Economic independence and political sovereignty

Anis Chowdhury | Published: 17:01, Mar 27,2018


… Sovereignty means … the right of a country to have no-one interfere in its life, the right of a people to choose whatever form of government and way of life suits it. That should depend on its will, and only that nation can decide whether a government changes or not. But all these concepts of political sovereignty, of national sovereignty, are fictitious if there is no economic independence to go along with them.


THIS was how the legendary revolutionary Che Guevara highlighted the critical importance of economic independence for political sovereignty 58 years ago on March 20, 1960 in his lecture, the first in a television series entitled ‘People’s University,’ a programme of talks by leaders of the revolution. Eleven years later, on March 26, 1971, Bangladesh declared political independence to be won nine months later through a bloody war of liberation on December 16, 1971.


Whither economic independence

ONE of the factors that galvanised the nation against Pakistan was economic exploitation by the Pakistani ruling class and its local compradors. That is, the Bengali nation sought political and economic liberation, as the political arrangement made in 1947 when the British left India after nearly 200 years of colonial rule, did not produce economic independence for Bengalis. They desired a country, free of exploitation, not only by foreigners, but also by their local counterparts.

Unfortunately, 47 years since we snatched our victory from the jaws of ruthless Pakistani rulers, the dream for an exploitation free society recedes further away. The plunder of the state and exploitation of the masses by the politically connected began almost immediately, shattering the dream of independence. About 15 lakh people met premature death and another 15 lakh became permanently impaired due to malnutrition. An estimated 50 lakh women had to sell their bodies for bare survival within three years of victory due to one of the worst man-made famines in history. Those who protested against the misrule and plunder met state violence and often brutal death.

Real wages far below what is needed for a decent living, wanton industrial accidents, like the Rana Plaza disaster which killed more than 1,100 workers or the fire at the Tazreen fashions factory are some glaring evidence of how the country’s economic sovereignty is being comprised at the altar of multinational corporations driven globalisation. Not only are global giant MNCs, such as Gap, Zara and H&M or K-marts, Walmarts profiting from the toils of Bangladeshi workers, their local agents are also amassing wealth at an unprecedented rate. Thus, inequality of income and concentration of wealth have been rising in Bangladesh since the mid-1980s when the country had to embrace neo-liberalism as a condition for financial support from the International Monetary Fund and the World Bank.

Even the IMF research now shows that neo-liberalism was oversold and contributed to rising inequality around the world. The Asian Development Bank listed Bangladesh among the 15 Asian countries, where inequality has increased significantly during the past three decades. According to the World Bank, the share of the lowest 10 per cent of the population (poorest) in the national income declined from 4.23 per cent in 1984 to 3.99 per cent in 2010, whereas during the same period, the income share of the top 10 per cent (richest) rose from 21.87 per cent to 27.03 per cent.

The ruling elites and local collaborators of the MNCs glory in the progress made as measured by GDP. But they never care about the welfare of the workers and peasants at the back of whom this progress is made.

A recent report by OXFAM, ‘Reward Work, Not Wealth’, gives a graphic picture of modern day slavery in the country’s garment industry which now accounts for about 80 per cent of its foreign exports. It narrates the real life struggle of female workers like Anju, Fatima and Farida who work in export-oriented garment factories. They often work 12 hours a day, until late at night; yet skip meals because they have not earned enough money.  They are regularly abused if they fail to meet targets and suffer from repeated urinary tract infections because of not being allowed to go to the toilet.

Wages in garment factories are so low that, even with overtime, the combined family income (with husband) is still not enough to feed the whole family properly, surviving for half the month on watery rice with chilli and salt. On average, it takes just over four days for a CEO from the top five companies in the garment sector to earn what an ordinary Bangladeshi woman worker earns in her whole lifetime!


Globalisation and sovereignty

IN THE context of world markets, and dominant role of MNCs, economic sovereignty of nation states has become severely constrained. Technological advances in transport and communication are eroding the territorial boundaries between hitherto separate markets, which are a necessary condition for autonomous national policies. Monetary and fiscal policies of individual governments are now dictated by the movements in international financial and capital markets.  Similarly, countries are forced to dilute their national interest regulations in the areas of taxations, working conditions (e.g., minimum wage, workplace safety) and the environment as they ‘race to the bottom’ to attract MNCs, or to improve their ranking in the World Bank’s politically motivated dubious ‘Doing Business Report’.

And national policy parameters, be in the macro or in the sector specific areas, are determined by the IMF and the World Bank in a ‘one-size-fits-all’ manner without any regard for country specific circumstances or the level of their development to suit the needs of private capital, especially from the powerful countries. 

As the powerful nations retreated from multilateralism by effectively killing the World Trade Organisation’s Doha Development Round and resorted to various bi-lateral or plurilateral free trade agreements, poorer countries, like Bangladesh come under increasing pressure to surrender even their political sovereignty. For example, the Trans-Pacific Partnership Agreement and its resurrected so-called progressive version give the MNCs the right to sue a sovereign state in an arbitration court of their choice when they believe a change in national laws are affecting their profits, even if they enhance or protect national interest.

Regional economic unions, FTAs and common currency are promoted arguing that they enhance economic growth and progress. But ironically, they weaken economic security and constrain political sovereignty. They even undermine democracy as national interests are sub-ordinated to the interests of the powerful countries and their influential corporations.


Impossible trinity or trilemma

RENOWNED economist Dani Rodrik has described the contradictions among globalisation, democracy and economic independence as an impossible trinity or trilemma. That is, a country cannot achieve deep economic integration with the global or regional economy, have an accountable participatory democracy and independent economic policies at the same time. It has to give up at least one.

For example, if a country chooses vibrant democracy and economic independence, it has to forego deep global and regional integration. On the other hand, if a country chooses deep economic integration, it has to give up either democracy or economic sovereignty. That is, deep regional and global economic integration can happen only at the cost of compromised political and economic independence. Such a compromise may result in higher GDP, but not shared prosperity for all. It brings affluence only to a few — the comprador bourgeoisie class, and heightens economic insecurity.

A divided and fractured society characterised by high inequality and a lack of democratic accountability cannot be economically resilient as was seen during the Asian and global financial crises. For example, Indonesia’s economic and political structure collapsed suddenly even when it was growing at over 7 per cent a year. Malaysia managed to survive only because Mahathir was bold enough to stand up to the IMF and asserted its economic independence by introducing measures to control cross-border capital movements; but is still wobbling as its democracy remains questionable and it continues to surrender its economic and political sovereignty to the interest of foreign capital.


The choice for Bangladesh

As Bangladesh celebrates its 47th Independence Day, it has to strengthen both economic and political sovereignty. This can only be done by strengthening its democratic governance; by empowering its citizens and safeguarding their participation to ensure transparency and accountability. Empowering citizens and expanding their capabilities would require freeing people from poverty, and deprivations; guaranteeing equal welfare services and the rule of law; and preventing concentration of wealth. At the end of the day, true sovereignty belongs to people. Only they can protect political and economic sovereignty.

Let me conclude by quoting Che’s warning, ‘...Countries that achieve … political independence, but because they do not secure their economic independence, little by little the former gets weaker and finally disappears.’

Let us hope, that will not be the case for Bangladesh.


Anis Chowdhury, adjunct professor, Western Sydney University and University of New South Wales (Australia); held senior UN positions in New York and Bangkok during 2008-2016.

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