Vol. 5 Num 1005 Thu. March 29, 2007  

Following in Mahathir's footsteps

We have written books and analyses on how to get the "real development of Bangladesh" started, but these haven't amounted to a set of "workable" action plans. In the meantime, an average Bangladesh produces a miserable one dollar a day income and thus lives a sub-standard sub-human life.

If we let this Bangladeshi stand face to face with an average citizen of an advanced country having a rate of productivity equivalent to one hundred or more US dollars a day, the former will look much smaller in all senses of the word compared to the latter.

In the past, we advocated a fair and just tax structure and a favourable production environment as a key to starting the much-needed economic development. But, as it appears, we do not have time to fool around with such an important issue -- the lives of 140 million people are at stake. So, we now recommend Bangladeshis to follow in earnest the footsteps of Mahathir Mohammad of Malaysia. The steps are as follows:

  • Pick an automobile like Toyota Corolla or Ford Escort or an equivalent and give it the name "Doel-1."
  • Install a 300% import tax on automobiles imported to Bangladesh.
  • Design and build the automobile successfully within the next ten or so years.
  • Sell them in domestic market ("demand" viability question to be addressed in a future article).

In industrially advanced countries, each citizen on the average owns more than one automobile. If we assume a demand of one automobile per Bangladeshi, then it represents a domestic demand pool of 130 million automobiles. Suppose Toyota Corolla or its equivalent normally costs 15,000 US dollars. At 300% import tax, the price of Toyota Corolla (or its equivalent) will rise to 60,000 US dollars, a level that will be beyond the reach of most Bangladeshis.

Let us assume a fraction of 130 million Bangladeshis, let us say 30 million, will still be willing to pay 60,000 US dollars to purchase imported automobile over a locally produced automobile, probably priced at about 8,000 US dollars. That leaves us with an assumed local demand of 100 million automobiles.

If we want to fulfill one round of such a magnitude of demand, let us say within a ten year time period, it will require a production rate of 10 million automobiles per year or about 28,000 automobiles per day. It is an 800 billion US dollar or 56 trillion taka (at the rate of 70 taka = 1 US dollar) business proposition over a ten year time period. Then there will be linkage effects on the entire economy, especially on the agriculture sector, which will see a proportional rise in productivity via automation.

A focused and directed undertaking such as the Doel-1 project is most appropriate for agriculture-dominated Bangladesh because increased productivity in agriculture to a level realized in advanced countries can be initiated and sustained only by progress in industrial sector. The Doel-1 project and its technological spin-offs are expected to induce true agricultural revolution in the country, coupled with a Lewisian Turn, a healthy migration of workers from agriculture to industrial sector.

We have determined above that we need to produce about 28,000 automobiles a day in order to satisfy a single round of demand of one automobile per Bangladeshi. If we assume a single factory can produce one automobile per hour and operates a complete 24-hour round the clock in several shifts, then we will need to establish about 1,200 such factories scattered throughout Bangladesh. It means we need to establish about 18 such factories in each district of Bangladesh, a sizable undertaking.

The country will surely head towards where Malaysia is today if we are successful in executing the undertaking. Other socio-economic indices, such as, education and illiteracy, population control, poverty, women's issues, corruption, and so on, which have drawn so much discussion and debate, will also get proportionally alleviated.

Thus, the undertaking may actually be called a national-level solution. Furthermore, the project will not destroy environment. On the contrary, to quote Abu Abdullah, technological capabilities created through this undertaking and spin-offs thereof will help solve environmental problems.

An undertaking of this magnitude will call for consensus on a national level. It means all prominent political parties will have to agree to detach this undertaking from the current political process. This would constitute a test of patriotism on the part of the leaders of all political parties who will have to see beyond the current political conflict that only centers around gaining access to so many thousand crore taka worth of annual fund generated from commission, licensing and various rent-seeking activities. Country's current electoral process only allows mere change of hand in securing access right to this parasitical fund that has seldom anything to do with national development.

The dominant political parties, temporarily setting aside their differences, will have to appoint an automobile tsar along with a cell reporting to the tsar. The "auto cell," as it may be designated, must be given highest national priority and should be supported and protected by all branches of law enforcement, including armed forces.

The automobile cell must be given a free hand and free access to any resource needed to make the "Doel-1 project" a success. The auto cell may consider Malaysia and Japan as mentor countries and can seek technical assistance, if needed, from these countries.

Mahathir Mohammad adopted a so-called "Look East" policy, which meant to seek guidance and assistance, mainly from Japan. The Bangladesh auto cell may similarly adopt a "Look to Malaysia" policy and may plan to purchase all heavy machineries and automating capital goods, needed to make Doel-1 successful, from Malaysia and Japan.

The alignment with Malaysia and Japan will invoke opposition from European Union and North America, which can be tackled only if Doel-1 project has complete and unequivocal endorsement from the leaders of all prominent political parties. On the question of appointing the right individual as the auto tsar, we need to recruit someone who has the passion, capability and relevant know-how to get the job done.

If an individual of right calibre, and depth and experience is not available inside Bangladesh, a seasoned and motivated Bangladeshi expatriate can be recruited from England or North America. If necessary, the identity of the auto tsar may be kept hidden from public eye. We should remember this is not a matter of cheap sentiment. It requires no sacrifice from anyone. The sole aim is to make Doel-1 come to reality.

Dr. Ashraf Ali, D.Sc., MBA is at Bangladesh Development Initiative, Seattle, Washington, US.