Monday, April 18, 2011

Is Robert Blake's Warning And Aminis Hartal Mere Coincidence?

What could have had gone so wrong that only two years into the incumbency, the government is drawing flaks from the Western allies? At least, Robert O. Blake's repeated warning of dire consequences on bilateral relationship between Washington and Dhaka and international media blitz against the government for ousting Yunus from the helm of Grameen Bank seem to clearly indicate foreign displeasure. However, it would be na├»ve to think foreign displeasure as reaction only to the government's sacking of Professor Yunus. Whether Blake's warning, international media blitz, and Fazlul Haque Amini's violent enforcement of hartal against the Women Development Policy are symptoms of a coordinated effort to destabilise the government or a mere coincidence, remain to be seen. Blake's warning, apparently catered to the demand of special interest groups rather than intending to resolve conflicts, risks energising religious extremists and alienating the progressive forces in Bangladesh. One aspect of the recent turn of events is that it bears strange resemblance to those during 1972-75 period, but with different twist. As one turns the pages of history on the foreign interventions during 1971-75 , one would find that frequent foreign interventions, insurgency, and severe economic and political crises during post-war period did not only add to the sufferings of the people of a country, already torn by the war of 1971 , devastated by massive flood of 1974 , and ravaged by the famine of 1974 ; it also led to the brutal killing of the father of the nation. Afterward came the 15 years of military rule with concomitant rise of religious extremism. The post- independence interventions could hardly be deemed as beneficial for Bangladesh. In 1971 , Bangladesh became the causality of cold war politics when Pakistani regime, with blessing from the Nixon administration, perpetrated one of the worst massacres in the modern history. Two subsequent cases of intervention during 1972-75 , by the donors and the World Bank indicate how cold war politics got prioritised over humanitarian crisis [description here largely draws on personal accounts of Professor Nurul Islam in Making of a Nation, Bangladesh: an Economist's Tale ( 2003) [1 ] and on Aid and Influence… by Just Faaland (1981)]. [2 ] In the first case, donor countries and the World Bank unduly pressurised Bangladesh to accept the debt liabilities of Pakistan, which accrued before December 1971. In the second case, the Nixon administration used food aid as a weapon to punish a government viewed as aligned too much with the Soviet bloc. Donors' pressure on Bangladesh in accepting debt liabilities accrued before December 1971 The issue of sharing of assets and debt liabilities was first raised by the World Bank when Bangladesh applied for Bank's membership in 1972.   Later, three bilateral donors, the United States, Germany, and France also joined the fray. Donors heavily pressed Bangladesh to resolve the debt liabilities of Pakistan while bypassing the issue of sharing of assets. Amid donors' pressure, government countered with three arguments: (1) since Pakistan was yet (in 1972) to recognise Bangladesh as an independent country, Bangladesh was under no obligation to discuss the issue of sharing external debt with Pakistan; (2) when Pakistan recognised sovereignty of Bangladesh, only then the issue could be discussed in a broader context of sharing of both external liabilities and assets created by such liabilities; (3) the resources that was transferred to Pakistan on a net basis during the pre-1971 period would also be offset against the flow of foreign assistance during the same period. Until then, the burden of external debt would solely be the responsibility of Pakistan. Even, the international legal experts, when consulted by the government, assured Bangladesh of having no obligation of sharing external debt the accumulated prior to December 1971. ( Islam, p. 290) In response, donors and the World Bank stressed that as quoted in Islam (p. 291) "the introduction of such factors as flow of resources or transfer of assets between the two parts of Pakistan before 1971 would be regarded by them ( donors and Bank) as "extraneous factors." Donors warned that any delaying or jeopardising of the negotiation of the debt settlement caused by bringing up "extraneous factors" would be termed as " unreasonable attitude" of the country, specifically referring to Bangladesh.  Concerning donors' attitude, Islam (p. 291) argues that "The creditors, by delinking the two issues, were, in fact, doing a great favour to Pakistan by letting off the latter from an obligation to negotiate with Bangladesh." Eager to start the process of economic recovery, Bangladesh eventually had to accept limited liability on debt as condition to reactivate projects inherited from Pakistan period. The issue of asset sharing is yet to be resolved and Pakistan still owes Bangladesh an estimated $5.5 billion measured in 1971-72 prices. The politics of food: invoking US PL-480 amid severe food crisis During 1973-74 , Bangladesh plunged into severe political- economic crisis. The massive floods in July-August, 1974 , which destroyed the jute crop, the country's most dominant source of export earnings, and interrupted the Aman production, made the matter even worse. Amidst the crisis, in August 1973 , government requested the USAID for 300 ,000 tons (later scaled down to 220 ,000 tons) of food assistance for the fiscal year 1973-74. The negotiation dragged on for seven months and, then, hit a snag when, on March 27 , 1971 ,  the US government, invoking a provision of the US PL 480 , informed Bangladesh that it could not provide the food aid as Bangladesh was having an on-going trade relation with CUBA! Under the provision, country having trade relation with Cuba would be prohibited to receive US food aid. The government argued that since it had not been aware of this provision prior to entering a trading relationship with Cuba and exceptions had been to Argentina and Brazil while they had also been having active trade relation with Cuba, exceptions should also be made for Bangladesh. The arguments were ignored. Instead, the government was notified that, if Bangladesh were to receive stipulated food aid, it either obtains an assurance from the US president certifying that such trade would be to the national interests of the United States or sever trade tie with Cuba. Given the widely known detest of the Nixon administration against Bangladesh and its founding father, the first option was deemed infeasible. Thus, the government opted for the next option. A written assurance from the government showing that it had severed trade tie with Cuba was provided to the US government in July 1974. However, the lawyers at the State Department determined that since the jute bags were yet to be shipped out of the port, Bangladesh would be still considered as "currently trading with Cuba". Thus, the government had to ensure that all the jute bags shipped out of the country to ensure the receipt of food aid. By the time (in December), food aid reached Bangladesh in December, 1974 , the worst spell of the famine of August-September 1974 was already over. Perhaps, the wrath of famine could have been alleviated somewhat had the food aid not been used as a tool to make a government unpopular, thus hastening its violent departure. The past interventions show that foreign pressures tend to increase with (1) growing domestic political polarisation, (2) incumbent's loss of political capital, (3) increasing foreign dependency, and (4) failure of the government to comply with the interest of the intervening country. Geo-politics also played significant role in the past intervention. The questions remain, why Pakistan, one of the largest recipients of US external aid, an extremely polarised nation, and with an unpopular incumbent, has been more successful in subverting foreign interference? Are members of interest groups in Bangladesh easy to be manipulated by foreign interests than those in Pakistan? One should note that inviting foreign intervention for group interests would be like "cutting nose to spite own face." Unfortunately, that appears to have been the convenient strategy of the feuding groups in Bangladesh.