05-06-2018

EDITORIAL
TuesDAY,
June 5, 2018
4
Acting Editor & Publisher : Jobaer Alam
Telephone: +8802-9104683-84, Fax: 9127103
e-mail: editor@thebangladeshtoday.com
Tuesday, June 5, 2018
Improving rural
banking operations
I
t
was revealed during question hour at the
JatiyaSangshad--sometime ago-- that the greater
number of the rural branches of the nationalized
commercial banks (NCBs) are operating with losses.
There was no indication in the statements at the
Sangshad whether the references to the losses also
presage a move to further curb the rural banking
operations of the NCBs.
If such a step is considered, it would not be
financially unjustified from the perspective of viably
running organisations and to stop giving subsidies
to loss making organisations. But then, banking in
the context of Bangladesh, cannot be entirely
divorced from the needs and principles of
extending vital services in neglected areas or
extending uniform facilities in the country to meet
the requirements of equity and justice.
Banks must be understood for the role they play in
the growth of the economy. Banks mobilize deposits
and from these deposits loans are extended to
various types of customers of banks to undertake all
kinds of economic activities. . The more the banks
extend loans to their clients in an area, the more its
chances of fast developing or growing in the
economic sense. But our vast rural interiors, hardly
served by banking activities, are deprived from these
growth opportunities. Resourceful people in rural
areas face insecurity not finding banks nearby to
deposit their monies; they are more formidably
disadvantaged from not getting institutional credit
support to take up or expand trading and other
business ctivities.
An unbiased study can be undertaken to
determine the factors for the losses of the NCB
branches in the rural areas to take curative actions
in relation to the same. Many of the NCB units in
rural areas are overstaffed and suffer from
unscrupulous activities of their officers. In some
cases, branches of NCBs are located in close
proximity that undermine the gainful operations of
all of them. So, some of them can be closed and
several merged into one while staff strength can be
rationalized or trimmed in all of them.
However, under long term careful planning
weighing prospects of both costs and returns, it may
be found that a far larger number of branches of the
banks can be set up in the rural areas compared the
present. Only these would be needed to be operated
cost-efficiently. And as the rural economy grows and
flourishes from the wider availability of banking
services, the scope would then be created to double
or even treble the number of bank branches in the
longer term. Thus, what is vitally need is a resolved
vision to expand banking in the rural areas by the
banks' management and stay in the course quite
undeterred.
Yet, there are other issues not directly linked to
banking activities but their existence such as lack of
infrastructures and underdevelopment that impede
a rise in banking activities in the rural areas. Policies
need to be in operation in response to these factors
that adversely impact on rural banking. Devolution
of power to local authorities, the establishment of
strong local government and making them
resourceful enough to undertake local development
activities, more investment in infrastructures in
rural areas, etc., would be also creating indirectly
the conditions for improved functioning of the rural
banking system.
The private banks, so far, have concentrated in
urban areas considering the returns from rural
areas to be small. But they can possibly have a
rethink in view of the very gainful experiences in
terms of profits by the bank like operations of some
NGO bodies in the rural areas. The private banks, of
course, are not expected to emulate these NGOs by
servicing their rural clients at high rates of interest
on loans. But there is a good market for them in the
rural areas which they can explore to expand their
own business while responsibly filling gaps in
banking services in the rural areas.
The Bangladesh Bank (BB) can consider the
giving of all types of concessions to private banks
that take a real interest in extending their banking
services to rural areas. The concessions may be in
the area of corporate taxes they pay, reducing the
compulsory cash reserve they need to keep with BB,
etc. Such steps on the part of BB will likely
encourage the private banks to take greater interest
in rural areas.
FROM the tail-end of the Musharraf
regime up till the 2013 elections,
local and international publications
ran a number of stories about Pakistan's
rising middle class. Some covered the
economic opportunities offered by its 40
million-odd constituents (any household
that made over Rs30,000 per month was
considered middle class), while others
spoke of the new forms of political
assertion it promised.
Both perspectives had their root in
some form of material (and discursive)
reality: total consumption as a percentage
of the economy has risen steadily since
the early 2000s (to an all-time high of 85
per cent last year); manifesting itself
through rabid consumerism in large and
small urban centres. New shopping malls
and other retail developments, now
ubiquitous in their existence, stand as
monuments to the consumerist turn in
Pakistan's economy.
Similarly, the promise of a 'new' kind of
politics on the back of middle-class
expansion came from the birth of the
private electronic and social media
sphere, the experience of the lawyers'
movement, and the rise of PTI in late 2011
and early 2012. These trends/events
made it seem like the more traditional
forms of political discourse and
participation were on their way out.
The winning party might be different,
but undergirding its win will be the same
logic and strategy that propelled so many
others to elected office in the past.
The 2013 election, and subsequent byelections
and polls held for local
governments across the country, showed
that this was not necessarily the case. As a
large and culturally diverse income
demographic, middle-class voters
approach the political world in different
ways. Some were swayed by the PTI's
anti-corruption, anti-status quo rhetoric,
while others preferred the incremental,
infrastructure gains promised by the
PML-N. But most importantly, all this
was happening while the actual political
fate of the country was being determined
through the familiar grind of dhara
patronage politics and candidate potency
in rural areas.
Five years on, and on the eve of another
general election, similar patterns are
expected to take centre stage once more.
The winning party might be different, but
undergirding its win will be the same logic
and strategy that has propelled so many
others to elected office in the past.
On first glance, this makes for
pessimistic reading. Not necessarily
because patronage and personalityoriented
politics is intrinsically evil, but
because it suggests stagnation and
persistence. It suggests that this iron-cage
structure moulds earnest intentions into
expedient strategy, and leaves one asking
how progressive change is even possible
in such stifling circumstances.
There is no comforting answer to this
question. There is, however, a way to
recalibrate expectations. A decade of
democracy might have been marked by
the same kind of political absurdities seen
uMAIR JAVed
MICk O'ReIlly
over the last 70 years - political infighting,
institutional conflicts, persisting
uncertainty - but it has also seen some
discrete (but nonetheless concrete)
changes in the nature of politics itself.
And a part of this, at least, is down to the
political impact of urbanisation and the
growth of a middle-class demographic.
Last week, PTI-affiliated social media
accounts published a list of the party's
achievements in government. It included
rising outlays on health and education, as
well as reforms designed to improve
citizen-state interaction in key sectors
(such as policing). For much of the last
few months, the PML-N has publicised its
own achievements in Punjab, which
includes a host of new infrastructure
schemes, but also an ambitious set of
reforms in the education sector. Even the
PPP has attempted to showcase its efforts
in improving health provision and social
protection in rural Sindh. Resultantly, the
airwaves are dotted with masala-driven
(and usually uninformed) debates on
who's done better in government, and
who got their priorities right.
Maybe because the standard of service
delivery is still so poor, none of this counts
as progress. Who cares that a few
boundary walls are fixed if millions of kids
are still out of school? Or who cares that
mass transit has opened up new
employment opportunities and increased
local investment if there's no clean
drinking water in most parts of the
country? For those unlucky enough to be
hooked onto social media, these questions
and debates are like part of the furniture.
There isn't a Facebook wall or a Twitter
timeline free from them.
But relevantly enough, this cacophony
of competition is the discrete change
taking place in Pakistani politics. If we
were to distil all the rhetoric around a
decade of democratisation, and attempt
to locate one solid step forward, it would
be this. Politics as it stands today may not
be capable of delivering on heightened
expectations, but its overarching
discourse is lumbering towards more
tangible concerns.
Truth be told, sweeping change was
never possible in this country. The old
ways of doing things and the institutions
so accustomed to asserting themselves
over everyone else are far too entrenched
to be done away with instantly. There are
big-ticket questions about the nature of
the state, and its contract with citizens
that are still waiting to be asked (and
solved). What is the future of the
federation?
What are the rights of ethnic and
religious minorities? What is the role of
the military in politics? The scope and
space for asking these questions has
always been limited, and this reality does
not appear to be changing anytime soon.
However, other types of questions have
started to resonate and their impact can
be seen in small nooks and crannies. One
hopes the big-ticket ones find traction at
some point too.
Source: Dawn
Hungary and the nuclear option
There is a right power struggle going
on at the moment between Austria,
Hungary and the European Union
(EU). That's in addition to the power
struggle between Hungarian Prime
Minister Viktor Orban and the EU - and
the one between the Hungarian prime
minister and billionaire George Soros.
But the power struggle between Vienna,
Budapest and Brussels has led to a
lawsuit, filed about a month ago to the
European Court of Justice against the
EU's approval of a nuclear power plant in
Orban's backyard.
Austria, you see, is vehemently opposed
to nuclear power not just in the Alps but
anywhere on the continent of Europe. In
early March, the European Commission -
the cabinet-like level at the EU - said it
was OK for the Orban government to
borrow €10 billion (Dh45.3 billion) from
Russia to pay for a critical expansion of
the Paks nuclear plant just outside the
Hungarian capital. The plant's four
nuclear reactors are of Soviet-era design -
remember Chernobyl? - and account for
50 per cent of the nation's powergenerating
capacity, supplying about 40
per cent of Hungarian's everyday
electricity needs. And as far as Austria is
concerned, Paks is too big already and has
Indian Railways, the country's
largest public-sector employer,
recently received more than 28
million applications for 90,000 job
posts it had advertised for. As of March
31, 2017, Indian Railways employed
around 1.31 million individuals.
The ratio of the number of applicants
to the number of jobs stood at a
whopping 311:1.
The number of applicants was more
than the population of Australia, which
was a little over 24 million in 2016. It
was around six times the population of
New Zealand, which in 2016 was
around 4.6 million.
Using data provided by the Central
Statistics Office of the government of
India, we can estimate that the
number of Indians between the ages
of 15 and 29, who are most likely to
apply for these jobs on offer, is 360
million (189 million males and 171
million females).
This basically means that close to
7.8% of the population in that age
group that can be categorized as India's
youth applied for the 90,000 jobs on
offer at Indian Railways. What this
calculation does not take into account
is the fact that not everybody in the 15-
29 age group is looking for a job.
Many individuals in this age group
are studying. In the case of females,
many get married at a young age and
take care of the family. In some other
cases, females have been pulled out of
school or college and are waiting at
home to get married.
We need to adjust for this - that is,
take the labor-force participation rate
of this age group into account - and
then recalculate the numbers.
A decade of democracy
On first glance, this makes for pessimistic reading.
Not necessarily because patronage and personalityoriented
politics is intrinsically evil, but because it
suggests stagnation and persistence. It suggests that
this iron-cage structure moulds earnest intentions
into expedient strategy, and leaves one asking how
progressive change is even possible in such stifling
circumstances.
a rather chequered history, with serious
incidents in 2003, 2009 and 2016. As far
as Hungary is concerned, the plant is too
critical not to be upgraded - and the
Russian loan would allow that to happen.
The Austrian energy sustainability
minister, Elisabeth Kostinger, likens her
nation's plight in stopping the Hungarian
expansion as a "David versus Goliath"
struggle, adding that "nuclear energy
must have no place in Europe". And to
affirm the Austrian appeal to the ECJ,
Kostinger added: "We will not budge one
centimetre from this position" - which
made for a very quotable soundbite for
Austrian broadcasters.
Modi government refuses to acknowledge India's jobs crisis
The labor-force participation rate for
males in the 15-29 age group was
63.1% as of June 2012, according to the
National Sample Survey Office. That
was the proportion of people who were
actually looking for jobs. For women,
the figure was only 18.3%.
There are two explanations for the
low female labor-participation rate.
One lies in the fact that many
individuals in this age group are still
studying. Further, the overall
participation rate for females is also
very low at 18.1%, and this is reflects in
this age group as well. Taking the
participation rates into account, the
total number of people in India actively
looking for jobs in the 15-29 age group
works out to 150 million (119 million
males and 31 million females).
This means close to 18.7% (28
million expressed as a percentage of
150 million) of the population in the
15-29 age group has applied for the
90,000 jobs on offer at Indian
Railways. Or to put it a little
simplistically, one in five individuals in
the 15-29 age-group applied for those
jobs.
This tells us the sad state of affairs
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As far as Brussels is concerned, the €10
billion doesn't break EU rules on state aid.
Austria is disputing this, Kostinger
confirms.
In its decision, the Commission
adjudged that the project met EU rules on
state aid, and again Austria disputes this.
Vienna is also concerned that the plan to
build two new reactors at the Paks site,
For its part, during campaigning before last Sunday's
Hungarian general election, opposition parties criticised the
awarding of the contract to Rosatom without holding an open
tender. In 2015, the government used its parliamentary
majority to keep the details of the deal secret for 30 years,
something Orban's Fidesz party said was necessary for
"national security reasons". Critics has seized on that phrase
as code for concealing corruption.
which was agreed between Hungary and
Russia in 2014, smacks of cronyism
between Orban and his close Kremlin ally,
Russian President Vladimir Putin. Both
leaders are now basking in re-election
victories, both have a decidedly different
view of pan-Europeanism, and both see
for the 1 million youth who join the
Indian workforce every month.
Another factor at work here is that the
government pays much better at
lower levels than the private sector in
India does, which obviously gets
many people to apply.
The above figures clearly show the
lack of formal jobs in India. This is a
problem that the government is not
willing to acknowledge. Recently,
Jayant Sinha, a junior minister in the
government of Prime Minister
Narendra Modi, called India's jobs
The report of the fifth round was released in
September 2016. One of the major findings of the
report was that only 60% of Indians who were
looking for a job all through the year found one. This
figure showed very clearly the bad state of jobs in
India. This was consistent with a similar finding in
the report on the fourth round of the survey as well.
crisis more of a data crisis, in a column
he wrote for The Times of India, the
country's largest-selling Englishlanguage
newspaper.
In his column he stated that 6.5
million new jobs were created in the
retail sector between 2014 and 2017.
While he didn't state the source of
these data, some digging suggests that
he borrowed this number from
"Human Resources and Skill
Requirement in the Retail Sector," a
report authored by KPMG for the
NITI Aayog, a government-run thinktank.
The 6.5 million jobs that Sinha talked
the benefit of exploring common ties and
policies between Budapest and Moscow.
That expansion work at Paks, for what's
worth, will be carried out by Rosatom,
Russia's state-owned nuclear agency -
and what it's worth is €12 billion, with
Budapest coughing up the extra €2 billion
up front.
For its part, during campaigning before
last Sunday's Hungarian general election,
opposition parties criticised the awarding
of the contract to Rosatom without
holding an open tender. In 2015, the
government used its parliamentary
majority to keep the details of the deal
secret for 30 years, something Orban's
Fidesz party said was necessary for
"national security reasons". Critics has
seized on that phrase as code for
concealing corruption. Since the late
1970s, Austria has been fiercely antinuclear,
starting with an unprecedented
vote by its population that prevented the
country's only plant from providing a watt
of power, arguing that atomic energy was
unsustainable and high-risk. And while
there is now a right-wing coalition in
power in Vienna, it too remains still
steadfastly opposed to atomic power.
Source: Gulf news
about was basically a forecast, which
he passed off as the actual number of
jobs created. As far as the lack of data is
concerned, the Labor Bureau carried
out six household-based Annual
Employment-Unemployment Surveys
(EUS) between 2010 and 2016.
Reports of five rounds have been
released to date. (Makes us wonder
why the report on the sixth round has
been held back.)
The report of the fifth round was
released in September 2016. One of the
major findings of the report was that
only 60% of Indians who were looking
for a job all through the year found one.
This figure showed very clearly the bad
state of jobs in India. This was
consistent with a similar finding in the
report on the fourth round of the
survey as well.
Recently, in an answer to a question
raised in Parliament, the government
said, "On the recommendations of the
Task Force on Employment, however,
this survey has been discontinued."
Basically, a survey that brought bad
news has been discontinued, and then
the government goes around talking
about lack of data.
There are enough data that suggest
that India is facing a huge
unemployment problem. The so-called
demographic dividend is collapsing.
The Modi government refuses even to
acknowledge this problem. The first
step toward solving any problem is to
acknowledge it. If you don't
acknowledge a problem, how do you
solve it?
Source: Asia Times