Ramadan brings first major test for Bangladesh's incoming PM

When he came back home on 25 December ending 17 years' exile in London, his return was considered as a make-or-break moment for his political career and his party as well.

Tarique Rahman was then acting chairman of the BNP. He succeeded the helm of the party after a week following the death of his mother Khaleda Zia, first female prime minister of Bangladesh who propelled BNP to power thrice.

Tarique embarked on the mission to bring back his party in power after two decades. He succeeded in his mission leading his party to emerge with two-thirds majority in Thursday's battle of ballots. He won the crown. People gave him a strong mandate to deliver on his pledges.

Now is the time for him to deliver on people's skyrocketing expectations in an extraordinary political and economic condition, which, economist Zahid Hussain says, looks "unusually stable, but unusually fragile".

Tarique Rahman, who is swearing in as prime minister and forming his cabinet this afternoon may not have a honeymoon period as the month of Ramadan that begins tomorrow or the day after comes with a first, but major, test for the new government.

Even before he assumes the office, the price of Ramadan essentials is on the rise. And many fear the price will rise further in the time of persistent high inflation which returned to the rising trends before the polls.

The new government does not have time to go for new imports. But it can take some game-changing measures.

Imports of key Ramadan commodities have increased this year compared to the previous one. But the market is not behaving based on the supply of the commodities. There are some other factors that make the market play foul.

Economists have been saying for months that falling international commodity prices have not translated into lower domestic prices due mainly to transport costs, logistics, middlemen, extortion, and other supply-chain inefficiencies. There is another major player known as "syndicate".

Ramadan, therefore, comes as a make-or-break moment for the new government. If it can restore law and order and stabilise the essentials market by curbing extortion and controlling the syndicate, people will breathe a sigh of relief.

This will increase people's confidence in the government. And the government will gain strength to move fast with the reform agenda, said experts.

People have already started expecting that the prices of essentials will go down as the new government pledges to curb extortion and ensure a smooth supply chain. The market governance must be improved.

Some more things need to be taken care of. Smooth supply of electricity and gas for household cooking, particularly during iftar and sehri hours.

The summer is coming as a major challenge, too. Farmers will seek uninterrupted supply of power during Boro season.

The bureaucracy needs to be dynamic from the first day of the government.

Therefore, before mega reforms like constitutional amendments and other reforms, the Ramadan test looks bigger than others.

Big mandate, bigger task ahead

After two decades, the BNP has returned to power. It is now a once-in-a-generation opportunity for Tarique, who steered the party to a sweeping election victory within a month and a half of taking charge, to transform the country. Though an MP for the first time, Tarique had long served as the party's principal strategist – even during his long 17-year exile in London – and well-positioned to handpick the best choices to assemble his team suited to run the government over the next five years.

The interim government had inherited a battered economy from the ousted Awami League regime – marked by fragile banks, dwindling foreign exchange reserves, exchange rate volatility, widespread corruption and money laundering, and soaring inflation. The newly elected government takes charge of an economy that is more stabilised but burdened by stagnant investment, still high inflation, and weak employment and deteriorated public security.

The task ahead is uphill. With a decisive mandate, Tarique will now face high expectations of systemic transformation – across policing, banking, bureaucracy, politics, and diplomacy.

Armed with a two-thirds supermajority – 212 seats and nearly half the popular votes – Tarique now has the backing and political space to make hard policy choices.

If the proposed upper house takes shape under the July Charter framework, the ruling party is also expected to enjoy an advantage there, further consolidating its legislative strength.

"The same authority can entrench accountability or enable renewed dominance," economist Zahid Hussain writes in an article for The Business Standard.

As the new government begins its journey, it will have to ensure smooth supply of essentials during Ramadan and free the supply chain from notorious market cartels and extortionists. The outgoing interim government claims there were enough imports of essential commodities – nearly double the volumes imported during the same period last year – to meet Ramadan demands. Revenue data shows 14 lakh tonnes of wheat, 2.25 lakh tonnes of onion, 3.70 lakh tonnes of sugar, 4 lakh tonnes of soyabean oil and 47,000 tonnes of dates were imported during the last four months – more than Ramadan demands.

Besides, import of chickpea – most consumed during iftar – alone exceeds demand by 28%.

Import duties were slashed to facilitate more imports and keep prices stable. But prices have already started surging – a common scenario during Ramadan due to an act of market cartel, supply manipulation and extortions.

A senior commerce ministry official told TBS yesterday that the interim government took steps beforehand to ensure smooth supply of Ramadan essentials, assuming that the new government would not have time to prepare before the month of fasting sets in. Now strong market monitoring and stringent measures against extortion and supply disruptions are needed to make Ramadan commodities available and check price hikes, the official suggested.

Across the world, commodity prices come down during festivals when sales surge. But it is quite the opposite in Bangladesh, where prices jump during festivals, no matter if there are enough supplies both from local production and imports. Why?

"It is because of the syndicated market which is at play ahead of Ramadan. It is said we have enough imports. Still, prices surge which I must say is a governance failure in the market system," says Fazlul Hoque, a leading exporter and a business leader. A political government with a huge mandate has the scope to check supply distortion caused by extortions or any sort of disruptions in the supply chain of essential commodities, and check if anyone is making undue profit.

"It can be tackled successfully if political mechanisms can work closely with the government's mechanism," he said.

Managing the Ramadan market is not a trivial task for just a month, it will be a building block for future bold reforms and actions against corruption and misgovernance, analysts said.

"The law and order situation dipped so low – which must not be allowed to continue. Another thing is extortion – the new government in its first hours must make efforts to end this evil. This, just at the very beginning, will give a strong signal which is crucial," says KAS Murshid, former director general of Bangladesh Institute of Development Studies (BIDS).

He refers to the country's chronic weakness in implementing reforms. "In Vietnam, they prepare a five-page report and make, say, three recommendations. And they implement those. We prepare a 500-page report and list 200 recommendations, but implement none."

Murshid stresses the need for a "result-oriented delivery mechanism" to implement the reform agenda. "Let's look at delivery, let's look at results, no matter you raise salaries four times, five times or even ten times," the economist says, suggesting that those who fail to deliver results must be shown the door.

M Humayun Kabir, a political analyst and a former diplomat suggests that youths will continue to influence Bangladesh's politics for the next few decades.

He believes a 77-seat strong opposition can make parliament an effective centre of parliamentary democracy and guide the governance and politics of future.

"If differences are resolved through discussions and cooperation in parliament, then BNP will benefit politically. It'll give the government additional strength as well," Humayun Kabir told TBS talk show "New Parliament, New Government" aired today.

The new government, he believes, will pave the way for normalising relationships with neighbouring India with dignity, keeping in view the issues such as renewing the Ganges treaty, Teesta water-sharing, push-in and border killings. "Bangladesh needs to have a working relationship with India," he said, hoping that it would be based on Tarique's declared "Bangladesh first" policy.

The tariff deal recently signed with the USA has components that may impact relations with other countries such as China, which is a key source of raw materials not alone for Bangladesh, but for the whole world including even America, the former diplomat points out. Bangladesh must have engagement with the rest of the world – China, India, the USA, the EU as well as global institutions like the IMF, World Bank, the ADB.

"For an integrated economic diplomacy, as envisaged in BNP's election manifesto, there must be effective coordination among foreign, commerce and finance ministries and institutions like the NBR, Bida," Humayun Kabir says.

Human capital is another issue that needs immediate attention. "Our 13 million people work abroad. They work hard, but earn less as most of them are low-skilled. Here responsibility goes to the education system and other relevant departments."

With thumping victory and decisive mandate, Tarique has the strength to accelerate the country's transformation and unleash the power of people, a historic opportunity he must not squander, analysts say.