Saturday, September 8, 2012

The indispensability of Finance Minister Muhith

Reckless in his utterances, Finance Minister Abul Mal Abdul Muhith has of late become over sure about his “indispensability” in the present government. And for him, public opinion or disaffection of the leaders of opinion has always been dispensable. According to a news-analyst in a vernacular daily, the finance minister has been ruling the roast over four big financial scandals during his current tenure over three years eight months. The first one was the share market scam of 2010, which exceeded in its severity the 1996 scam under the first Sheikh Hasina government. He laughed over the plight of small investors who found their capital and savings wiped out in share-market manipulation by share-sharks. The latter were, however, protected by the Finance Minister from ‘political’ considerations, and no action was taken over the Ibrahim Khalid inquiry report that identified the big shots behind the market debacle, and the break-down condition of the capital market has continued ever since.
Then came in 2011 the Padma Bridge corruption scandal, and in consequence, the cancellation of the World Bank Loan agreement for the project. The finance minister’s crude reaction was to throw the ball back to the court of the World Bank, accusing the international financial institution of being involved in corruption itself and behaving undiplomatically. Later he toned down his loud-mouthed denunciation of the World Bank, but continued sermonising it by public harangues from time to time. With mainly Indian diplomatic help, he has obtained a breathing space for renegotiating the loan agreement with the World Bank. Other financing institutions who joined the World Bank in a consortium to fund Padma Bridge, such as the Asian Development Bank and the Japan International Cooperation Agency have extended their loan agreements for this month and for three weeks of September respectively to allow time for the finance minister to come to terms with World Bank, which is the leader of the Consortium. The finance minister has indeed managed to strike a world record by provoking the occurrence of cancellation of such a big-size project loan agreement as the Padma Bridge.
Another scandal was his speech in the parliament during his presentation of the current budget and in his remarks to the press thereafter. He virtually acknowledged the black-money holders and illicit earners as the movers and shakers of the national economy and sought to lure them to support him bridge the deficit budget and his high-spending leaky pre-election projects. Racketeering got recognition and rewards. Productive trade, industry and agriculture were not only discouraged by the discrimination and injustice meted to honest tax-payers, but also starved of regular bank-financing on account of liquidity crisis as a result of heavy government borrowing. 
It has now been revealed that the culture of wheeling and dealing and illicit practices have so contaminated the banking system, and the “politically appointed” directors of nationalised banks have been mixed up with rent-seeking and money-spinning rackets in such a way that despite bank liquidity crisis, directors and officers of some state-owned banks have been able to funnel out over Taka four thousand crores into private pockets and share the loot. The scandal has badly shaken customer-confidence in the banking system as a whole. But the Finance Minister is simply laughing away the matter. He has blamed the media for “over blowing” the gravity of the scandal and creating difficulties for proper action to be taken, which he said was the recovery of the loot rather than punishing the culprits. He said he was confident of recovering half the amount embezzled, and claimed that probably nearly the entire amount could have been recovered had the media not raised a hue and cry to scare away the wrong-doers. He also bluntly suggested that a sort of systems loss of Taka 4000 crore in bad debt out of Taka 40,000 crores lent by the banks annually (i.e. 10%) was not such a big deal, so to say.
The public, the banking leaders, the business leaders and even the colleagues of the finance minister in the parliament were flabbergasted by such an irresponsible attitude towards “financial crime” adopted by Finance Minister Muhith, who has meanwhile rewarded one of the suspects of collusion in that crime, the Chairman of the Board of Directors of Sonali Bank, by renewing his tenure in that post for an indefinite period. There was speculation that the suspect Chairman and his board members would be eased out of office, if not taken to task, by not renewing their contract when their tenure ended after the first week of September. That expectation has been dashed now. But public demand is becoming louder by the day for punitive action to be taken against all the culprits, including ministers and advisers of the government lending “political” blessings to the wrong-doers, irrespective of high connections or pleas of diminished responsibility. Two important Members of Parliament, Tofail Ahmed and Sheikh Fazlul Karim Selim have already voiced in the floor of the House their strong disapproval of the finance minister’s utterances and inaction. They have urged the finance minister, albeit with mild words but with strong meaning, to institute criminal proceeding, against all wrong-doers without sparing “political” protégés, and also advised the finance minister to talk less. But who cares?
The question, however, looms whether in reality Finance Minister Muhith is indispensable for the present government. Indeed in the reactions from the government’s own set of aspirants for promotion in the financial hierarchy, one can sense bids for outdoing one another in pinpointing blame on Muhith and shifting part of responsibility for the banking scandal from one to the other. In the race to the chair of the Finance Minister in case it falls vacant are Adviser Masihur Rahman and Bangladesh Bank Governor Atiur Rahman. Both have been put on the dock for their “share” or their “failure” in the course of the scandal by other aspirants like Khondaker Ibrahim Khaled (Krishi Bank Chairman) and Farashuddin Ahmed (former Bangladesh Bank Governor). Finance Minister Muhith’s fate may be decided in the course of the month by his success or failure in obtaining assurances from the World Bank for renegotiation of the Padma Bridge loan agreement. For all the diplomatic words of assurance and support he has obtained, one wonders what trump card he may have up his sleeves to be so cocksure in his demeanour.
BY :  Sadeq Khan.