Recommendations of the Economic Policy Paper on
Political Decision and Implementation: Effect on Economic Development

* A liberal democratic system that can alone guarantee an effective role of the politicians in running the statecraft can be achieved on the basis of mutual accommodation and understanding among political parties. Otherwise, confrontational politics will continue to take, as it has been doing, its toll on governance, economy and, thus, nation's development. This holds true for all, irrespective of whichever party or parties are or, will be, in power through periodic electoral cycles.

* The elected political leadership at the top needs to provide an overarching vision — provided in a policy statement or in a set of basic conditions — that gives a clear signal to the policy planners in ministries and public institutions and to the civil society about the broad objectives and goals of the government.

* Devolution is necessary to do the mobilisation of people and secure their participation in nation-building activities. On this count, Bangladesh has so far settled for only cosmetic changes. As a result, without local government bodies at the grassroots, many development efforts such as primary education, population planning, healthcare, rural work or agriculture just cannot be efficiently implemented.

* Devolution, not mere decentralisation, is a prerequisite for strengthening political decision-making and better public service delivery at the grassroots. This will be a prod for improving responsiveness of public services to users.

* Establishment of the Ombudsman's office, as called for in the Constitution, strengthening of the office of the Comptroller and Auditor General (CAG), separation of the audit from the accounting office etc., can be the catalysts for reinforcing accountability mechanisms within the executive branch of the government that includes ministries, agencies, state-owned enterprises (SOEs) and the like, in addition to improving parliamentary oversight.

* Without effective institutions, the benefits of growth under competitive market-driven conditions which are the stated policy goals of the major political parties in Bangladesh, would continue, as before, to by-pass largely its poor people.

* Because of the opaque nature of political decision-making, basic policy issues such as economic policy framework, foreign policy, international relations, security matters including defence appropriations, reforms in important economic matters, restructuring and reforms of local government structure and reorganisation etc., are hardly discussed in depth in the parliament.

* For the ruling party, it will be easier to proceed on policy actions first in those areas where there is already a distinctive similarity or closeness of views between itself and the main opposition party, about tackling the problems that face the nation in its endeavours to accomplish the cherished national goals and objectives. This can provide a good ground for building blocks for forging a national consensus.

* Parliament has to be made functionally fully effective for the purpose. While the majority party in parliament forms the government to implement its stated programs and the agenda of actions in key areas of focus, the opposition should also make its views known very effectively in parliament. Indeed, a tough, no holds-barred, stand — that, of course, within the well-established norms and practices under a democracy — can enhance responsiveness of the government. The executive can then be made accountable for openness in government. This is vital for good governance.

* A number of steps like establishment of permanent legislative supports and oversight agencies, strengthening of the system of parliamentary standing committees along bipartisan line, enforcement of the system to subject decision-making on all major national issues to full and open parliamentary debate and discussions before formulation of national policies, reinforcement of the time-tested parliamentary practice of questioning ministers, strict adherence to standard parliamentary norms and practices etc., can all contribute to making parliament more prominent in national life and, thus, to strengthening the role of politicians.

* Accountability and transparency of government operations — the most important aspects of good governance — are needed not only for optimal use of scarce resources but also for preventing application of arbitrary authority as well as misuses of discretionary powers.

* There is a strong urgency to improve transparency, efficiency accountability, effectiveness and dynamism at all levels and in all affairs, particularly of public administration. Improvements thereof are politically indispensable for successful public service delivery. New institutional mechanisms concerning public administration have evolved in several countries in order to devise appropriate public policy- and decision-making process and implementation mechanism thereof. This can be a guide to spur action in Bangladesh.

* Strong political commitment, coupled with stronger political will, is a precondition for ensuring an effective role of the politicians in support of accelerated development. The shifting of gears for the political process will be necessary for the purpose. This will lead to improved policy evolution, formulation and implementation. This can secure the commitment of the nation to a preferred course of action.

* The open discussion of all major policy issues in parliament and in parliamentary committees would be the principal step towards making it (parliament) the focal point of politics. Budget should in particular be reviewed at regular intervals and its implementation should also debated. This is not done now.

* The interaction with the civil society on a regular basis can help expose the existing constraints within the institutions of governance. Consultation with the relevant people is the way of designing good policies and initiating good practices.

* It is imperative for Bangladesh to improve the functioning of the government machinery through consultations, dialogues and interactive deliberations with all concerned - stakeholders in development activities. The government can then work better in pursuit of national development goals and objectives.

* The rule of law and the independence of the judiciary, constitutional bodies, quasi-judicial organisations and regulatory authorities are furthermore vital props for ensuring checks and balances to promote good governance.

* Democratic decision-making requires that the business of the government is transacted according to the decisions of people's representatives, and executive agencies are established and abolished at their (people's representatives') will.

* The technical expertise of the Bangladeshi experts abroad in relevant fields and also of those outside the government within the country, should be involved in providing both analytical inputs at the design stage of draft policies and in offering critiques thereof. This will improve policy planning. Government should focus its energies and resources of public sector (overall government) on core functions which only it can provide and on programs like poverty alleviation which are not adequately provided by others.

* A concentrated attention on a synergy of actions for improvements of quality of civil service is needed to raise the efficiency of the administrative system and, thus, of the implementation mechanism. The present secretariat system with generalist-bureaucrats — jack-of-all-trade-types — at the top has largely lost its relevance to the needs for policy formulation to meet the complex nature of issues in today's world.

* Transparency is the greatest assurance for accountability of, and openness in, government operation. This should be the rule rather than exception. This can contribute a lot to strengthening decision-making capacity among political leadership with valuable input supports from higher bureaucracy, technocracy and econocracy.

* Political appointees at higher levels of government should be inducted for policy-planning purposes. They will take up the task of policy making with the agency chiefs providing the technical back-up services. The political appointees will be experts but committed political people. They will be responsible for policy advice and formulation under the guidance of the minister. They will hold office during the tenure of the political government that appoints them and will leave office as soon as the latter vacates power.

* There is an urgent need for either creating or restructuring policy planning cells in the ministries. Otherwise, the role of policy planners in the development process will hardly be different from what the same has been for long. Improved capacity of policy planners will facilitate the emergence and availability of an appropriate menu of policy options clearly in the process of debates, discussions and deliberations through planning cells of ministries for ultimate decisions thereon by the political leadership.

* Improved coordination and decision-making within key economic ministries — the ministries of planning, finance, commerce, industry, and the like — can strengthen the policy-makers' role under a structured institutional arrangement through the Prime Minister's office. Establishment of a Prime Minister's Private Sector Advisory Council, comprising key ministers, secretaries, technocrats, econocrats and leading businessmen, will be considered a right step towards strengthening policy planning exercise. This is so because relations between the government and the private sector need to be much more collaborative than what is at present.

* The usefulness of the Implementation, Monitoring & Evaluation Division (IMED) should be increased for assessing overall policy implementation. For this, widening of the IMED's mandate is necessary in order to enable it to serve as the Chief Executive's (or Prime Minister's) main Watchdog for monitoring and timely feedback of the entire range of government's activities — development, recruiting, policy, regulatory etc. This can be done by vesting the IMED with adequate resources and well-qualified personnel.

* A clear delineation of the functional responsibility of the policy planning apparatus and the executing agencies may be helpful in order to bring about the desired structural changes. Such changes in administrative structure and practices will be strong props for executing and implementing the policies and programs of the government.

* An effective role of implementors is now impaired by several overlapping agencies. This problem can be redressed by bringing all the executing agencies under one kind of organisational structure, called bureaux, instead of existing numerous kinds of directorates, boards, corporations, bureaus, commissions, authorities etc.

* The central issue that concerns the Bangladesh economy revolves around the task of raising investment and accelerating labour-intensive economic growth while maintaining macro-economic stability.

* The jurisdiction between political decision-making and executive responsibilities should be properly delineated.

* A freedom of information law should be enacted so that all government documents and information are made open to the public, in some cases after some passage of time. The reasons for classifying information and documents as secret or confidential must be explained to the public on demand. This would help limit the exercise of discretion in policy-making and discretion, where needed, will follow some justifiable reasoning.

* One major complaint of the opposition for boycotting parliament in the past has been that major policy decisions were taken by-passing the people's representatives in the parliament or its (opposition's) legislators were not given enough time to speak on matters of public importance. The introduction of time clocks, similar to those used in chess to record the time allocated to legislators and as is already in use in the Australian Parliament, can be considered here to help overcome this problem.

* The procedural weaknesses of the public administration or the bureaucracy for whatever reasons or a combination of the same — archaic or ineffective rules, secretive or slow nature of its work, inadequate or imperfect logistic supports, deterioration in quality, tendencies to pass files to a higher level for final approval even on routine affairs, should be effectively addressed.

* Public spending in social sectors should benefit the poor. As such, its benefits need to reach them. It is important to improve quality and equity of public spending through effective social expenditure management, proper selection and designing of projects and programs with high poverty reduction impact and effective targeting.

* The weak implementation capacity of public institutions and the absence of an adequate accountability regime have been one of the major causes of the poor performance of the state in regards to the needed public investments and efficiency of overall public expenditure. Therefore, steps should be taken to improve implementation capacity.

* With all public services in Bangladesh, what policies say is one thing; how they are applied by bureaucrats and implementors is another. The overall implementation capacity is weak. This is, in general, explains why public investment continues to be at extremely low levels of 8-9% of GDP, despite the availability of concessional aid funds at over $6.00 billion in the pipeline.

* The government also creates major problems when it announces policies which are clearly unrealistic. Thus, it, for example, committed itself in the early 1990s to provide formal education for 15-23 million learners (largely adults) by the year, 2000. While the policy was laudable, it was widely regarded as non-serious, rhetorical and impossible to implement in the seven-year time-frame and also as not being based on proper assessment of the resources available —institutional, financial or human. And indeed, it proved itself to be so. Therefore, both capacity and quality of implementation agencies should be improved.

* The feasibility of budgetary expenditure in social sectors critically depends on effective efforts to strengthen considerably domestic resource mobilisation, alongwith prudent expenditure management. Improving aid utilisation may be also an effective option for enhancing the availability of public resources for social sectors. But here too, demonstration of major improvements in project implementation and also of the ability of the government to undertake policy or institutional reforms will be necessary to utilise the existing pipeline of assistance and to gain access to higher levels of concessional assistance that are concentrated mainly on social sector investment.

* A rigorous exercise will be needed for rationalising ADP expenditures, reviewing and prioritising the projects and examining critically their components.

* Being still below the average, even for low-income countries, in savings and investment performance, Bangladesh needs to embark on a concerted effort at mobilising both savings and investment to reach rates of 30 per cent of GDP within the next decade.

* The confrontational politics have made the decision regarding moving ahead with hard choices of reforms all the more difficult. In the process, many reform programs that were earlier initiated, have got bogged down due to ineffective implementation. The implementation of reforms in general has to be expedited. But caution will also need to be exercised so that reforms are implemented in a transparent manner. Policy reversals and ambivalent follow-ups at the working level must be avoided.

* Building of infrastructure—ports, roads, electricity, telecommunications etc.,—has not progressed in the 1990s at the required pace, in both quantitative and qualitative terms. Therefore, infrastructure-building efforts should receive a befitting priority to materialise the vision of 7-8 per cent sustained annual growth of GDP in order to lift the Bangladesh population out of poverty.

* Problems of inefficient management of the country's port services and their poor productivity (at nearly one-third of productivity of its neighbouring counterparts like Colombo, Madras and others) should be addressed effectively. Privatisation of the back-up services in the existing containing terminal of Chittagong should be implemented on a priority basis. The existing capacities and the future growth of container traffic at the Chittagong Port heighten the need for development of container facilities there by using the private sector. This offers a better solution, on efficiency consideration, to its problems.

* Effective measures should come at the earliest to expedite actions on unbundling of generation, transmission and distribution of electric power, establishment of a power sector regulatory body, enforcement of a rationalised tariff structure and the like. Besides, it is necessary to install new capacities for adequate transmission and distribution of power in the country, alongside efforts for increasing the generation capacity through private sector. It is also important to consider how the role of the private sector can be extended to financing and managing the distribution network.

* Public sector domination of the physical infrastructure is now out of fashion. It would, therefore, do better to change effectively the policy orientation and implementation in favour of the practices elsewhere. Private sector should be associated more and more in infrastructure building while the government is involved in setting up independent and competent regulators for the purpose.

* The provisions of the physical infrastructure need to move in harmony for not only improving the productivity of the economy but also enhancing its size and structure. Private investment in infrastructure is likely to expand and strengthen the role of the private sector in the overall economy.

* With the construction and regular maintenance of roads, bridges, irrigation canals, seaports, airports and river ports, power stations and transmission lines, telecom networks and the like in private sector or under public-private partnership, returns from projects and efficiencies thereof are expected to improve. Then public funds can be used for meeting other competing demands. Such an approach is unavoidable to help gradually overcome inadequacies in the nation's infrastructure base.

* The policy departure away from an earlier highly restrictive system focusing on import substitution to a more dynamic, export-oriented structure has shown some of its dynamism and competitiveness in the Bangladesh economy last decade, until the recent recessionary trends in global markets for ready-made garments, knitwear, foreign trade and leather products. However, the progress so far in pursuit of such reform policies has been mixed, much like the outcomes thereof in terms of their stated goals. Half-baked reforms were responsible for it. It is important to properly sequence the reform agenda.

* Divesting the losing public enterprises to arrest a drain on public exchequer, apolitical restructuring of the civil service based on merit and performance, consolidation of fiscal measures to sustain the growth in government revenue, strengthening the financial system, liberalising labour policies and putting into effect appropriate regulatory and institutional framework are necessary for attracting both domestic and foreign private investment. For such purposes, effective policy changes will need to be formulated or devised and will then have to be carried out expeditiously and with full political commitment.

* The ailing state-owned enterprises (SOEs) that are already putting a heavy drain on the budget and the economy should be phased out. Where privatisation of SOEs does not appear to be a feasible option, there should be exit policies to save scarce budgetary resources from being pumped every year into what are essentially non-viable enterprises. This would release additional resources for anti-poverty programs aimed at increasing the poor's access to school, health centres, nutrition, roads, electricity and microcredits, to name a critical few.

* An explicit criterion should be developed for identifying the core social services; expenditure should be prioritised; attractive means of service delivery should be devised; better financial management should be ensured; and management responsibilities to the local levels should be decentralised. Furthermore, beneficiary participation should be incorporated for increasing the efficiency of service delivery.

* Lack of coordination among those responsible for setting specific goals and objectives of national development plans and formulating the strategy thereof and institutionalising the mechanism for their implementation- have been considered as a major impediment of better performance.

* Democratic good governance has been considered essential pre-condition to accelerated socio-economic development.

* All stake-holders should be involved as much as possible in all economic, political and social decisions, commitments and reforms for good governance.

* Factionalism and politicisation at key levels should be done away with and immediate steps should be taken to train skilled manpower, increase productivity in plant level and boosting competence and morale.

* Need for political reforms in order to orient the policy towards serving more purposefully are the daunting challenges of time.

* Stress should be given in persuit of the oft-repeated national goal of strengthening the local government bodies and devolving development activities at the grassroots.

* While development efforts on a long-term basis are made, policy makers should try to achieve maximum possible performance in short and medium-term policies as well.