Padma Bridge with Own Finance: A Great Opportunity for National Unity
Well-thought-out reliable infrastructure plays a pivotal role in economic development. Studies around the globe have founda positive linear relationship between infrastructure and economic development. Such relationships work through gross domestic capital formation, employment generation, trade, and human capital formation.
Good infrastructure enhances productive competence and improves the competitiveness of a country. Consideringthese aspects, eminent economist-Professor DrAbul Barkat had published a booklet from Bangladesh Economic Association titled "Padma bridge with own finance - a great opportunity for national unity"on 19 July 2012.
It was a well-researched long-sole-paper by Professor Barkat presented at the National Seminar titled "Padma Bridge with Own Finance" organised by Bangladesh Economic Association on 19 July 2012- immediately after the official cancellation of the Padma Bridge Loan-Financing by the World Bank and other donors. The research work of Professor Barkat was published as a booklet on the day of the national seminar and appeared in the national dailies in July 2012.
Barkat forwarded empirical and logical arguments in favour of possibilities of construction of Padma Bridge with own finance; he has shown twelve broad sources of finance- both domestic and foreign currency, both interest-free and interest-bearing sources of finance; and argued that withdrawal of World Bank is a blessing in disguise. Professor Barkat forwarded the argument with all possible empirical evidence that it is possible to construct four Padma bridges with domestic finance. This book is a testament to Professor Barkat's inherent high patriotism backed by the academic rigour of a real pro-people public intellectual in the face of vehement opposition from the mainstream academia- political, economic, and social. However, the ordinary people of Bangladesh expressed their unequivocal consent to Barkat's views.
All these happened in 2012. After a long about ten years from then, today in 2021, the dream of having a self-financed bridge over the mighty Padma river is a reality. The last span of the Padma Multipurpose Bridge is recently installed; the railway is about to be completed.The bridge is expected to be in operation in the next year- 2022. This long-awaited bridge carries significance for Bangladesh on several accounts.Professor Barkat termed the construction of Padmabridge with limited resourcesas 'Made in BangladeshModel'from 'Development as Movement'.
Under the farsighted leadership of Bangladesh's Prime Minister Sheikh Hasina, the Padma Bridge is the outcome of the Bangladeshi people's dedication.Obviously, the construction of this 6.15-kilometre-long double-deck bridge has enhanced both the image and confidence of Bangladesh.
Just released is the second enlarged version of his book titled'Padma bridge with own finance - a great opportunity for national unity:When 2012-research became visible truth in '2021'.The publication date of this book is 26 March 2021-theIndependence Day of Bangladesh. In this enlarged version and what was there in 2012, Dr Barkat has added a new invaluable Chapter dealing with a few politico-economic historical issues of vital import. These include, among others, the following: What did the opponents say and why- against own-financed Padma Bridge? Why did they oppose it in 2012? What was the connection between opposing and serving the interest of the global triad- the World Bank, IMF, and WTO? Was there any connection between opposing in 2012 and the upcoming national election of 2014? In a word, Barkat exposed the actual opportunistic traits of mainstream neo-Liberal academia serving the global imperialistic power and their local agents.
When World Bank cancelled its $1.2 billion credit for the bridge based on an unfounded ground of so-called credible evidence of 'corruption conspiracy', then Professor Barkat argued, "The cancellation of the loan by the World Bank is both unethical and purposeful". He, however, forwarded strong argument that "this cancellation of World Bank's loan is a blessingindisguise for Bangladesh. Because it has created an opportunity to build and consolidate scope for building and consolidating national unity".
He argued, "It is possible to start the construction work now. Still,more emphasis should be given in collecting funds from interest-free sources of finance".Economist with honestcourage, Dr Abul Barkat, showed that overTk.98,000 crore can be raised from 12 possible sources, including migrant workers and non-resident Bangladeshis to build the6.15kilometre-bridge. He proposed keeping aside 1.25 percent of the country's foreign exchange reserve each year to finance the bridge's construction. He also suggested boosting remittance inflows through formal channels by plugging in the existing loopholes to prevent inflows through informal ways.
Professor Abul Barkat mentioned how to attract foreign currencies from the NRBs to float bonds at an interest rate higher than the savings rate offered by banks in advanced economies. Foreign sources may enable the government to raise funds equivalent to Tk 9,275 crore.
The rest of the funds could be collected from domestic sources that include floating pension funds, Padma bridge bond, collecting black money, bringing back laundered money, andchannelingsunutilisedfunds under the annual development program.He has suggested many other possible ways, including increasing tax on tobacco products, strengthening drives to bring rich people more under the tax net, austerity measures in government expenditures, floating initial public offerings, and imposing levy and surcharges.
To construct the bridge successfully ensuring full transparency- 'People's economist'- Abul Barkat suggested the government form three high-powered committees: Integrity Committee to be headed by the Prime Minister, Financing Committee, and Technical-Engineering Committee. The latter two committees, according to him, should be comprised of ministers, lawmakers, experts and representatives from civil society.He also proposed forming a public limited company to encourage local industries to make machinery and raw materials to construct the bridge.
Barkat argued that the weighted average cost of capital to build the bridge by taking finance from multilateral lenders led by the World Bank would be 50 percent, andthe same would beonly 7.63 percent in the case of own funds. Clarifying cash flow analysis, he said the construction cost for the bridge could be recovered in 30 years. He put forward forcefully with full confidence that own- financed Padma bridge will entail many other benefits, including image building, confidence building, multiplier effects, spillover effects, innovation effects, and so on.
Infrastructure generates economic benefit for people. In other words, benefits from infrastructure are not automatic, and theycannot work in isolation. The Padma Bridge is estimated to increase the GDP of the country by more than one percent. About three crore people across 21 south-western districts of Bangladeshwould get the benefit of connectivity. These districts would getlinked with the growth centres through better connectivity.
It wouldincrease theopportunities for employment and income. The transportation system would improve, andthe movement of people would ease. Supply chains within the country would get impetus. Goods and services would move smoothly from one place to another. People from the south-western parts of the country are also expected to have better access to education, healthcare and other services.
In general, home-grown research is essential for a nation. Public intellectual and political economist- Professor Abul Barkat leads the way of home-grown research in Bangladesh - particularly on building decent society-decent economy-decent state, development and Constitution, inequality and multidimensional poverty, the economics of religious fundamentalism and associated militancy, agrarian-land-aquarianreforms, rights of indigenous peoples and minority community, the impact of COVID-19 on economy and society, politics and economics of local governance and decentralisation, globalisation and migration governance, public health, public education, women empowerment and child development, people with disabilities, linkages between poverty and arsenicosis, electrification and development, population politics and policy, tobacco taxation,the economics of inadequate sanitation.
He is the forerunner social scientist in Bangladesh who made a significant contribution in understanding the possible destiny of Bangladesh had Bangabandhu been alive. The unparalleled challenging research on Padma Bridge with its own 'finance'by Abul Barkat contributes to making a prosperous Bangladesh.
Finally, as Bangladesh is striving towards reviving the economy from the fallouts of the Covid-19 pandemic, the Padma Bridge wouldhelpfulfilthis effort to anenormous extent. This bookprovides aprofoundinsight into understandingthe potential capability of our nation applying home-grown development philosophy. The lessons learnt from the analysis of this book also have reverberation for future policy formulation and implementation towards realising the spirit of liberty and independence.
Reviewer Shishir Reza is a Environmental Analyst & Associate Member, Bangladesh Economic Association (BEA) and Matiur Rahman is a Research Consultant, Human DevelopmentResearch Centre (HDRC), Dhaka.