Reflections on M. Fouzul Kabir Khan’s latest book A journey through ‘Bangladesh’s Political Economy’

In the intellectual circles of Bangladesh, M. Fouzul Kabir Khan, averse to the "Dr." prefix even though he is one in economics, stands out not only as a distinguished member of the council of advisers but also as a keen observer of the nation's economic and political pulse. 

Recently, he has unveiled a collection of his thoughtfully composed articles—many of which originally graced the pages of the revered Prothom Alo—under the title "Bangladesher Rajnoitic Orthoniti (Bangladesh's Political Economy)". This book, in essence, resembles a sumptuous banquet: an array of rich, accessible reflections that invite readers to savour and contemplate, at whatever pace they please. 

Fouzul's compass

Fouzul offers a tapestry of reflections, weaving together insights on an array of issues that gripped public attention during the writing of these pieces—ranging from inflation, boycotts, banking quandaries, and the global economic pulse, to the fortunes of India and Pakistan, the personal resonance of Sandwip, onion price surges, and a series of essays devoted to the renewable energy sector, which is especially dear to him. 

This is not a linear expedition, but rather a collection where the reader can pause at any station, secure in the knowledge that each return to the book presents a fresh departure—a new train of thought, embarking on a distinct journey. 

The heart of the book lies in its exploration of economics as it is uniquely practiced in Bangladesh. Rather than simply rehashing textbook definitions, Fouzul delves into the complexities of "onorthoniti," a Bengali term that resists direct translation but encapsulates the notion of economic malpractice. With analytical clarity, he examines the landscape of economic practice—tracing its contours through legal frameworks, social structures, competition, public goods, justice, externalities, and stability. 

The interplay between economists and politicians is central; as Keynes famously observed, "The world is ruled by little else." Fouzul adds his own wry note: "economics is like a deceived lover, vindictive." It is a discipline fraught with intrigue and consequence.

Right, left and the invisible

As one progresses through the book, fresh perspectives unfold. Fouzul uses a thought inspiring metaphor: the left hand, the right hand, and a third, elusive hand—pretext—often wielded to sidestep accountability. In this schema, the right hand is rendered impotent, unable to counteract the misdeeds of the left. Fouzul's illustrative examples—drawn from Bangladesh's world cup cricket, inflationary trends, foreign reserves, banking rates, and the theatre of politics—reveal a persistent culture of impunity.

The "third hand" is not to be confused with Adam Smith's celebrated Invisible Hand. Unlike its more benign ancestor, this hand of pretext neither advances society inadvertently nor acts for the common good. On the contrary, it is a formidable obstacle blocking progress at both micro and macro levels.

One might extend the metaphor of left, right, and pretext into a concept we may aptly dub "three-handed economics." The late US President Harry Truman, who famously longed for a one-handed economist, would be grateful not to have confronted the kind who not only hedge their bets but also deflect responsibility when their counsel falters—always armed with an excuse.

Fouzul calls for a stronger embrace of the "dan hat" (right hand), a symbol of rectitude, contrasting it with the left hand, which he casts as mischievous. In Bangladesh's economic and political arenas, there is a prevailing inclination to invoke the invisible "third hand"—the hand of pretext—to rationalise mischief and sideline the virtues of the right.

The policy dilemmas

This dynamic manifests differently across contexts. There are scenarios in which both the left and right hands can contribute meaningfully to society, provided their actions are thoughtfully synchronised by those tasked with wielding them. Yet, the real-world actors often differ sharply in their judgments about how best to deploy these hands. It is frequently the elusive third hand—pretext—that tips the balance in decisive policy debates.

Fouzul highlights this phenomenon in the government's response to Covid-19, where the choice lay between financial assistance and policy reforms. He cautions against the pitfalls of an overreliance on direct financial support for businesses, urging instead that attention be paid to correcting underlying policy distortions.

The meaning of "policy support" has since morphed, now encompassing an array of interventions directly affecting business cash flows: tax concessions, rate cuts, loan restructuring, and cash subsidies. Initiatives aimed at expediting export deliveries, speeding up access to utilities, or expanding digital bandwidth are relegated to the realm of "structural reforms." 

Policy support is championed by the business community, who offer enthusiastic verbal endorsements of structural reform, even as they consistently opt for immediate policy tweaks on the pretext that genuine reforms are perpetually out of reach.

A key takeaway

In a compendium so varied, certain essays naturally rise to prominence. For me, the most striking is the account in which Fouzul recounts his firsthand experiences with the structural reforms that reshaped Bangladesh's economic trajectory under the stewardship of Finance Minister M. Saifur Rahman in the early 1990s. The piece stands out as an illuminating case study—revealing the curious role of chance, meticulous attention to detail, and the influence of individual personalities in catalysing change.

It is in the subtle, seemingly minor gestures that profound consequences germinate. Fouzul's narrative highlights this truth: Dr. Masihur Rahman's query about Fouzul's silence on the marginal income tax rate prompted a response whose detail ultimately reversed Minister Saifur Rahman's initial decision. 

What might have been a simple dismissal instead became an invitation for the World Bank to return and negotiate the Public Resource Management Adjustment Credit. One cannot help but speculate whether events would have unfolded as they did had Fouzul not been present. The hand of history, after all, often moves at the behest of serendipity.

Work in progress?

Looking ahead, Matiur Rahman, Editor of the Prothom Alo, has already placed an advance—if as yet unfunded—reservation for Fouzul's forthcoming memoir on his tenure as a member of the interim government and his stewardship of three ministries, each "large" in more ways than one. Readers and admirers alike can only hope he will take up the challenge and continue to chronicle the unpredictable and intricate dance of policy and circumstance.