The first deputy chairman of the Bangladesh Planning Commission talks about the country’s economic progress in the last 50 years, the role of the planning commission, the decision to nationalise industries during the early years and why he left Bangladesh and never returned
The last time Dr Nurul Islam met Bangabandhu was in May 1975. He had already taken a year-long leave from the Planning Commission and moved to Oxford, and was back in Dhaka to take his family along with him.
Bangabandhu appeared agitated and was pacing up and down the room. He wanted to know when Islam would return to his role as the deputy chairman of the Planning Commission.
The first ever deputy chairman of the Commission – effectively equivalent to a Planning Minister today – Islam had taken leave in January, on the grounds of 'poor health'. He had already made up his mind to leave the commission in 1973 but Bangabandhu would not let him resign. For Islam, the year-long leave was a quiet way to leave the Commission. He explained to Bangabandhu his health had not fully recovered.
"Jodi tor daak shune kew na ashe tobe ekla cholore (If they pay no heed to your call walk on your own)" a disappointed Banbandhu recited the immortal lines from the Tagore song to Islam.
In the past six years leading up to that day, Islam had become one of Bangabandhu's close accomplices.
A Harvard-trained economist and teacher at the University of Dhaka, Dr Islam was at the forefront of raising awareness about the economic disparity between the eastern and western wings of Pakistan, since the late 1950s.
Islam met Bangabandhu for the first time in 1969, after the latter sought him out for a meeting. Not long after, Islam became a part of the team that drafted the Awami League manifesto for the 1970 elections of Pakistan. He was specifically tasked with mapping out the various manifestations of the implementation of the six-point demand.
When the war ended, Islam refused a meaty role to head the Development Research Center at the World Bank in Washington for a role in rebuilding the country. With the Prime Minister Bangabandhu Sheikh Mujibur Rahman acting as the chairman of the newly founded commission, Islam became its deputy chairman, while his colleagues Mosharraf Hossain, Anisur Rahman and Rehman Sobhan, became members of the commission.
Things however went south pretty quickly for Islam. The newly founded commission had the final say in approving or rejecting development projects, and soon the academics running the commission found themselves at loggerheads fairly regularly with politicians and elected representatives, who felt the commission's role in the running of their affairs irksome.
"In hindsight, I believe it was partly our failure that we did not know how to manipulate the ministers and make them cooperate with us," says Islam, who now resides in the USA, during a recent interview over phone.
Islam narrated a story about how he had frequent arguments with then Member of Parliament and minister MAG Osmani.
"I overruled him a number of times with the help of Bangabandhu. He told me 'I have to do this (river dredging) for my people, who are you?'," recalled Islam.
"Now that I think of it, he was right, wasn't he? What I should have done was to manipulate him, support him in one project and take his support to oppose someone else. That is how the world operates."
"So I admit, I did not have that skill."
By the middle of 1973 the commission had completed the first five-year plan in independent Bangladesh and Islam and his colleagues were ready to leave. Bangabandhu, however, not only refused to let Islam go, but suggested instead he contest the elections and become a people's representatives, which would help him bridge the gap between him and politicians.
"He told me you don't need to do anything. I will go to your constituency, I will address the people and you will just have to sit there. Did I not make Kamal (Dr Kamal Hossain) into a politician?"
"I told him Kamal and I are not the same kind of person."
Now in his 90s, Dr Islam lives with his wife in Potomac, Maryland and Washington, D.C. After Bangabandhu's death, Islam moved to Rome to work at the Food and Agriculture Organisation of the UN, where he served as an Assistant Director General. From there he moved to International Food Research Policy Institute (IFPRI) in Washington.
While he is still remembered and revered in circles of economists in the country, the long absence of one of the early architects of Bangladesh's economy from the public space has meant that a new generation of people barely know his name.
Bangladesh went through 15 years of military rule, experienced a return to democracy in 1991, liberalized the economy starting in the late 1980s and early 1990s, saw the return of the Awami League to power in 1996 under the leadership of Bangabandhu's daughter Sheikh Hasina, averaged 6 percent GDP growth from the 2000s onwards. Dr Islam was conspicuously absent from all these events and periods. Did he ever think about returning to the country?
"The answer to that is an emphatic no. I left because I was not performing my functions at the commission. Also, I left the country in March and Bangabandhu died in August. There was no question of returning after that."
Despite Islam's misgivings about his time at the commission, it was Islam and his colleagues, who, throughout the late 1950s and 1960s, articulated most profoundly the economic discrimination experienced by Bangalis at the hands of Pakistanis. The term 'two economies' – highlighting the disparity between the east and west wing of Pakistan – became a part of the political lexicon of the time. The Dhaka University economics professors – Islam included – were making so much clamour about the disparity as early as the late 1950s that then President of Pakistan General Ayub Khan met the academics over breakfast one day in 1961 and later asked them to present their arguments in paper. Islam was the principal architect of the document, which, unfortunately, fell on deaf ears of the Pakistani authorities in the end. In 1964, Islam was appointed as head of the Pakistan Institute of Development Economics (PIDE) at Karachi, a move the Pakistani authorities acquiesced to, partly, to have the 'noisy' Professor move out of Dhaka. Islam would however manage to relocate the headquarters of the Institute to Dhaka in a few years' time.
In his 2018 book 'Bangabandhu Sheikh Mujibur Rahman Kache Theke Dekha' he reiterates some of the numbers from the time to highlight the disparity between the two wings. In 1951-52 and 1959-60, the per capita government spending on development in West Pakistan was five times higher than East Pakistan. In the early 1960s, only 13 percent of the total private investment of Pakistan entered East Pakistan. Per capita income in West Pakistan was 17 percent higher than East Pakistan in 1949-50, 32 percent in 1959-60 and 61 percent by 1969-70.
So now that we have an independent country, does Islam believe we have been able to fulfill our potential?
"Bangladesh has performed rather well. Rate of growth has been high, poverty has been reduced, all the indicators of development, in terms of social indicators, have improved. We have done very well.
Once we became independent, we no more had restraint on anything, we decided ourselves. Therefore, we did exactly what we wanted. Back then, they decided, and now we decided.
So you can say Yes."
While it is true the country has experienced spectacular GDP growth, the fact remains that we are riddled with a number of economic problems still. Employment has not accompanied GDP growth, inequality has sharpened, corruption is widespread, development projects outstrip their budgets and time frames three to four times over.
"To be honest with you, I have not had a connection with the country for a very long time," said Dr Islam.
"I agree with you 100 percent that inequality has increased. But inequality has increased all over the world. Growth has been related to the serious inequality of growth all around the world and Bangladesh is no exception. The rich has gained and the poor has gained as well; but the rich has gained more than the poor. That is the truth."
On the question of project delays, Islam said he was sure a lot could be done to improve it, but reiterated that his lack of knowledge about specifics did not allow him to make more focused observations.
And what about the Planning Commission? What does the first head of commission think about the role it can play in improving the performance in development project implementation? Is the structure of the commission appropriate to carry out the tasks it has been mandated to carry out?
"During our time, we used to be described as the government within a government, which is true. Since we were integrated with finance, no project could go ahead without our approval," said Islam.
"One of the reasons I left was partly because of the conflict with the ministries. We asked all the ministries to form their own planning and implementation committees to review projects and we would be providing a second look. The ministers however felt they were elected representatives who had to answer to the people while we were technicians."
"I now understand that a planning commission chief has to be a politician. He has to know how to have allies within the cabinet, curry favours, so that you can hold your ground on issues you really care about."
"In my opinion, the finance ministry and planning commission should not be separate entities.
I felt this from the start. My recommendation even back then was if you want to keep these separate, at least have a single minister for both.
Saifur Rahman (and I am speaking outside of political affiliation) was one person who could control both. He was very efficient. Of all the finance ministers, he was a very efficient one."
In the last 45 years, the little connection Dr Islam has had with the country is through the publication of a number of books, including – 'Making of a Nation Bangladesh: An Economist's Tale' (2003), 'An Odyssey: The Journey of My Life' (2017) and 'Bangabandhu Sheikh Mujibur Rahman Kache Theke Dekha' in 2018. A major part of all three books deal with his time at the Commission, the economic decisions taken at the time - including the nationalisation of the industries, as well as significant events that impacted the economy then, including the 1974 famine. The books also carry a lot of fascinating anecdotes from his time spent with Bangabandhu; as well as two other men who would play central roles in the post-Bangabandhu period – Khandaker Mushtaq Ahmed and General Ziaur Rahman. Dr Islam details how he had misgivings about both men while Bangabandhu was still in power.
In many ways, Bangladesh has dramatically shifted from the template set by the first Planning Commission on the direction of the economy, and over the years, Islam and his colleagues have had to fend off a lot of criticism for some of the decisions taken during their tenure. In fact, most of the economic success Bangladesh has enjoyed in recent decades has been attributed to the economic liberalisation carried out in the 1980s and 1990s.
"In the 20 years following our independence, the entire world became liberalised. Government control and government ownership failed around the world. By late 1970s and 1980s, it had started to change. And that happened in our country as well. And that is better. It turned out govt ownership is inefficient. You need government ownership only in specific areas," says Dr Islam.
In that case does he feel the decision to nationalise industries in the post-independence period was wrong?
"There has been a lot of misunderstanding surrounding this. When we became independent, 70 percent of industry was already in the public sector as a large number of industries were under the Pakistan industrial corporation during the Pakistan period. Secondly, we had the Pakistani-owned industries which had been abandoned by the owners after the war. Third, a few Bangalis used to own industries.
The first two constituted 75 percent of industry anyways. These naturally went into the public sector. There was a lot of debate about what to do with the rest and we finally decided since our emphasis was to improve the public sector, let's incorporate the remaining industry. Those who were outside the public sector would not have anyways survived without government subsidy."
"I really cannot comment on the pros and cons of this decision but it was reversed within a year. We set a cap on the size of industry under private ownership. That cap was increased while we were still running the administration. The cap was gradually raised over the years before Ershad finally removed the cap altogether."
"I don't think there has been any long-term effect from this decision."