The Misinterpretation: Microfinance, NGOs And Neoliberalism In Bangladesh - Part 4: Two Trends

By Farooque Chowdhury

07 September, 2015
Countercurrents.org

There are steps that strengthen neoliberal approach in Bangladesh. Capital virtually moves unbridled. With unimaginable speed and skill, public enterprises were thrown into virtual loot-market. Years-old “story” says: A setting was constructed to make appear public enterprises unworthy. A part of trade union leadership was usurped by lumpens, a part of media joined them, and they facilitated creating a setting to shut down and sell out public enterprises at prices equivalent to a few pennies. Health and education, two soft areas in public mind, were made areas for private capital’s free ride. Energy sector has also been made a profitable area for private capital.

At the same time, there’s another fact: The selling out of big public enterprises was not carried out in a number of enterprises. The examples can be found in a number of jute and textile mills, in a dockyard, in a machine tools factory, and in a few other enterprises. On an earlier occasion, steps were taken to sell out those. On another occasion, steps have been taken to run these with state ownership, and a number of these enterprises are making profit. The state-run trading arm is being strengthened. Its paid up capital is being increased many fold. Railway network is being expanded, which was once on the way of “pulling up” railway tracks, shorten down state-run railway, lease out railway stations. State-run health care program is being expanded. In agriculture sector, subsidy has been increased. In education sector, millions of text books are distributed free of cost, subsidy being given, and the number of public universities and medical colleges are being increased. These are expansion of public education sector. There are other steps that go opposite to the reform/restructure program, a part of neoliberalism.

Instead of entering into detail it’s just to mention that there are two trends, not the only one as the article NMN mentions to substantiate its claim of “model”. This is neither to condemn one nor to praise and defend another. This is only to request to have an approach for a realistic analysis, for an analysis based on facts, not on imagination or sweeping remarks.

The two trends – pushing with neoliberalism in certain sectors while putting a brake on neoliberalism in others – signify more than one aspect while it does not present the economy as a model of neoliberalism as the article NMN claims. Moreover, it indicates a few fundamental issues related to dominant parts of the society. A proper identification of the issues is necessary for moving forward. Presence of the two trends is significant. It’s not without reason, not without implication.

Why the two trends? Answer to the question should be searched seriously, nor with sweeping remarks as there in the question lie some facts. The reason and implication of the two trends are not only in the economy; politics, factions within dominant interests also have a role there. There are few more important aspects of the two trends, which are related to the people in Bangladesh, and dominant interests’ position to people’s attitude to the issues. Dealings with a model and one-not-model are different. There are functional questions involved.

A few examples of neoliberalism are mentioned by Naomi Klein, in an easier way to understand, in The Shock Doctrine: The Rise of Disaster Capitalism. Neoliberalism experienced by a number of Latin American countries is the model of that arrangement. People while experiencing “therapy” of neoliberalism had to pay for rain water in at least in a country in the continent. Students, their guardians, and public schools in Chile experienced neoliberalism.

Let’s borrow from Naomi Klein:

“In an attempt to relate the history of the ideological crusade that has culminated in the radical privatization of war and disaster, one problem recurs: the ideology is a shape-shifter, forever changing its name and switching identities. Friedman called himself a ‘liberal’, but his U.S. followers, who associated liberals with high taxes and hippies, tended to identify as ‘conservatives’, ‘classical economists’, ‘free marketers’, and later, as believers in ‘Reganomics’ or ‘laissez-faire’. In most of the world, their orthodoxy is known as ‘neoliberalism’, but it is often called ‘free trade’ …” (The Shock Doctrine)

To be a model, a system or an arrangement has to run with full throttle along its planned path, take a full shape, and should stand as imitable to the same path followers. A model, as dictionaries and other references say, is a standard or example for imitation or comparison or a representation or a composition of concepts or an image to be reproduced or a theoretical construct representing processes or a simplification of a situation for further systematic study or replica. Elaborate definitions are abounding.

The fancy name “neoliberalism” lives with wide and deep cuts in social spending, privatization, deregulation, complete free trade, downsized government. Is it possible to consider neoliberalism being implemented in Bangladesh as a standard or an example, etc. to be a model while a part of the economy, as briefly mentioned above, goes with public sector, widens it in a few areas? The reality has to be correctly identified.

Moreover, neoliberalism should be spelled out clearly. “[N]eo-liberalism”, writes Prabhat Patnaik, “is not a separate detachable thing from contemporary capitalism. It is contemporary capitalism, a manifestation of this contemporary capitalism, characterized as it is by the hegemony of globalised, i.e., international, finance capital.” (“Misconceptions about Neo-Liberalism”, People’s Democracy, May 17, 2015, vol. XXXIX, No. 19, emphasis in the original) The Bangladesh-story, not a model, bears an old contradiction that the status quo fails to dissolve, and thus produces rationale for following a new path.

The article NMN mentions: “Rural branches of state-owned banks have closed down, squeezing the access to cheaper finance for rural people, and forcing them to go to microcredit, which has higher interest rates.” The analysis is over-simplification. Even, before doing the analysis, it presents distorted information.

First, the information: Bank operation among the peasants is being expanded. Even, it’s also being expanded among school-students, among scavengers in at least in a Bangladesh city.

The article NMN probably forgets MC/MF expanded when there were rural branches of state-run banks. Related data, number of branches, expansion of MC/MF, source of MC/MF, etc., show the fact. There were branches, but there was no MC/MF extended by the banks. But, banks are now initiating MC/MF with different “strokes”. The rural poor once used to take loan mainly from money lenders, not from banks, even before closing down of rural branches of state-owned banks. More than one study found this long ago. The article NMN’s observation is not factual.

State

The article NMN says “The state has taken the backseat.”

Does reality support this claim? Who leads/manages/arbitrates/goes into action/assaults while state take backseat? Is it possible to, as the article says, “bash the workers”, “undermine the power of organized labor and permit capitalists to make easy profits”, impose “the World Bank-IMF reform trap”, and carry the following tasks, as mentioned in the article – “fiscal discipline, reordering of public expenditure priorities, tax reform, liberalizing interest rates, competitive exchange rates, freeing up trade and foreign direct investment, privatization, and deregulation”, etc. – with state on backseat? Is it possible to water the garden of Fz without state? Can state’s role in the bailout business in countries be forgotten? Isn’t state required for a shock therapy, and for waging the War on Terror? Isn’t state required for regime change, with no-fly zones and bombs, or peacefully, as a few European countries experienced? The regime change was required in the interest of bankers. What Greece has experienced over the last few years and is now experiencing? Isn’t it ultimately states’ power that imposed bankers’ “good wishes” on Greece? Who, on behalf of capital, imposes and implements austerity measures in countries? Have not states increasingly got engaged into espionage in the interest of corporations, and in trade negotiations? What do recent revelations say?

With increasing power of the WB-IMF-WTO, a group of theoreticians began finding out something called “supranational state”. Another group began telling: States are no longer important. “Such views, however, have little basis.” (Foster and Magdoff, op. cit.)

Who does take the front seat – take the lead if state takes backseat? Is it a failure to perceive state or an effort to create confusion? The author of the said article should be aware of implication of such “backseat theory”.

The general trend, irrespective of countries and societies, is: Capital is strengthening state. Even, multinational military and banking operations show the reality of strengthening of state machine. The article’s claim is a dangerously wrong observation, which can take to dangerous wrong conclusion/program.

A few more issues including the so-called War on Terror mentioned in the article are not discussed here as the articles major issues have been examined. Moreover, that will further lengthening this dissenting response.

There were persons concerned with plight of peasantry brutally forced to engage with indigo plantation in Bengal during the British colonial rule. The tortured Bengal peasantry found a part of Baangaalee middle class and a few zemindars as ally in making their lot known to wider world. There were Dinabandhu Mitra, Harish Chandra, Michael Madhusudan Dutta and Kaliprasanna Singha. Neel Darpan, Mirror of Indigo, a vernacular drama, and The Hindu Patriot described the peasantry’s plight. Reverend James Long, a missionary, was fined and imprisoned. Here in today’s Bangladesh, journalists occasionally report the MC/MF debtors’ quandary. But now, it’s not possible to find out a single character in any Baanglaa novel or drama that tells plight of MC/MF debtors. There’s no MC Mirror. Even a persistently serious effort to raise the issue by the progressive political forces is difficult to find out. It’s a strange silence! On the contrary, there are created confusion and general comments. Satirical comments targeting MC/MF critiques are also made. The MC/MF debtors’ plight ultimately goes dumb. This cruel “civility” increases manifold as the MC/MF, and its debtors’ condition are not analyzed/discussed following a scientific approach, are “enriched” with superficial analysis. Shall history miss to note this failure, a reflection of “enlightenment”?

At the conclusion of this response it should be re-stated:

A wrong analysis leads to wrong slogan with wrong program, wrong method of work, and identify wrong allies and adversaries. The issues of MC/MF should not be ignored, and should not be wrongly analyzed as millions of poor are now entrapped into it. There are questions related to their survival, appropriation of their labor, and, in countries like Bangladesh, to socio-economic advancement. The NGO-issue is also important as it’s related to people’s political struggle. An effort on the part of the NGO camp is going on for long to encroach the political space people’s politics creates. This makes the struggle more important. This demands a proper analysis of the issue. The question of state is no less important, and there’s no scope for making misinterpretation.

The author of the article NMN, Professor Anu Muhammad, deserves thanks for his efforts to discuss the issues as it has created a scope to focus on these.

Read Part I , Part II & Part III

[Farooque Chowdhury is Dhaka-based freelancer.]

This 4-part-essay, originally composed in March-April 2015 and was shorter than the present version, is modified subsequently over the following months after it failed to find the place appropriate for the differing opinion. To have the appropriate place, the original article was once shortened to a few hundred words which formed just a few statements. However, the place was not available.]