The features of social democracy can be implemented to various degrees across the developing world as the system is compatible with the market economy, democracy and socialist goals, said prominent economist Dr Wahiduddin Mahmud.
No political revolution is required in social democracy but a change in the mindset of the governing regime, he said at the Annual BIDS Development Conference on Thursday at a hotel in Dhaka.
He said while presenting the keynote paper titled Rethinking Socialism for Democratic Developing Countries, "Democratic values, political commitment and public support are required to establish a social democratic system."
"Some political parties in the world succeeded in implementing their socialist political agenda after being elected. But some of the parties became autocratic to ensure the interest of an influential group."
He further said, "An elected regime may tend to become autocratic thinking that there is no alternative to that to continue its rule."
Professor Rehman Sobhan, chairman of the Centre for Policy Dialogue, chaired the session. He identified inequality and political polarisation as the major obstacles behind the failure in establishing a social democratic system.
He said that wealth and resources are being concentrated at the hands of a class of rich influential people.
He also said that Bangladesh is a fast growing and increasingly unequal society and that is the objective reality.
This eminent economist further said that the business class or economic powerhouses are dominating the democratic power here.
From union parishad to the parliament, business people dominate the policy making position, he said.
Dr Wahiduddin Mahmud presented an overview of the emergence and the fall of the socialist movements in the world.
He said most of the newly independent countries had a tendency to undertake socialism as an economic policy following the development of the Russian federation in terms of industry and knowledge.
The fall of Soviet Russia and China's switch to market economy have shown the failure of both the centrally commanded economy and communist agricultural system. The failure was reflected in Soviet Russia in the daily queues for essential livelihood items in spite of great achievements in science and technology, he said.
He also said the great famine in China and frequent agricultural disasters in Soviet Russia also showed the limitations of the collectivist farming model, although supporters of Soviet communism worldwide used to cite bad weather as an excuse.
The economist said in his paper the constitution of Bangladesh has socialism as one of the three guiding state principles, as has India since 1971, Sri Lanka since 1978 and Nepal since 2015. The idea of socialism in Bangladesh's First Five Year Plan was in fact much more radical.
But the idea of socialism is quite ambiguous and can be taken to mean many things, he added.
He said that the private sector plays a significant role for the economy all over the world. Considering the role of the private sector, a social democratic system would accelerate economic growth and ensure the well-being of people.
He termed tax collection as a major issue to establish a social democratic system and said that Bangladesh lagged behind in this indicator.
"In all the countries of the Nordic or Scandinavian model that have a proportion of government revenue to GDP that is near or above 50%, the ratio of public spending is even higher."
Other major West European countries like France and Germany also have nearly similar ratios. The UK and the USA are exceptions in having considerably lower revenue-GDP ratio, but even there the public spending is nearly half of GDP because of high budget deficits, he said.
He also said that there are problems of large-scale tax evasion. But, apart from that, there are structural problems arising from the fact that a large part of the economy is informal and outside the tax net.
India and Nepal have the highest revenue-GDP ratio of about 20%. Bangladesh, having a revenue-GD ratio of even below 10%, it will be therefore quite ambitious to earnestly pursue socialist goals, Dr Wahiduddin said.