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The political economy of pro-market reforms in Bangladesh: Regime consolidation through economic liberalization?

2000; Taylor & Francis; Volume: 9; Issue: 2 Linguagem: Inglês

10.1080/713658731

1469-364X

Fahimul Quadir,

Global Financial Crisis and Policies

Given the apparent failure of market-oriented reform programs to improve Bangladesh's macro-economic performance in a sustainable manner, this paper poses questions about the ability of structural economic reforms to escape the dilemma of a 'low growth, low investment cycle'. It focuses on three major questions: What politico-economic factors have led the successive regimes in Bangladesh, beginning with that of General Ziaur Rahman, to implement economic liberalization programs? Despite unsatisfactory economic performance of adjustment, why did all three subsequent regimes continue to carry out market reform programs? What encouraged the democratically elected government of Khaleda Zia to accelerate the pace of such reforms? Contrary to the claims of most mainstream analysts, this paper suggests that promarket reforms were implemented in Bangladesh neither to stabilize the economy nor to meet broader development challenges. Instead, it argues that economic reforms were used primarily to consolidate the power of the ruling elites. Successive regimes, both military and civilian, treated market reforms as an instrument to build and maintain political coalitions in particular with traders and industrialists. In exchange for political support, they allowed business elites to use economic restructuring as the primary tool to attain their financial and economic objectives. As a consequence, economic liberalization programs failed either to improve the performance of the economy, or to raise the living standards for the majority.