A day-long seminar on “Bangladesh and Singapore: Developing a Development Mindset” was organised by the Lee Kuan Yew School of Public Policy in conjunction with the Institute of South Asian Studies at the National University of Singapore, on 2 Nov 2005. The initiative was the brainchild of Mr. Lutfey Siddiqi, Managing Director, Barclays Capital The aim of the panel discussion was to exchange insights from development experiences of the two countries. The forum addressed key issues like leadership and politics, culture, values and corruption; public private partnerships and social development; and the role of aid and aid governance. The forum consisted of a keynote speech by Nobel Laureate Professor Muhammad Yunus and involved a panel discussion amongst notable personalities from the public and private sectors in Bangladesh and Singapore. The panelists from Singapore were Mr. S. Dhanabalan, Chairman, Tamesak Holdings, Mr. Tan Gee Paw, Chairman, Public Utilities Board, Ms. Euleen Goh, Council Member, The Institute of Banking and Finance, and Associate Professor Shapan Adnan, South Asian Studies Programme, National University of Singapore; and from Bangladesh the panelists were Dr. Akbar Ali Khan, Syed Manzur Elahi, Ms Farida Akhtar, Executive Director UBINIG and Mr. Mahfuz Anam. We hope the extracts of that discussion published below will generate public debate that will help to produce the required development "Mindset" . --EDITOR

Extract of keynote speech -- Dr. Mohammad Yunus: Professor Yunus opened his speech by inviting the National University of Singapore to extend more scholarships to children from poor background in Bangladesh saying, "it will enrich the learning of international students who can learn about poverty first-hand from those who experience it." Echoing the theme of the subsequent panel discussion, Professor Yunus emphasised the importance of "mindset" in making change happen, He said, "the system that creates a problem cannot solve the problem". He described the journey of Grameen as a series of acts of defiance. He extolled the power of human imagination and creativity in achieving what may have seemed impossible. By way of example, he referred not just to the concept of micro-credit or banking for poor women but also the delivery of solar energy or cellphones to rural areas. He recalled how, in 1995, it was forecast that the total market for cellphones in Bangladesh would be 2.5 lacs in 2005 and how today, there is one mobile phone for every five Bangladeshis! He mentioned, "over 18 thousand Grameen children get student loans -- some of them go for medical or engineering studies, some PhDs. Yesterday, I met someone whose mother is a Grameen member and who is visiting her son who is a PhD professional in Singapore! A new generation coming up." He warned that a mindset of defiance is necessary for us to confront the pace of change ushered in by technology. He said, "Technology is a liquid substance like water-water takes the shape of the container. Do we have the container for future technology or will technology push us with the drift and take us where it wants? Overall, he expressed confidence that the youth of today have the energy, drive and tools to change systems and create new networks. We should not be stuck in incremental thinking when the change around us is non-liner. Refering to the panel discussion, he said, "we don't want to be like Singapore or America. We want to create our own future perhaps by taking the best of everything and adding our own creativity to it. We should not have a poverty of imagination".

Kishore Mahbubani (KM), Dean of Public Policy: Welcome to the Lee Kuan Yew School of Public Policy at the National University of Singapore. We are just three years old but already have an impressive network of alliances with the top universities in Europe and the USA. About 85% of our students are on scholarships it's only a slight exaggeration to say that we have scholarships chasing after students! We welcome more applications from Bangladesh.

This Forum was the initiative of Lutfey Siddiqi, Managing Director at Barclays Capital. It was he who approached us with the concept, helped secure Professor Yunus as the inaugural speaker and put the panel together - so I would like to thank him for that.

Singapore was a society that was supposed to have failed. The fact that it hasn't suggests that there are some lessons to draw. This is the backdrop of our discussion today.

Lutfey Siddiqi (LS), Co-Chair of the Panel: There is a blog entry on the internet from 19th Dec 1996 (11 years ago) where I asked if it's possible to transpose Singapore's development policies to Bangladesh. You can still find it if you google for it. Most people felt that it was an absurd comparison and that discussion did not go anywhere.

Over the years, I've continued to ask the question: if it's not Singapore, who should we benchmark ourselves to ? Should it be Thailand? Korea? Taiwan? Malaysia?... every time, I got a similar response. Each of these countries is seen to be too small or too big or too dense or too sparse or too different in some other way to be used for external benchmarking. And instead of attempting a gap-analysis with some of these countries, we like to think that our problems are unique. We take offence if other people criticise us and we take pride in highlighting selective statistics that make us look better than parts of Sri Lanka, Pakistan, parts of India or Africa.

Today's event is an attempt to juxtapose two apparently divergent countries one which was famously called a “basket-case” and the other which has been referred to as the “little red dot”. We'd like to see if we can extract some universal strands that are relevant in nation-building anywhere and whether we can comprehend things better by looking at them in a comparative perspective. Perhaps it will shed light on some blind-spots.

However, even though I make no secret of my admiration for what Singapore has achieved, I am hoping that this will be a genuine exchange of ideas between the two sides and a real appreciation for each others' challenges. Of course, let's not forget, who has the Nobel prize here.

KM: First question to Minister S. Dhanabalan (SD), What were the challenges faced by Singapore in its early years and what was the leadershp response to those challenges?

Mr. S Dhanabalan (SD): When we became independent in 1965 following the de-merger from Malaysia, we faced problems not very different from what many, if not all other, ex-colonies which became independent faced.

We had problems on the economic and social front - high population growth , high unemployment, poorly educated population all the characteristics of a society largely poverty-stricken. On the political front, there was a contest between the non-communists which were in power and the Communist front, other political factions as well as the non-Communist trade unions, which were very much involved in politics in addition to the communist-front trade unions. All of this was overlaid on a society made up of different races, different religions, and all the communal tensions one associates with such a structure.

So the overall conditions economic, social, political - were not at all conducive, and I think very few expected Singapore to be what it is today, and I think most people thought we would fail.

I don't have time to address all the different policies that we've taken to address the economic, social and political problems but looking back, I am able to trace three principles that were behind all the actions taken. These principles were not enunciated in a document or a kind of manifesto, but these principles, or mindsets, have shaped the policies that we've taken.

The first was of course the political leadership had to demonstrate that it had the moral authority and credibility to take tough actions. It had to prove to the people that it was incorruptible and more honest and more dedicated than the revolutionaries that were leading the communist parties. Even if there was temptation to move away from that, sheer political need dictated that you are seen by the population as dedicated people and that you are not doing something to enrich yourself or your friends. This enabled the political leadership to do things that they would otherwise not have been able to do.

To give you an example, at a time of very high unemployement, we had many people who were street hawkers and “private taxi drivers” without license. Despite the high unemployment at the time, the government moved against these people to eradicate street hawkers. Very few governments would have the courage to do that. They were able to do it and carry it through because people trusted the politicians were doing things for the benefit of the economy and society as a whole.

The second principle especially in the context of developing a development mindset is that there was a very sharp focus on getting things done, not talking about things.

There were no long debates espousing philosphies or ideologies. We had poor housing so build housing. Poor health condition set up outpatients units. Put the hawkers together so they sell hygienic food. We were focused on action-oriented policies. In this respect I see similarities between Singapore and many of the other tiger economies.

They are not all characterised by incorruptibility but they were focused on getting things done - not talking about things. They did not let ideology affect the objective of getting things done.

Our party in power had a socialistic ideology and socialist appeal, many in the party felt things should not be done to enrich contractors, to enrich businessmen. When we embarked on a programme of public housing, one school of thought was that they should be built by people employed by the government and no opportunity should be given to contactors and others for making money from this programme. In fact, you may have read Lee Kwan Yew's book, there were people within the cabinet who were of this view.

But he and others were adamant that they were not here to fight the contractors, or prevent people from making money. We're here to simply get houses built. And what is the best of way of going about it, prevailed. This is just one example of our focus on getting things done rather than trying to establish an ideological point of view.

The third one is in the spirit of what Professor Yunus said we were actually defiant. We get bad western press precisely because of this. We have chosen to do things differently from what was the conventional practice in every area in the west.

One simple example we are well-known for having housed almost all of our population. More than 80% of the population lives in public housing. If you talk to any urban architect, he will tell you that public housing always degenerate into slums. This was the experience with council housing in the UK. However, our poloitical leadership decided to go with it with striking results.

Take trade unions. Conventional practice in the West was that Trade Unions had to fight management antagonistic contest is meant to be the substance of trade unionism. We say that is not the way. Organised labour has to partner with the owners of business. We need more profits to pay better wages. Our focus is on growing the pie which can then be shared out rather than fighting for the share of the pie at the onset.

Another reason why Western liberal media don't like us we defied conventional wisdom in many ways including our attitude towards the press. The practice in the West is that anybody who is good with his pen, has a flair for writing, can propagate his ideas without any sense of responsibility for what the consequences are. Similarly when it comes to political leadership, conventional attitude is that anybody who can arouse or mobilise the public should get elected. This has worked for many countries but we've adopted a different practice. When it comes to political leadership, only people with experience and with a record of success for running organisations can run the country. Many people disagree with this but this is another example of our defiance.

Similarly, we say to the media if you want to make your views known, be prepared to be countered and countered sharply by people who are actually in charge of delivering the result. This doesn't sit well with many people.

There was, from the beginning, a clear idea that the things that the political leadership did should not be patterned in the way that they are done in the west. We should try and structure things in a way that suited our own needs. This is surprising because key people in the political leadership were educated in the west Dr. Goh from LSE was very pragmatic, he shaped a lot of the economic policies of Singapore by just asking himself one simple question: Will it work to deliver what we want to deliver for our people? It doesn't matter whether it achieves socialist ideologies or not.

So I would say that these three principles are key to developing a development mindset: 1. the leadership created for itself the moral authority to take tough actions.

2. concrete, action-oriented programme just deliver results.

3. structure and evolve your own systems, your own institutions and not have them patterned after what we knew to be conventional practices or ideas in the west.

LS: Thank you Minister Dhanabalan. Dr. Akbar Ali Khan, a similar question from your perspective: What were our challenges, what was the psyche of the nation at inception and how did the leadership respond to our challenges?

Dr. Akbar Ali Khan (AAK): As I reflect on the past of Bangladesh and also of Singapore, the fact that strikes me is that the birth of both of these countries was an act of defiance. They should not have been born.

And that reminds me of the story of my uncle who has heart problem and he used to drink and smoke a lot. I asked him, “didn't the doctor ask you to stop drinking and smoking, why don't you give it up?”. He said, “well, my first cardiologist lectured me for five years and then he died. The second cardiologist died after another 3 years. I am now with my third cardiologist”. The lesson is: economic theories don't survive, but nations do. And one of these nations did resoundingly well and the other also did pretty well.

High population density and lack of significant natural resources are two areas in which we resemble Singapore. Bangladesh has had some achievements in the last three decades.

Coming from a low human development category to a medium category in the last 30 years, the poverty rate has dropped from 70 percent to 40 percent, population growth decelerated from 3.6% to 1.5%, child mortality rate was cut by 70%, life expectancy was 37years, now 64 years, rice production more than doubled and per capita income doubled between 1975 and 2006. These are not insignificant achievements.

One thing is that Singapore started with a higher per capita income. It was $2,829 in 1977 when it was $90 in Bangladesh. So Bangladesh started with a low base and while there were frustrations, there were also achievements.

But we differed from Singapore in some significant ways. Singapore won its independence through “Talaq Talaq Talaq” from Malaysia. The birth of Singapore was not as traumatic as what it was in 1971 as the liberation war was very devastating. This was also exacerbated by natural disasters.

But there are two other important areas in which Singapore's trajectory of development was different from Bangladesh's:

1. Singapore opted for an outward oriented globalisation policy. Bangladesh opted for an inward-looking import-substitution policy. This had very significant impact on the achievements of these two countries.

2. The other difference was that Singapore carefully avoided the path of socialism and in Bangaldesh in the initial years we opted for socialism and this was a tragedy for Bangladesh the socialist setup was not by a socialist party but a party which all of a sudden decided to go that way! So this was a sudden socialist turn that Bangladesh took. Because of the nationalisation of almost everything that moved in Bangladesh in 1971 and for a planned import-substitution strategy (those were the two pillars of our economy in the 1970s), it actually choked growth.

Later on, as these policies were changed and the layers of protectionism were rolled away by the irresistible forces of globalisation, growth in Bangladesh started to pick up and socialism was defeated. Singapore has followed this since its birth. In our case, we've followed the opposite for a long time. Now, socialism is receding and private sector has created a space of its own.

In spite of that, there are still ghosts of socialism in the Bangladesh economy. We still have strong trade unionism in some of the public sectors e.g. health and education. In human resource development, we're finding significant difficulties.

Another ghost is the inefficiency of the public sector which occupies commanding heights. In Singapore, there is also a large public sector but the public sector is working. In Bangladesh, it is not working. Government ownership remains in areas where private sector should work. In Bangladesh there is still competition between the two sectors sometimes, public sector institutions crowd out the private sector - doing things no business would do.

For instance, the jute industry is run by the Jute Mills Corporation. There is no relationship between cost of production and price of goods,. In this kind of environment, no private sector institution will go and compete in these sectors. So that is a hangover of socialism.

And the last and most disastrous thing that has happened in Bangladesh is that we destroyed the incentive structure in the public sector. We have low salary and at the lowest level, the difference between highest and lowest salary is low. The system of reward and punishment is missing. As a result we have a Gresham's Law in all sectors: bad people are driving out the good people.

These are the problems as I see them: inefficiencies of the public sector and the incapacity to have an incentive structure where people are working in their interest. Strong trade unionsism in some of the sectors is harming us very badly for example in education. You cannot improve quiality of education.

These are the problems that our leadership needs to address. Sometimes I feel that they do not have the courage to address these. One of the ideas that prevailed in the 1970s is that Bangladesh is poor because God made us poor. But as I look at Bangladesh today, I feel that God has not made us poor. We have made it poor. We cannot build institutions; we cannot run institutions so the poverty in Bangladesh is basically man-made.

KM: I am very impressed by the high level of candour. This is not normal most people try to be diplomatic. Now we will turn to success stories. Mr. Tan Gee Paw, please tell us how Singapore met the challenge of developing its water resources. We actually won the Stockholm Water award for it this year. The man responsible for that is here.

Tan Gee Paw (TGP): I'll pick up where Mr. Dhanabalan left. He spoke about pragmatism over ideology. That's the first thing about developing a development mindset.

Second factor what Prof. Yunus mentioned earlier this morning. That the technologies of the future will shape the way we live, so make sure that you have the container with which to embrace these technologies. It is crucial that we always plan for the future. We should assess what future options we might have, then position ourselves today so that we can take maximum advantage of those options when they become realisable. It requires a lot of long-term planning. The water story is a classic example.

When we separated from Malaysia, we were very dependent on them for water and that could not continue indefinitely. So we started looking at technologies that were available then in the 1970s. There were a few competing technologies not fully developed yet. So we built plants and lined up competing technologies side by side with the objective of delivering drinking water. Some worked, some didn't … but we realised that one of these technologies was bound to succeed. We wanted to position ourselves so that, when the winning technology came to fruition, we were ready for them.

One of them was reverse-osmosis. But for osmosis to work, we needed the ability to collect domestic waste water - not waste water that is mixed up with industrial waste. Therefore, in the 1970s we started a long process of separating our water. It's an effort that took us 25 years that paid off tremendously.

Prof Yunus' point is very valid - make sure you have the container. Singapore was always conscious of that. With the objective in mind, we remain pragmatic, we power on and on until we succeed. You realise that when you are an island nation with limited resources, you have no other way. Whether we are in Bangladesh or in Singapore I think the principles have to be the same. Assess the possibilities ahead of time and position yourself today so that you can take full advantage of them now. The nations that will do well in the future are the ones that can take the fullest advantage whether in water resources, environmental management, economic planning, healthcare etc. I believe this is a fundamental principle.

LS: Ms. Farida Akther, the NGO sector is cited as a success story for Bangladesh. What would be a good success story for civil society organisations in Bangladesh?

Farida Akther (FA): Before I talk about success stories let me take a step back. Why do rich people from Bangladesh come to Singapore? Two or three different reasons: They come for shopping and medical treatment and also for education. That means the education system, healthcare system is probably not working to satisfaction in Bangladesh. We also have poor people coming to Malaysia and other Tiger countries for work…….now, the success of NGOs is that we start from the point of view that people have the potentialities to develop and we don't start from the point that they don't know anything.

I want to tell a story “sholo annnaey michey” which I will translate.

An educated person trying to cross the river with a boatman asks several different questions. Why does the sun rise in the east and set in the west. Boatman cannot answer in a scientific language… the educated person says, “25% , 50%, 75% of your life is wasted. 75% of your life is useless. Suddenly the weather turns and it looks like the boat might sink. The boatman asks, “Sir do you know how to swim no? then 100% of your life is useless”!

Poor people generally know what to do at the time of crisis. Their survival is neither the contribution of public sector nor NGOs. They are surviving on their own capacities. Those NGOs that acknowledge this fact have been successful. Those who try to think of themselves as all-knowing or who have artificial ideas they don't work.

Bangladesh is not only known for floods and micro credit, Bangladesh has large number of NGOs - 20,000 NGOs covering 78% of villages, although coverage of percentage of population is very low at 20%. Civil society is a strong force in South Asia. Whenever there is a WTO meeting or something similar, it is the civil society that comes forward with the latest information and arguments.

In terms of timing of NGOs, it started mid-70s after the famine or even earlier for rehabilitation after the war. But NGOs started to get recognition as partners to the government in the 1980s and more in the 1990s because of pressure from international donor agencies.

My organisation - UBINIG - we focus not only on service delivery but we also take up issues. We talk about the agro - sector, handloom sector, work with weavers and farmers. Bangladesh is very rich in bio-diversity. Bangladesh has 50 thousand varieties of rice. The farmers in our programme don't use chemicals or pesticides, and have regenerated 2,500 varieties of paddy. We also found out that if you don't use pesticides you can ensure that other food sources open up including more fodder which are safe for the cows.

In poor families, if you ask someone who your family members are, they will say, “wife, 2 sons, 1 daughter, 2 cows, 1 hen and 1 goat”. If you don't have food for all of them they will say we don't have food. In the name of modern agriculture we have destroyed food sources for livestock or for fish. Having pesticide-free farming ensures 40% of food sources are available from uncultivated food.

KM: You often hear in the American media - Unleash the private sector and the country will take off. Euleen Goh (EG), what has Singapore done to grow the private sector and what is your take on private-public partnership?

Euleen Goh (EG): Unlike the other two members from Singapore, I'd like to start with my view of Dhaka. I visited Dhaka about 3 years ago. I found it brimming and bustling full of people. I have met lots of Bangladeshis all over the world. I find them to be bright, energetic and hungry for more. As we face an era of countries and businesses fighting for talent, you have huge potential with your 150 million people!

What has drawn the private sector to Singapore? I have three points to make:
1. An open competitive environment with ease of doing business. A report yesterday about the world economic forum global competitiveness survey ranked Singapore 7th in the world for the most competitive country. What does it mean? Great infrastructure for business -- there is a good business-conducive infrastructure; currency convertibility -- you make profits and we're not averse to people repatriating your money; efficient system for tax, of customs; legal certainty; those are important essentials for any business that wants to locate and prosper.

2. Great social infrastructure. I learnt that when a company makes a decision as to where to locate their business, the senior person looks at the country and asks: 'Would I like to live in that country?'. Singapore has a secure environment for families, a welcoming environment - very easy to get work permits here - great education system. In that context, what has drawn the private sector to Singapore, here are some facets about how the private sector has grown together with the country. First is that of investment. Dhanabalan has said what we've done is a very long-term planning approach. In that sense we have encouraged investments into Singapore and through those initial investments spawned a whole lot of economic activity.

Take the example of Shell. Premier oil company. Located in Singapore 100 years ago, 1961 -- invested in an oil refinery. That's the catalyst. Singapore today is the third largest oil refinery in the world. They came here because the government saw an opportunity; incentives to locate here and to help Shell get things done, so that their business was profitable. Out of that one activity that allowed Singapore to be a large refinery centre; from there, a leading role in the energy sector, gone onto spawn other sectors. We now build 80% of jack-up rigs in the world; a leading trading hub; into petrochemicals and agro-products. So investments and co-investments are essential.

Second context is one of knowledge and technology transfer. We encourage a whole lot of technology competence to come to Singapore. A home-grown company I admire very much is Venture Manufacturing. Started by a number of people - former employees of technologies… multinational; came up with their own manufacturing plants. Today they are 9th largest in the world in their sector. There spawns a world-class company acquired through knowledge transfer

3. Third is privatisation. The public-private partnership or PPP model. In many instances the government has led some of the developments as it made sense to do so in the early years. But they spun it off into the private sector; then it's driven to compete commercially in an open arena and as efficiently as possible. Another company I admire much is Singtel. In the early years it was government owned. Today it's the largest listed company in Singapore, fully private, over 50% of revenues come from overseas, and this company competes as effectively amongst any other private companies in Singapore. This company in Singapore drives down the cost of communication and all the consumers benefit from it this is how privatisation benefits the wider society.

The PPP model for Singapore has worked effectively.

LS: I think of Singtel and Singapore Airlines when we talk about private enterprise with growth outcomes for the wider economy. When I think of Bangladesh, I think of Chittagong Port amongst other things. Mr. Manzur Elahi, what is your take on the role of private enterprise in fostering development?

Syed Manzur Elahi (ME): I'd like to touch on what Akbar Ali pointed out - history of the private sector in Bangladesh. One of the reasons we separated from Pakistan was economics. From 1947 to 1971, we were together and unfortunately most of the powers in industry were controlled in Pakistan. Then after the liberation of Bangladesh, the then-government, although it previously had a pro-private sector manifesto, it suddenly decided to follow a socialistic pattern. It was not the private sector but the public sector that was to be the engine of growth.

To illustrate how ridiculous the situation was - I wanted to enter into enterprise. The government said that the project cost of any business couldn't be more than 25 lac taka. What meaningful project could you have with the equivalent of $200,000? So I thought I will start a bicycle parts company. I applied for a loan. The bank manager said, “Please go talk to Member Planning Commission for permission”. It so happened, he was my old university teacher. I asked him “sir, what is the problem”. He said, “We've started a very big agreement with Russia. They will put up a huge bicycle plant which will cater to the entire needs fo the country. So we don't need you”. He went on to say, “Manzur, do you think Bangladesh was created for Bourgeois like you?”

I had to tell you the story because this was the mindset at the time. After 1975, with the change of government, some privatisation started. Today, the private sector is the largest employer. Many of you will have heard the success story of the readymade garment sector. As I say to my friends in the government, “it is because you left us alone that we did well”.

If you want to talk about private-public partnership, the public sector does not have a good track record. It could've done well if the trade unions were not politicised. Trade unions have become belligerent. Political leadership is not clean. So the public sector is not the ideal sector to partner with. It's still bureaucratic, still ruled by the relevant ministries.

Having said that, I have interacted with a few public sector corporations. If enough independence is given to the public sector officials, if there is transparency then they might do well. But since, in an age of globalisation, we need quick decisions, and you cannot get quick decisions from our public sector, you just can't perform. The mindset developing right now is that the private sector will go their own way.

I must also add I feel that Bengalis are not naturally good in business. They are good professionals doctors, engineers etc. That was the generation we belonged to. I was at Dhaka university hostel when a survey was undertaken at the adjacent girls' hostel about the type of person they would like to marry. The number one choice was a civil servant and businessmen came last.

Thankfully, this concept, fortunately, in the next generation has changed. They are, as Dr. Yunus said, defiant. They are branching out as entrepreneurs. What we need is an enabling environment from the government.

Coming to the Chittagong Port as Mr. Siddiqi mentioned it's a major source of bottleneck for us. The previous mayor of Chittagong used to treat it as his personal property. He used to do whatever he wanted to do with it. The turnaround time for a cargo vessel in Singapore is 3 hours. In Bangladesh it was 3 weeks. Now, you don't have three weeks in an export-oriented industry, no-one will give you that kind of lead time. From three weeks, it has come down to 4 days. The point I am making is that it can be done. However, two words why Bangladesh couldn't do well is “political leadership”. Singapore did very well thanks to Mr. Lee Kuan Yew.

KM: You have paved the way for the next topic the most delicate and difficult the topic of corruption. Professor Adnan, What are your views on the links between culture and corruption, the factors that contribute to the creation of corruption and actions required to break the cycle so that corruption becomes the exception rather than the norm?

Prof. Shapan Adnan (SA): There is little to say about Singapore here corruption doesn't lend itself to the Singapore today. Let me try to give you a comparative picture. I've been living here for seven years teaching at NUS. We should remember that there are two parties to any transaction bribe takers and bribe givers. What is the link with culture? Corruption gives rise in a context where lack of ethics is normal it's no longer a matter of shame that is to be hidden.

One simple argument is that poverty breeds corruption. Partly this is true. Civil servants in Bangladesh and ministers are paid very poorly in comparison to the relative pay of the public sector in Singapore. However, poverty is not a sufficient condition. Look at the people who are corrupt in Bangladesh they have amassed fortunes much beyond levels of need and poverty. Why is there a cycle of corruption? It's because of the way the system works. Political office and elections require huge amounts of money. Electoral expenses are costs that need to be recovered. Posts in ministries and civil service are put up on auction. The corollary is that the money has to be recovered and paid back once you are in office. You can see there is a sequential chain….

What can be done? This is a systemic problem it's not just about individuals. We need to reform some of the mechanisms that give rise to corruption. For instance, use of technology or computerisation of processes and data. This reduces the number of points at which bribes can be asked for. If you recognise that corruption is a cycle, if you can stop the first part of that process, subsequent stages can be brought under control. Breaking up large contracts into smaller ones may also be an idea.

Aid-funded construction projects are also part of the story. Perhaps we can bring in people who can design the process to minimise corruption. To conclude we need a systematic procedure of trial and punishment and consistent action taken against both bribe takers and givers.

LS: Mr. Mahfuz Anam - we tend to think of corruption as a moral issue. In Singapore it's also a moral issue but more importantly, they view it as a practical problem that gets in the way of their economic growth objective. How would you describe the situation in Bangladesh? Is there a cultural root to the problem?

Mahfuz Anam (MA): We need to focus an two things in our discussion. One is “mindset”. The other is “leadership”. Two words for me differentiate what Singapore focused on and we did not. And these two words are “geography” and “demography”.

The Singaporean leaders took the location of Singapore as a major asset, population as a major wealth and focused on them. We looked at our assets our rivers and our people - and we neglected them. We have polluted our rivers instead of turning them into producers of resources. Bangladesh is among the highest depository of sweet water. If you think of the fact that future wars will be fought on water rather than oil, Bangladesh is a very rich country! If population is the ultimate differentiator of a country's wealth, then we have 140 million of them. Yet, we did not educate them, we did not professionalise them, we did not give them vision and hope. Imagine a leadership that turns its assets into liabilities. That is precisely what we did.

In the last 15 years of democracy as we practice it, we have created a culture of confrontational politics. In a democracy, the fundamental assumption is that you play by the rules - which is that one party gets elected and that party runs the country for the time allocated while the other party critically monitors its performance and gives the country a better vision. Instead what we have is destructive politics that sprang from an arrogant government and an irresponsible opposition.

In 2001, the ruling coalition got 46% of the vote and the defeated party got 41%. However, the ruling party with only 5% additional votes thought that they had total authority to do whatever they wanted. They not only ignored but also repressed the opposition. This has been the pattern in previous cases too. The ruling party totally oppresses the opposition and opposition finds nothing good with the government.

In a country like Bangladesh, confrontational politics is usually fought on the streets. The opposition calls strikes hartals which mean not only a strike of industry but strike of the whole society. Of course, the government then uses all its force to beat them and repress them in every way. The need to confront the opponents in the streets led both parties to bring criminals into their party fold.

As decent politicians generally do not participate in streets fights and beat up the opponents you need criminals to do that. Soon enough, the political parties makes alliance with criminals. Decent politicians get sidelined and those politicians, who can bring in the gangsters and pay them, rise in the hierarchy of the party. Over the past 15 years, thus, a nexus developed between politics and criminality. Good politicians were driven out by bad politicians whose basic capacity was not how to run the country but to control the streets. All of this happened in the last 15 years. Good politics got substituted by bad politics and bad politics got entangled with corruption.

It was observed that criminals usually crowded the ranks of ruling parties rather than the opposition. To protect them, governments usually overlooked all their crimes. Thus a culture of impunity developed.

Everything is enmeshed into corruption because corrupt practices help street politics which in turn help a party to come to power. Specially it helps to retain power after getting elected. That's how Bangladeshi politics got enmeshed into corrupt practices sustained by a culture of impunity.

The way out of it as I see it is substituting personality-based politics with institutions. Over the years, politics became more personality-based, family-based. The institutions disappeared. Norms and rules disappeared, overtaken by exceptions. We have to restore institutions. Here again Singapore provides us with an example. Yes, Lee Kwan Yew was a towering personality but it's the institutions that he built, the party he built that will sustain Singapore.

I am happy to share with the audience here that we are into some major institution-building exercise right now. The election commission, the public service commission, the anti-corruption commission are now emerging as major institutions. We've just had the separation of the judiciary from the legislature. We hope that it will emerge as a separate, effective institution. We are hoping through this process at the next election that we will have the emergence of politics that are more people-oriented rather than personality-oriented.

KM: I confess I was actually a bit sceptical around the time when Lutfey and I started organising this event. I must say I am pleasantly surprised. I learnt a lot and am amazed by the amount of candour we had. I also heard some amazing first-hand stories. The three points I will take away with me are: Firstly, I will remember vividly what Dr. Akbar Ali Khan said, “God did not make Bangladesh poor, man-made policies did”. Prof Ajit Biswas said the same thing about water when he came to lecture in this same room “there is no shortage of water in this world, just a shortage of good public policies of water. That is the nub of the issue.

Second point is the use of the word “defiance”. The theme started with Prof. Yunus he said, “keep trying, keep defying conventions”, and this message was carried through by other speakers on both sides of the panel. A lot of conventional wisdom on development theory is just plain wrong because most of it assumes that people outside can somehow solve the problem. The problem really gets solved when the people affected take ownership of the issues as demonstrated by the Grameen revolution. My last point is that I am feeling very optimistic at the end of the discussion today. The theme in Bangladesh is that we are improving and things are getting better. There was repeated mention of the scope for young people in Bangaldesh how they already have a different mindset.

LS: It looks like we got the title of our event right Developing a Development Mindset. “Mindset” - not resources or natural endowments - kept on coming up as the single most important factor. Which means that it should be both easy and difficult.

Easy because it's our mindset. It should be within our capacity to change it. Difficult because it requires us to delete beliefs from our hard-drives and re-programme them. There are all sorts of emotional reactions which you get from trying to overturn ingrained beliefs.

Furthermore, some of the issues we spoke about today - corruption, leadership, governance and so on are these symptoms of underdevelopment or are they causes? Or is it a vicious cycle and if so, how can the cycle be broken? Still not sure. Still learning.

I thank everyone for sharing with us the benefit of your knowledge.