Election Alliances in Bangladesh: A Critical Review

 

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Saturday, November 17, 2012

OP-ED

Election alliances in Bangladesh

Mo Chaudhury

While there are many political parties in Bangladesh, two dominant election alliances (EA) have emerged since the 1991 election, led by the Awami League (AL) and its arch rival the Bangladesh Nationalist Party (BNP). The goal of this commentary is to explore if the EAs are a net plus for Bangladesh.

An EA should be differentiated from the formation of a coalition government when no single political party wins absolute majority in the general election. A coalition government is a governance coalition after the election and not an ex ante EA to compete in the election.

EAs can have major implications for election outcomes. Under an EA, effectively only one candidate is supported in a constituency by all the allied political parties. To the extent voter preference for a political party translates to votes in favor of its EA, an EA minimizes splitting of the votes for the allied parties. This enhances the chances of winning a given constituency by an EA candidate against the candidate of an opposing dominant political party or a competing EA. Thus, an EA system can make the electoral contests more competitive, make the parliament more robust, keep the governing party or EA relatively more accountable, and allow smaller parties to be represented in the parliament and in governance.

Importantly, however, the above EA benefits are expected in the presence of a single dominant political party or an EA already in place. In Canada, for example, during the 1990s, the Progressive Conservative Party literally collapsed and by default the left of centre Liberal Party became excessively dominant in national politics. The competitive fix came from the formal merger of the Progressive Conservative Party and the ultra-right Reform Party. Capitalizing on voter disappointments with the Liberals, the newly formed Conservative Party came to power, and using their latest absolute majority, is pushing through policies that could reverse many progressive achievements of Canada. As such, talks are now back in political circles to unify the left leaning parties. To summarize, the Canadian experience shows the downsides of a single dominant party and the benefits of an EA (merging of parties in Canada) in such contexts.

In contrast, in countries like Italy, Israel and Greece, there are numerous political parties that routinely win some seats in the parliament, no single dominant party repeatedly wins an overwhelming number of seats, and as such post-election coalition governments are a norm rather than an exception. Coalition governments in Italy and Israel are often unstable though and results in premature elections. While these democracies are fiercely competitive, the lack of assured continuity of a government and political gridlocks can be debilitating as has recently been observed in Greece.

Let us now evaluate the EA system in the specific context of Bangladesh.

First, there is no single dominant party in Bangladesh and no lack of competing political ideologies. Further, in the pre-EA elections in 1991 and 1996, there was no lack of competition, and a single party (BNP, then AL) won governing majority in each case resulting in stable parliamentary governments. Thus, there is no inherent need for EAs to make the elections competitive or to ensure stability in governance.

Second, the smaller parties have benefited the most from the EAs. Their representation in the parliament and their say either in governance or in EA positions on various issues have increased substantially. The disproportionate influence of the leftist parties on the AL-led EA and that of the religious right on the BNP-led EA can hardly be disputed.

Third, voters cannot choose any more between the stand alone views of AL or BNP, without yielding unintended support to either the extreme left or the extreme right. This resembles the US situation where a vote against the Democrats is a vote for the Republicans thus lending unintended support for the agenda of the extreme right groups that the Republicans need to court. Importantly, however, the US system of two equally powerful chambers of the legislature and the Presidency, builds in the much needed check and balance that is missing in Bangladesh since the winner EA in the parliament is in sole control of all organs of the government.

Fourth, the AL-led or BNP-led EA can form an overwhelming absolute majority government without the support of the majority of the voters. Thus, with no broad based electoral mandate, the winning EA can still bring about major and sweeping changes including constitutional amendments, and importantly it can do so without such changes being part of its election manifesto. The most recent example is the abolition of the interim Care Taker Government system by the ruling AL-led EA. Regardless of whether such changes are beneficial, the important point is that the EAs in Bangladesh expose the country to the risk of dramatic change in course with little support assured from the population.

Fifth, the parties not included in a coalition government do not typically have a unified opposition, but with EAs, the parties in the losing EA are by construction unified in opposition to the ruling EA. In the presence of two dominant political parties in Bangladesh, the marginal benefit of a unified opposition in the parliament is rather negligible. However, the unified opposition from the losing EA has traditionally led to much stronger anti-regime movements/agitations resulting in more frequent and widespread hartals, clashes, political violence, and disruptions in economic activities.

To conclude, with AL and BNP as the two dominant political parties, each allied with extreme partners in their respective EAs, the EAs appear to be a net negative for Bangladesh. With EAs, the extremist agenda, left and right, gains unwarranted leverage and can lead to polarization of the political landscape, moderate electoral choices are eliminated, the nation becomes exposed to dramatic changes in direction without a popular mandate, and the likelihood of the nation becoming hostage to disruptive political battles rises. It is thus recommended that the EAs are disbanded and banned in Bangladesh.

The writer is Professor, Practice in Finance, McGill University, Montreal, Canada.

Email: mo.chaudhury@mcgill.ca, mochaudhury@gmail.com.

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The Daily Star
Monday, November 5, 2012

OP-ED

Rohingyas and Bangladesh

Mo Chaudhury

The bouts of ethnic violence in the Rakhine region of Miyanmar since mid-2012 have once again triggered the attempted exodus of Rohingyas into Bangladesh. The purpose of this commentary is to explore key dimensions of the Rohingya tragedy and potential courses of action from the Bangladesh perspective.

First, the conflicting and growing strategic interests of the global power players in the land and sea area surrounding Myanmar (and Bangladesh) continue to prevent any strong independent action on the part of these players to bring about and enforce a mutually fair redress for the Rohingya trgedy. Such a redress would perhaps involve creating an autonomous Rohingya-majority territory in Myanmar carved out of north-western Rakhine with its political and governance structure similar to the territories of Canada and USA, for instance.

Second, the Government of Miyanmar (GoM) continues to deny citizenship to the Rohingyas claiming that the Rohingya ancestors, originating from areas now part of Bangladesh, unlawfully trespassed into and settled in the Rakhine region. The Government of Bangladesh (GoB), on its part, argues that it is an internal problem of Myanmar, and a more accommodative GoB policy regarding the Rohingyas would simply encourage continued governance failure in Myanmar.

Meantime, the tragedy continues to deepen with all of its manifold implications for Bangladesh, such as economic rehabilitation, cultural assimilation, risk of strengthening of anti-secular extremism, risk of counter violence against the Buddhists in Bangladesh, risk of infiltration of illegal arms and weapons, risk of border tension in case of Rakhine insurgency (of ethnic alliances of separatists) operating from within Bangladesh, risk of strengthening of separatist forces in the southeastern areas of Bangladesh, etcetera. The blame game (as much as the blames may be true) and the associated lack of commitment to the humanity of the Rohingyas do not seem like productive courses of action for Bangladesh.

Third, there is no legislation in Bangladesh specifically targeted at handling refugees or asylum seekers. Instead, the GoB relies on the 1946 Foreigners Act that grants it sweeping power. Further, Bangladesh is not a party to the 1951 Convention relating to the Status of Refugees and the 1967 Protocol. This legal void has provided utmost discretion to the GoB in dealing with the Rohingya refugees. For example, Bangladesh is yet to document/register the vast majority (221,000 out of the reported 250,000) of the Rohingyas already in Bangladesh, most of them since 1991-92.

Without any legal status, these Rohingyas do not qualify for any official humanitarian assistance and have been living in sub-human conditions. While respecting the international law of non-refoulement, Bangladesh did not expel the undocumented Rohingyas, but the 2012 actions of repelling the asylum seekers indicate a reluctance to respect this law going forward. Further, in November 2010, the GoB suspended the UNHCR programme for resettlement of Rohingyas abroad and has since rebuffed strong appeals from the UNHCR to revoke the suspension.

Granted that the internal security concerns of Bangladesh may be well-taken, the question is why twenty years (since 1992) is not a long enough period of sub-human living for the undocumented Rohingyas without access to lawful employment, education, health, freedom of movement, justice system and international assistance.

Fourth, the 250,000 Rohingyas in Bangladesh represent a tiny 0.17% of the country's population of 150 million, and only one-eighth of the annual growth (1.37%) of population. Further, if the documented Rohingyas are rehabilitated in low density areas, additional amenities and infrastructure needs will be minimal. With legal status, it is also expected that the economic productivity and consumption of the Rohingyas and the inflow of international assistance for them will rise. Thus, their registration is not likely to result in either a population burden or an economic baggage. Without documentation, however, not only the are economic benefits foregone, the Rohingyas may in fact become increasingly desperate and vulnerable to recruitment by criminals, extremists and political opportunists.

Fifth, there is a risk of ethnic clash and separatist turmoil if the Rohingyas are all rehabilitated in the south-eastern region of Bangladesh. For example, if all 250,000 Rohingyas are relocated to the Bandarban district, they will become a dominant ethnic majority there. Therefore security concerns warrant a spatially diversified rehabilitation, possibly dispersing a significant number of Rohingyas to the northern and western districts and perhaps the off-shore islands of Bangladesh.

Lastly, it is in the long-term interests of Bangladesh to be seen as a nation that genuinely cares about the sufferings of fellow human beings. Unbalanced concerns about internal security and geopolitics should not cloud the recollection of traumatic ethnic and political persecution of the Bangladeshis themselves in the not so distant past, nor should it be lost that a sufficiently large segment of the world was always there for Bangladesh whenever it needed economic and humanitarian assistance, especially at times of severe natural calamities. The care and assistance needed by the Rohingyas surely pales in contrast.

While mindless compassion can be reckless, so can be heartless pragmatism. Hence, it is a reasonable balance between the two that Bangladesh needs regarding the Rohingyas. Clearly the transition from defending minorities within own borders to accommodating minorities across the borders is fraught with unpleasant challenges, but continued deferral of taking up the challenges is not a sustainable choice either.

Such a recognition could perhaps start with: (a) unequivocal condemnation of the acts of violence in Rakhine as unacceptable by the GoB, civil society and other collective forums, (b) registration of the undocumented Rohingyas in Bangladesh, (c) cooperation with relief organisations to channel humanitarian aid to the Rohingyas in Bangladesh, (d) articulation and enactment of a comprehensive refugee policy, and (e) leadership by the GoB in orchestrating a multilateral alliance to address the Rohingya tragedy. In other words, a combination of unequivocal moral support, refuge and relief efforts within an internationally accepted legal framework, and mobilisation of interested powerful partners are called for.

The writer is Professor, Practice in Finance, McGill University, Montreal, Canada.

Email: mo.chaudhury@mcgill.ca

Any end to political blame game?

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Sunday, October 14, 2012

OP-ED

Any end to political blame game?

Mo Chaudhury

Political blame game is the practice of scapegoating the competing political parties for any failure or untoward event and unpopular outcomes in general. The purpose of this commentary is to explore why blame game continues to be a popular political trick and if there is a way to end its hold on politics in Bangladesh.

According to the Harvard Business Review Blog Network, researchers find that, in the end, blame game is not beneficial at the personal, group or organisation level. One explanation of this counterproductive behaviour is the virus of goal contagion, namely, one is driven to protect ego or self-image because others are doing the same. The prescribed remedial steps include constructive criticism, ownership of failure and learning from mistakes.

Given that the war rooms of political parties are quite astute, we would have observed more prevalence of such practices in politics if blame game were counterproductive in this arena. Instead, blame game has become the most anticipated strategy in politics perhaps because the electorate is not astute enough to see through the blame game maneuvers and/or not informed enough to determine true culpability, may view the blame game as a socially acceptable practice, and may not have a meaningful alternative choice (when all viable parties practice the blame game). The greater these electorate deficits are, the more aggressive the political parties may be in using blame game as a politicking tool, ultimately leading to a poor state of democracy and governance.

That blame game has taken a crushing hold on politics in Bangladesh with all of its ill consequences for the country is amply demonstrated by rampant blame and counter-blame by the ruling regime and the opposition alliance in the context of a series of recent controversies (Grameen Bank and Dr. M. Yunus, Padma Bridge financing), alleged scandals (railgate, Destiny, Hall-Mark and share markets scams), and crimes (Sagar-Runi murder, abduction of BNP MP Mr. Ilyas). However, the most blatant episode of blame game broke out following the September 29 Ramu-Ukhia incidents of violence against the Buddhist minority.

Let us explore the political landscape of Bangladesh that continues to permit and incentivise blame game even when it is utterly irresponsible, insensitive and disgraceful, like the latest one. First, despite steady strides in literacy and political awareness of the population, the vast majority of the electorate and even the grassroot party activists are still not savvy enough to decipher top level political maneuvers and theatrics. That a possibly fabricated blasphemous photo on Facebook succeeded in unleashing violence against the Buddhist community indicates that the electorate will remain quite vulnerable to manipulations like blame game for the foreseeable future.

Second, due to technological advancement and affordable access to communication networks (TV, mobile phones and internet), information now travels across the land at an unprecedented clip. Unfortunately, so does misinformation, making malicious campaigns (as witnessed in Ramu-Ukhia) and political spinning (like the ensuing blame game) more cost effective and time efficient than ever before. What is possible, however, is to leverage the same technologies to improve the transparency of governance of the state and that within the political parties and the judicial process.

The Padma Bridge financing crisis is a glaring example where inadequate and sporadic release of pertinent and often conflicting information has spawned a multilateral and global blame game that has been detrimental to the country's vital interest. Learning from that experience, a multi-party and multi-ethnic taskforce to oversee the investigation of the Ramu-Ukhia incidents can significantly improve the transparency, speed and credibility of the process, and thus save the victims and the population at large from the agony of a protracted blame game.

Third, blame game does appear to be a socially acceptable practice in Bangladesh. The political leaders and holders of high offices over many regimes have consistently declined to take ownership of their failures. Hitherto, no leader of a major political party has voluntarily taken the responsibility of a colossal electoral defeat and resigned, and no minister has yet voluntarily resigned either for massive governance failures or to make room for unhindered investigation of such failures.

Other efforts to cure the virus of goal contagion, such as constructive criticism, are also rather foreign to the political landscape of Bangladesh. Despite seemingly endless cycles of blame game and practically non-existent diligence to mitigate this infection, there is no electoral evidence that the population is sufficiently disturbed regarding this matter. Based on widely reported public sentiment, the Ramu-Ukhia centered blame game, however, appears to have shattered that complacency. If public outrage about this proceeds unabated, there is hope that blame games will finally start to recede.

Lastly, the trend of electoral alliances has practically confined the electoral choice to two grand alliances that are equally happy and mighty combatants of blame game. Since each knows that the other won't relent and there is no other viable alternative than these two grand alliances, neither has any incentive to stop blame game. In principle, an election act that prohibits electoral alliances (while permitting post-election coalition government in the absence of absolute majority) has the potential to dislodge the current grand alliances, and thereby to make room for political parties that can commit to healthier democratic practices and no blame game. But in reality, the prospect for such an act is quite slim since neither of the two grand alliances has any incentive to initiate such an act.

To conclude, the most promising path of making blame games unpalatable and politically unworthy to the political parties is for the people to remain united and unrelenting in expressing their disdain for the Ramu-Ukhia political blame game. If this blame game is not immoral, what is? If now is not the time to eradicate the virus of blame game in Bangladesh, then when is?

The writer is a Professor of Practice in Finance at McGill University, Montreal, Canada.

Email: mo.chaudhury@mcgill.ca.

Bangladesh Flag: Reviving History to Modernity

 

 

 

 

 

Reducing violence against minority

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Sunday, October 7, 2012

OP-ED

Reducing violence against minority

Mo Chaudhury

The September 29 incidents of Ramu and Ukhia are a clear reminder that the minority citizens of Bangladesh remain quite vulnerable to deplorable acts of violence even under a ruling party strongly committed to fighting religious or ethnic extremism. This commentary explores how best to reduce the future incidence of such heinous acts.

Violence in general is preponderant against citizen groups (for example, women) that are vulnerable to such crimes. The minority status of the religious and ethnic minorities makes them especially vulnerable, meaning that they are relatively more vulnerable than their majority counterparts. To illustrate this minority bias in violence let us use some hypothetical numerical figures, but the analysis and the conclusions below do not depend on the exact figures chosen. Suppose that the population of Bangladesh is normalised to 100, and say 80 are Bangali Muslims (B) and 20 are minorities (D). And say, in a year, a total of 40 citizens are victimised by violence. If there is no minority bias in violence, then we would expect 32 B victims and 8 D victims, in proportion to the population mix of 80% B and 20% D. Given the ugly reality of minority bias in violence, we would, however, expect more of the 40 victims to be D victims. A mild minority bias may lead to 12 D victims, indicating that 30% of the victims are minority citizens although they are only 20% of the population. With a severe minority bias, D victims may rise to 16 or 40% of all victims, twice their proportion in the population.

Now consider the situation where violence in general has risen so that a total of 60 citizens are now victims of violence in a year. If there is no change in minority bias due to a higher level of violence in general, we would now expect 18 (30%) D victims under mild minority bias and 24 (40%) D victims under severe minority bias. In either case, regrettably, there are more minority victims than before. But this increase in violence against minority is completely driven by the rise in violence in general and not because the minority citizens are relatively targeted more.

Aided by the above, some important observations can be made. First, with no change in attitude toward the minority (minority bias), violence against minority can be reduced significantly by vigorously arresting violence in general in the country, that is, by greatly improving the countrywide law and order situation and day to day security for ordinary citizens. In the above illustration, even with severe minority bias, reducing the incidence of violence in general from 60% to 40% cuts the number of D victims from 24 to 16. Here it is worth noting that the rise in violence against minority in Bangladesh since liberation may in part be due to an increase in the incidence of violence in general.

Second, significant improvements in security for minority citizens can be obtained by combining steps to reduce violence in general and special measures offering relatively greater protection for the minority. Thus, for example, with the lower incidence (40%) of violence in general, if the minority bias is reduced from severe to a mild level, the number of D victims will drop by 50% from 24 to 12.

Third, special motivational measures can reduce minority bias. These measures should include ceaseless public education and campaign to promote greater tolerance of competing views of religion and culture. However, a pre- or co-requisite for such measures is the assurance of freedom of expression, political or otherwise, and a culture of peaceful and legal, instead of violent and extra-judicial, resolution of conflicts of interests and opinions. Unfortunately, hopes are far fetched in these regards. Having said that, there is greater hope in an alternative motivational campaign, namely, to proclaim and promote a strong and pervasive sense of nationalistic feeling. In any political state, the greatest common denominator of citizens is their shared citizenship, and religious, ethnic and other identifications lead to increasing compartmentalisation and potential frictions. Thus, the best motivational healer of minority bias in violence seems to be an overwhelming sense of pride in and love for the land that both the majority and the minority share.

Fourth, motivational measures should preferably be supplemented by suitable legal deterrents to reduce minority bias in violence. One such legal measure could involve making the discriminatory (religious/ethnic) intent a count of criminal charge additional to the violence charge and having equal punishments for both charges. This way, a violent act with discriminatory bias would carry twice the punishment of one without such bias. Note carefully that the discriminatory intent/bias should be punishable both ways, majority crime against minority or minority crime against majority. As such, it should also help contain the risks of counter- violence and escalation in inter-group violence.

Fifth, special or targeted legal protection measures could include declaring the places of minority worship or cultural activities as national heritage sites and making the trespassing/vandalising of national heritage sites an additional (to general trespassing/vandalising) and equally punishable count of crime. It will of course be quite challenging politically for a democratically elected government to institute/legislate special protection for the minority citizens in this manner as the majority Bangali Muslims may feel reversely discriminated against. This is especially so if the special protection for minority is not accompanied or preceded by a significant improvement in security for ordinary citizens.

To conclude, it seems the best way to reduce violence against minority citizens is to improve security for ordinary citizens, promote freedom of expression and tolerance of competing views in all spheres, pass laws that make discriminatory intent behind a crime heavily punishable, and above all cultivate strong nationalistic pride and love for the country that once was earned by the promise of sanctity of life and liberty for all.

The writer is Professor of Practice in Finance, McGill University, Montreal, Canada.

Email: mo.chaudhury@mcgill.ca, mochaudhury@gmail.com.,/h5>

 

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Tuesday, October 2, 2012

OP-ED

How unholy is foreign aid?

Mo Chaudhury

Critics of foreign aid (FA) often argue that it is primarily used by the rich nations as an influence peddling mechanism to augment the interests of the citizens and organisations of the donor countries at the expense of the recipient countries. The popularly alleged partners of this unholy FA alliance are the donor governments, institutions like the World Bank, IMF and the UN, international NGOs and large multinationals. Political parties in the recipient countries are often labeled as agents of the FA alliance by many of their citizens, intellectuals and media.

This commentary attempts to evaluate the merits of this perception of FA being unholy or immoral. The focus here is on whether FA is contrived as an unholy endeavour, not the extent to which FA has historically helped or harmed the recipient countries. There are several angles to look at this issue.

First, except in unusual circumstances such as Iraq and Afghanistan, FA is not forcibly parachuted into the recipient countries; by and large it is the recipient countries that seek out FA.

Second, critics may argue that the alliance manufactures a crisis environment or a pretext in general, that forces a recipient country to request and accept FA. This could indeed be the case for achieving geo-political objectives of mighty or aspiring donor countries. In such instances, FA can be termed unholy if the geo-political outcomes are detrimental for the recipient country. There is nothing unholy about the manufactured pretext if both the donor and the recipient ultimately benefit from the geo-political outcomes.

Third, it is important to keep in mind a framework of mutual benefits for the parties to an endeavour. One-directional flow of benefits is inherently unsustainable in the long term, especially when resources are scarce. As such, that the FA alliance may seek to harness benefit from FA for their stakeholders is rational, and should be expected instead of suspected or despised. After all, FA transfers to the recipient country imply foregone opportunities (such as curtailing budget deficit) in the donor country. What could be truly at stake is the sharing of the long-term benefits of FA between the recipient and the donor countries. As a matter of practice, the long-term benefits for the donor countries are rarely stated or even discussed in FA arrangements. This lack of full disclosure permits the critics and political opportunists to paint FA as unholy endeavours with hidden agenda. Importantly, however, that the agenda of long-term benefits for the donor country is not being delineated does not make the offering of FA unholy in any way.

Fourth, it is true that there can be collusion between the international agencies and the rich donor countries funding these agencies. But this is known, rational and expected. Doesn't it make sense that the donor countries have a major say about the FA operations of the agencies they fund? Thus, for example, suppose the major donors ask the WB to cancel a previously approved loan to Bangladesh because of corruption allegations. Is this immoral? Not really. Governance is a major concern everywhere and it can only be beneficial for the people of Bangladesh if the WB uses the FA window judiciously to help improve governance atmosphere in Bangladesh.

Fifth, multinationals do profit from FA through consulting, banking, construction, et cetera, in the process of implementing FA funded projects. In most cases, the multinationals obtain these businesses through competitive bidding process and quite often they seek the services of local lobbyists and partnership of local firms. As long as the multinationals carryout these activities in a legal manner and within the stipulated conditions of specific FA ventures, there is nothing unholy about it. In fact, there is a transfer of technology and know-how from the multinationals to the recipient country. It is true that in some cases, the donor countries may insist on the employment of specific firms for FA projects. But in those instances, it is generally because the technological information is very sensitive and/or its transfer or leakage may pose a security risk, as in the case of nuclear power plants.

Sixth, unlike the multinationals, the NGOs are non-profit organisations. As they carry on their development work in the recipient countries, their mandate may require them to promote specific types of economic or social practices and institutions. Critics argue that the preferences of the NGOs lead to transformation away from the traditions of the recipient country. Yes, they can and yes, they do. The important thing, however, is that none of this is done by compulsion, all NGO activities take place upon the approval of the government of the recipient country and within the laws of the land, NGOs are not making any money from such activities and there is no owner of NGOs. They raise a significant part of their FA funds from the well-meaning citizens across the world including those from their home base or donor country, and the operations of NGOs create local employment and transfer of technology and know how. So, what is unholy about the operations of the NGOs?

To conclude, there is not much that is unholy or immoral about FA. So long as the FA activities are mutually consented to, respect the laws of the land and the terms of the contracts, and are not designed to benefit the donor countries and institutions at the expense of the recipient country counterparts, the perceived unholy alliance is just that, imagined, not factual, and the allegations are likely spawned by political opportunism or an inherent philosophical intolerance for foreign practices and institutions.

The writer is a Professor of Practice in Finance at McGill University, Montreal, Canada. Email: mo.chaudhury@mcgill.ca

Padma Bridge Financing Stalemate in Retrospect

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Thursday, September 27, 2012

OP-ED

Bridge financing stalemate in retrospect

Mo Chaudhury

In its September 20, 2012 statement, the World Bank (WB) expressed its intention to reinstate the previously cancelled Padma Bridge (PB) loan subject to a series of measures agreed to by the government of Bangladesh (GOB). At this critical juncture, it is worthwhile to reflect back on the preceding stalemate between the WB and the GOB so that similar pitfalls can be avoided in future.

The PB has the potential to significantly expand and accelerate the pace of productive activities in the country, especially in the south central region. Politically, construction of the PB would fulfill a key election promise of the current governing party. For the WB, the PB would be its largest ever infrastructure project and could expand its future development activities in Bangladesh. It is thus puzzling that the differences between the two quarters were not ironed out for so long. So let us try to understand the critical elements in the making of this stalemate.

First, once the alleged corruption schemes were brought to the attention of the WB and the RCMP of Canada concluded that the allegations were credible enough to merit a trial, the WB had to cancel the PB loan and could not afford to reinstate it as the GOB did not quite fulfill the stipulated remedial actions. Otherwise, the WB would be violating its own governance policy, creating a bad precedence of lax implementation of its governance standards, and also facing severe backlash from its governance-weary major donor countries.

Second, a scheme to engage in corruption is not an act of legally punishable corruption according to the operational definition of the GOB. As such, the prime minister and some GOB officials believe that no corruption was perpetrated since no bribe actually changed hands. However, any corruption scheme by itself is considered a legally punishable crime by the WB and its major donor countries.

Third, the WB publicly encouraged the GOB to release all of their shared information and communications, but the GOB released only some of its communications to the WB and none from the WB to the GOB. The often changing and conflicting statements of the GOB ministers and officials only deepened this dire information crisis. Consequently, instead of standing firm and united behind a consensus, the nation seemed more polarised and fractured than ever before. From a negotiation point of view, the credibility deficit of the GOB's position and actions loomed large in favourably reversing the hardened negative opinion of the major donor governments and hence the loan cancellation decision of the WB.

Fourth, the GOB followed an incremental and minimalist approach to address the concerns of the WB, perhaps believing that the WB stipulated a set of conditions that was broader than it was ultimately going to settle for. Also even a partial enactment of WB's recommended set of actions was likely seen by the GOB as over-accommodating given its operational definition of corruption. Further, perhaps the GOB felt that implementing the entire set of actions prescribed by the WB and doing so at once in a prompt manner might unduly extend the reach of external interference in the internal affairs of Bangladesh. As the events unfolded, it was apparent that the GOB grossly miscalculated the resolve of the WB in pursuing the entire set of remedial conditions.

Fifth, the GOB followed incoherent and sometimes quite contradictory paths of managing the PB financing crisis, for example, seeking other development assistance, self-financing, partnership with China and/or Malaysia, and on-again and off-again pursuit of reinstatement of the WB loan. Perhaps the GOB wanted to keep open alternatives routes to ultimately financing a PB, if not the PB. The inevitable consequence, however, was an overall sense of confusion, a lack of credibility for the restarted negotiations with the WB, and a widely shared perception that the government was in disarray.

Sixth, many in Bangladesh believe that the WB had an ulterior motive behind its PB loan cancellation. Among the competing theories, the one that became most popular and enjoys the support of the PM is that the foreign friends of Dr. Muhammad Yunus were exacting revenge for what they perceived to be a grossly unfair treatment of the Nobel laureate by the PM and her government.

Even if the revenge theory were true, it is unfathomable how such accusations by the GOB leaders could help the reinstatement of the PB loan and future economic interest of Bangladesh. Further, with no remedy for the perceived unfair treatment of Dr. Yunus, the GOB's recent Grameen Bank Ordinance could have only hardened the stand of his foreign friends on the PB loan.

Now, for the revenge theory to be valid, Dr. Yunus would have to promote the political and/or business interests of his foreign friends controlling the WB affairs. This sounds rather absurd. No political regime has ever complained about him acting to enhance the interests of any political party or ideology. Financially, microcredit institutions like the GB are arch competitors of the large multinationals and financial institutions based in the major donor countries funding the WB. Further, the social business model of Dr. Yunus could only mean stiffer competition and lower profits for the multinationals and big businesses in those countries. Thus, the Dr. Yunus revenge theory lacks a defensible foundation and of course tangible evidence.

To conclude, it is hoped very much that the above pitfalls in managing the PB loan crisis that led to the nearly fatal stalemate will be avoided in the days to come now that the WB has revived the PB financing deal.

The writer is a Professor of Practice in Finance at McGill University, Montreal, Canada. Email: mo.chaudhury@mcgill.ca