal budget – it is only $60 billion.
Why is this so? Normally, against our GDP, our budget should be at least $100 billion. The leading economists of the country recommend at least $110 billion. If we do not allocate more for our budget how can we bring about the desired changes to our service delivery?
In Bangladesh's last fiscal year, 2.1 percent of GDP was invested in education – against a standard of at least five percent. In Europe and Scandinavia, it is six to seven percent of GDP.
The health sector receives even less than one percent of GDP. More specifically it is only 0.89 percent – Tk25,732 crore for 16 crore people. Meanwhile, Tk32,558 crore has been allocated for defence – yet there are only two lakh military personnel! The World Health Organization recommends five to six per cent of GDP be allocated to health.
For social security in the last fiscal year, Bangladesh's government allocated Tk74,367 crore– only 2.6 percent of GDP. Surprisingly, this amount contains pensions for all government retired employees, the freedom fighters' allowance and many rural infrastructure development projects. Eventually, it amounts to only Tk40,864.74 crore for more than 1.3 crore poor and vulnerable people. Notably, in Scandinavian and European countries, the range of social protection is 12-19 per cent of GDP.
Against the 85-95 percent employment rate in developed countries, ours is only 57 percent – with bad governance restricting both investment and employment from growing.
Simply said, Bangladesh's governance is bad. Given the fact that our institutional corruption is so deep-rooted and our economic elites are so strong, improving performance is often hard.
We have created a class which consists of economic monsters who persistently oppose much-coveted redistributive justice – afraid they will lose their wealth and power. It is a vehement force supported by institutional structures, so our efforts for institutional reform will not be easy.
Instead, I recommend we explore going the other way around, bit-by-bit. Let us devise a plan that will address the manifestations – outcomes – of bad governance.
At the moment, let us work for: a fight for $110b budget; five percent of GDP for quality education; four percent of GDP for health facilities; at least six to seven percent of GDP for social protection; and progressive tax compliance for at least 10 million of the taxable population.
If we can create a section of highly-performing, educated, healthy and qualified citizens, then hopefully they will drive themselves to challenge bad governance – resulting in gradual changes to the governance of this country.
The author is development worker