2017 – The shape of a year

Courier Briefing
Thursday, December 28th, 2017


Any narrative that wishes to capture the year 2017 in Bangladesh must contend with the enormous distortionary effect of the Rohingya refugee crisis, that only started in late August, but quickly grew to become the biggest story to emerge out of the country this calendar year.


It even drew the Economist to consider Bangladesh a contender for its Country of the Year, a newish innovation at the prestigious London-based publication, evaluated by its staff and announced through a 1-page article. Considering Bangladesh’s display of benevolence towards the persecuted Rohingya, its rapid economic growth and a sharp fall in poverty rates – the magazine found those to be major reasons for the country’s top contention, alongside Argentina, South Korea and France.


However, the Economist did not eventually select Bangladesh, saying, “Had it not crushed civil liberties and allowed Islamists free rein to intimidate, it might have won.”


All said and done, sporadic attacks by militants, counterterrorism raids on their dens, the Supreme Court’s verdict on the 16th amendment to the constitution (and the real bombshells that came with the verdict’s observations), the shake-ups to go with the shake-outs in the financial sector, incredibly impactful flashfloods and their frightening consequences, prices racing out of control for key, essential items, the contradictory fortunes of a potent sector of the economy (tanneries, or leather) – these were all emblematic of a country being pushed and pulled in a number of directions by all sorts of forces, none more so than the unyielding forces of modernity also known as social networks.


Dhaka Courier set out to highlight those issues and recap the events which shaped the year that was 2017 (and may well continue to do so in 2018.)


A storm in the judiciary


On July 3rd the seven-member bench of the Supreme Court unanimously voted to strip parliament of its powers to impeach the apex court’s judges. The 16th amendment to the constitution, passed in 2014, empowered members of parliament (MPs) to impeach Supreme Court judges on the grounds of incapacity or misconduct. In 2016 the High Court declared the 16th amendment to be illegal, a verdict that has now been upheld by the appellate division of the Supreme Court.


In 2016 the High Court, while delivering its verdict, outlined the importance of the separation of the judiciary from the legislature for an efficient legal system. But only recently the government filed a petition with the Supreme Court seeking review of its judgement that scrapped the 16th amendment to the constitution, which had empowered the parliament to remove its judges for incapacity and misbehavior. So a lot remains to be seen in 2018 about how independently judiciary operates in this country.


Justice Surendra Kumar Sinha, the last Chief Justice, became entangled with the government over the delicate issue of judicial independence, when things took a turn for the worse as he had a reportedly heated-exchange with Attorney General Mahbubey Alam during a hearing on the appeal against the High Court verdict that scrapped the 16th amendment of the constitution.


Publication on Aug. 1 of a full text of the judgment caused further uproar. Observations contained in the judgment branded the country’s parliamentary democracy as “dysfunctional” and described parliamentarians as “immature.” Referring to Bangladesh’s independence from Pakistan in 1971, the judgment noted that no nation should be ruled by only one person. Ruling party leaders and pro-government activists accused Sinha of ridiculing the present parliament.


The “smearing campaign” followed, resulting in Sinha being forced to go on a month’s overseas leave in November. While away, he was charged with money laundering and other corruption charges as well as “moral turpitude.” Some other Supreme Court judges apparently let it be known that they would no longer sit with him on a bench of the court. President Abdul Hamid later accepted the resignation letter of the Chief Justice SK Sinha on November 13, an incident without precedent in independent Bangladesh, although in line with some of the threats issued against him in the preceding weeks.


Exodus from Rakhine


The carnage in the Rakhine state forced over 655,000 Rohingya Muslims to leave their homeland and take refuge in Bangladesh. Several thousand people were killed in this “ethnic cleansing” took place on our backyard, women were raped and children were made orphans. The contingent primarily consists of the elderly, women and children – as men are left behind to fend for themselves till they can come over to Bangladesh, or in most cases, have already been killed or left for dead, as per the statements given by their loved ones to the media.


After facing international outrage and charges of ethnic cleansing, Myanmar made a pledge: Rohingya Muslims who fled the country by the hundreds of thousands would start their journey back home within weeks. With so many obstacles, however, and no real sign of good will, few believe that will happen.


The returns are supposed to be voluntary. But many members of the religious minority, now living in sprawling refugee camps in neighboring Bangladesh, are afraid to go back. They don’t trust the nationalist-led government and feel widely hated by the general population. Meanwhile, the military — which violently ousted them — says the refugees shouldn’t expect to return in large numbers.


In an apparent effort to quiet criticism, Myanmar reached an agreement with Bangladesh last month saying refugees would start returning home before Jan. 23. While Myanmar said the Rohingya would be allowed to settle in their original homes, few of which remain standing, some officials have talked about putting them in “camps” in northern Rakhine. Already, two barracks have been constructed next to a police post in the Rakhine state village of Taungpyo Letwe to receive returnees, the Ministry of Information says. The government has stockpiled material and started breaking ground for 41 modular houses. The idea, the ministry said, is that returnees can stay there temporarily.


Myanmar’s agreement with Bangladesh says Rohingya will need to provide evidence of their residency — something many say they do not have. While the agreement says that the UN High Commission for Refugees (UNHCR) will play a role in the repatriations, Adrian Edwards, a spokesman in Geneva, said they have so far been excluded from initial discussions between Myanmar and Bangladesh. Bangladesh wants them to be involved, sources say. Myanmar does not.


Mixed signals in a growth economy


Bangladesh economy is growing at a steady pace registering a growth rate of 7.24 percent in FY 2016-2017, up from 7.11 percent in the preceding year, according to the government’s accountants. The growth figure was announced ceremonially by Planning Minister Mostafa Kamal to the prime minister, and then to the kind of fanfare readily available at political party events. The robust growth of the economy in their books has been possible due mainly to the remarkable contributions of the agriculture, manufacturing and service sectors. The three broadest sectors of the economy registered growth at 3.4, 10.5 and 6.5 percent respectively.


The rate of inflation in Bangladesh is satisfactory due to adequate supply of the products and services in the consumer market. The target has been fixed for the current fiscal year at 5.5 percent as per monetary policy statement of Bangladesh Bank.


The biggest surprise may well have been the sluggish, almost pedestrian growth in exports of just 1.69 percent in FY 2016-17 , down steeply from the 9.77 percent growth in the 2015-16 fiscal, and almost 9 percent the year before.  Indeed, it was the slowest growth in the sector for 15 years.


Import registered 11.25 percent growth in FY 2016-17. Total import in FY 2016-17 was $43.5 billion was $43.05 billion and $40.70 billion in FY 2016-17.


Nearly 10 million Bangladeshis work abroad and they send their hard-earned foreign currency, remittances, to their family which we see dropped below $12 billion in FY 2016-17. While the decrease in export growth was at least growth, here we are confronted by a decline in absolute terms – a decrease in real terms. Not only was the number lower than the previous fiscal’s $13.6 billion – they were the lowest in six years.  Fragile economic conditions in the Middle Eastern nations, Brexit (though it only takes effect starting in 2019) and the price of oil have all been proposed as the likeliest reasons for these twin blows to the country’s forex reserve.


The rate of domestic savings and national savings in Bangladesh are 26.06 percent and 30.30 percent of GDP in FY 2016-2017 which was 24.98 percent and 30.77 percent respectively in the preceding year. The rate of savings in relation to GDP increased 1.08 % in the FY 2016-2017. It would have been higher if the rate of inward remittance inflow had increased.


On the other hand, the rate of investment as a proportion of the country’s GDP – long touted as a key figure that has consistently failed to meet expectations in Bangladesh did witness a rise – a slight, creeping rise to 30.3 percent at the end of FY2017, from 29.7 percent at the end of FY2016.  It is still well short however, of the 32 percent that most economists recommend for the domestic economy to add an extra spur to economic growth, and has been the target inside the Finance Ministry since 2009. What is more, while most of the increase was similarly envisioned to flow from the private sector, on the back of investor confidence, the numbers reveal that the private sector’s share of growth in investment remained stagnant at 23 percent in 2016-17 – meaning most of the increase was attributable to the massive development projects  in the public sector, which accounted for 7.3 percent.


Helter-skelter in the banking sector


Amid a plethora of unsavoury, crudely immoral and downright fraudulent or criminal incidents in the country’s banking sector coming to the fore, spanning both private and state-owned players, Transparency International Bangladesh (TIB), the local chapter of a global anti-corruption watchdog, came out to express its concern over the “unprecedented anarchy and risk” prevailing at present in the banking and financial sector. The year ended on uncountable tales of wrongdoing coming in from every direction, and then the ultimate, unprecedented nadir: Farmers Bank, by its very own admission, would become the first bank in Bangladeshi history unable to pay its employees’ salaries for December.


As of June this year, total default loan stood at Tk 63,365 crore, accounting for 10.06 percent of the total loan outstanding. State-owned banks accounted for one-third of the total sour loans. Regulators will need to make further efforts to tackle the sector’s deep-rooted problems of corruption, poor risk practices and collusion with industry. As the IMF pointed out in a recent report, an implicit government guarantee on their deposits keeps state-owned banks highly liquid, but a further deterioration in their balance sheets could negatively impact the fiscal balance.


According to BB data, the central bank’s vigilance and anti-fraud division carried out 72 special inspections to private commercial banks out of which 19 inspections were to Farmers Bank in 2015-16.


Things came to a head when reports indicated that Farmers Bank had failed twice to honour a cheque worth Tk35.44cr presented by Bangladesh Telecommunications Company Ltd. This surfaced soon after Bangladesh Bank forwarded a report in October 2017 to the Parliamentary Standing Committee on Finance that suggested that this bank did not have the capacity to pay back funds to depositors and also to other banks.


Farmers Bank had apparently failed to maintain the statutory liquidity ratio and cash reserve ratio as required under the Banking Company Act.


At the end of September this year, the amount of default loans had reached a staggering Tk 80,000 crore; most of the bad loans were made to nine banks that came into operation only after 2013.


Disaster management as life-skill


Cyclone Mora also played a vital role in displacing Bangladeshis from their homes in late May. Heavy rains triggered a series of landslides and floods in Bangladesh and neighbouring northeast India, killing at least 156 people over two days in June. The latest casualties come weeks after Cyclone Mora killed at least seven people and damaged tens of thousands of homes.


Landslides hit three hilly districts in Bangladesh’s southeast early on June 13, killing 100 people in Rangamati, 36 in Chittagong and six in Bandarban, said Reaz Ahmed, head of the department of disaster management. Fresh landslides the next day killed one person in the district of Khagrachari and two in the coastal town of Cox’s Bazar.


Block-raiding militancy: Unqualified success?


This past year saw a continuation of the sporadic attacks by militants and raids by law enforcement agencies from 2016. The spree of operations has seen numerous militant leaders taken down. In 2017, the Counter Terrorism and Transnational Crimes (CTTC) unit of the police and Rapid Action Battalion (RAB) carried out a total of 17 raids on militant hideouts. The raids saw 47 militants dead, most casualties of their suicide bombs, the rest shot by the police. The series of blows against the militant groups may appear to be an epitaph for New JMB and its associates, but it also raises major questions. Could not a single “mastermind” of the major attacks be captured alive? The arrested members of New JMB are low-level members with little involvement in planning and organizing.


The CTTC says the two major militant groups operating are New JMB and Ansar al-Islam. The former has been decapitated with nearly all its leadership dead, the latter has had a number of leaders arrested. The only big fish who has not been found yet is Major Zia, Ansar al Islam’s chief.


In January, one of New JMB’s top leaders, Nurul Islam Marjan was shot dead by the CTTC in Mohammadpur. Things quieted down for some time afterwards, at least until March. The events of March 2017 can be summed up as a month of militancy madness. There were prolonged police operations, attempts to jailbreak the notorious Mufti Hannan on his way back to prison, suicide attacks on police outposts in Dhaka, and numerous raids and encounters between militants and officers of the law.


There were three major operations in Sitakunda, Sylhet, and Moulvibazar including a dramatic hostage rescue by paratroopers. The operation in Sylhet also saw the death of RAB’s intelligence director, the highest-ranking officer to have died in the course of the actions against militancy. So far in too many cases, the militants chose to blow themselves up in last-ditch efforts than surrender. Families often blew themselves up together, including children, and even infants.


An attack on a police check-post outside Hazrat Shahjalal International Airport was claimed by the Islamic State, but refuted by the police, who maintained these operations were being carried out by domestic outfits. On August 15, a militant planning to attack a rally of mourners for the Father of the Nation found himself besieged in his hotel room in Panthapath.


Kill 2 rivers with 1 sector


The calls for constructing effluent treatment plant (ETP) treating waste at the tannery estate in Savar to prevent pollution of the Dhaleshwari River are not answered yet – which is a big image destroyer for the country’s tannery industry, still making its nascent transition from Hazaribagh to Savar. Yet the govt also cannot escape responsibility, since a common ETP for the entire relocated sector on government-controlled land – Savar Tannery Village – was promised repeatedly by the Industries Minister Amir Hossain Amu.


Most of the drains at the newly established Savar Tannery Village are already choked with construction materials, mud, and sand. As a result, many of the roads in the village are submerged in stinking water mixed with tannery waste and chemicals. Tannery waste is being dumped near ZamZam city, which is making the area stink and posing an environmental hazard. This untreated water is also flowing into the nearby agricultural lands and wetlands, posing a health hazard, said locals.


Besides, the Hemayetpur-Singair road, the entry to the Savar tannery estate, is dilapidated, and seriously hampers the movement of all types of vehicles. According to tannery owners, trucks loaded with heavy machinery and rawhide cannot drive up to the site due to the dilapidated road. The Department of Environment (DoE) has cut off gas, power and water supply to 54 leather factories at Hazaribagh on April 8 as per Supreme Court order.


Since then, the tannery owners have started construction works at Savar tannery village site to set up their new factory units.  On March 6, the SC directed the DoE director general to shut down tanneries that failed to relocate from Hazaribagh to the Savar Tannery Industrial Estate.  About 72 out of 154 factories have already started working at the Savar tannery estate, he said, adding, “the rest of the factories are under construction and they will be able to start their factories within a short time.”

When prices strike


Flashfloods struck unusually early this year – in late March – thereby, almost totally damaging half-ripen paddies on vast swathes of the country’s northeastern backswamp. It exposed the vulnerability of Haor farmers and also caught water management administration and politically-linked contractors by surprise. Their complicities were revealed by Anti-Corruption Commission in not building and maintaining the Haor embankments thereby, failing the farmers. Crops worth hundreds of crores of Taka were washed away triggering an all-time high price spike of rice in the country. The Food Ministry was ill-prepared too as it had failed to keep the mandatory food security reserve in the public granaries. As a result for the first time in last six years Bangladesh government has to import rice from different Asian neighbours.


The retailers said although the wholesalers have cut the price of coarse rice by Tk 3-4, they have only reduced Tk 2 per kg. While visiting retail markets at Karwan Bazar, Sukrabad, Segunbagicha and Hatirpool in the city on September 25, our sister newsagency UNB’s correspondents found retailers selling different varieties of rice at higher prices than that of the previous week, although the wholesalers claim to have cut the price by Tk 100-200 per sack containing 50kg.


The same can be said for onions, as the unusual increase in its price was triggered by flash floods in Haor areas in March and April, and again after the ongoing Rohingya influx that started from late August.


With the rice market still unstable, the skyrocketing price of onion is adding to the woes of customers, especially for the low and lower-middle income groups. Onion, priced at Tk 55, started selling for Tk140. The government has blamed a syndicate of unscrupulous traders for the rise. The Home Ministry has engaged several teams of several intelligence agencies to find out the culprits at the Commerce Ministry’s request.


As each of these moves floundered, an unsettling realization started to dawn on large segments of the population that the government has lost control over prices. And in the course of the election year set to commence come January 1, it is unlikely to regain it.


Eye-catchers, & -scratchers  2017


The first papal visit in over three decades was warmly received by a nation firmly rooted in the Abrahamic faiths. Francis, the first Pope from the global South, followed in the footsteps of John Paul. Papal Mass at Suhrawardy Uddayan will not be easily forgotten by the naturally pious population of Bangladesh.


Shakib Khan-Apu Biswas proving a disastrous star couple, forcing nation to endure their nauseating and childishly strained relationship. Khan is particularly boorish. The most unfortunate party is their 1-year-old son.  A rise in sexual violence added further distaste and distress to those who seek fervently the more modern, open-minded sensibility of a secular state that respects individual liberty.


The Bangladesh Under-15 girls delivered on the promise that has been consistently on display in age-group women’s football in recent years. There is something very good in the air over girls’ football, pushing the national women’s team into the top 100 of the FIFA rankings. Meanwhile the men? Just slipped to 197.

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