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WHEN the Awami League-led government set in motion, in February this year, the process of withdrawal—upon review first by district committees and then by the national committee—of ‘politically motivated’ cases, particularly those filed between 2001 and 2008, we commented in these columns that the entire exercise promised more harm than good, not only to the country’s legal and judicial system but also the ruling party. With the government carrying on with the process nonetheless (the national review committee on Wednesday recommended withdrawal of 123 more cases, including those against AL leaders ABM Mohiuddin Chowdhury, also the mayor of Chittagong, Haji Selim and Shamim Osman, and Jatiya Party lawmaker Nasim Osman), we believe reiteration of our apprehension is once again in order.
   It is true that the successive governments since independence have abused the law enforcement and legal system to harass opponents in the political arena and dissenting voices in society. It is also true that many political leaders and activists have been detained, and even incarcerated, on tenuous charges. Overall, there may indeed be a strong case for review of such cases and their subsequent withdrawal. However, there are too many pitfalls and potholes in the path the government has chosen to tread in this regard. First of all, such an exercise could very well lead to a miscarriage of justice as many genuine offenders could slip through along with the real victims of political harassment. Importantly still, it is imperative that the political leaders detained, implicated and incarcerated in corruption charges should prove themselves innocent in the eyes of not only the law but also the people. Hence, they should face up to the charges brought against them and prove their innocence in credible and competent courts of law. Otherwise, if they get themselves acquitted by dint of the governmental review, doubts about their complicity in high-level corruption could linger on in the public mind, thereby compromising their credibility.
   What’s worse, the review process has not been above and beyond controversy, as most of the cases recommended for withdrawal involve leaders and activists of the ruling Awami League. At the latest meeting of the review committee on Wednesday, cases against leaders of the Jatiya Party, a component of the AL-led alliance, have also been marked for withdrawal. Such lopsidedness is bound to give rise to partisan controversy and it has. The main opposition Bangladesh Nationalist Party has already warned of political agitation if cases against its chairperson and former prime minister Khaleda Zia, her two sons and other leaders of the party are not withdrawn. The government, on its part, seems to be taking an increasingly hardened position in this regard. If the trend continues, it could very well lead to confrontation between the ruling and opposition parties which has often resulted in sustained political uncertainty and social disorder in the past.
   Only on Tuesday, the prime minister claimed that ‘those who tried to destroy the country’s democratic process after January 11 political changeover are still active to jeopardise the current democratic process.’ As we have commented in these columns on Thursday, these individuals often look for confrontation between the ruling and opposition parties, among others, to offer as a ‘justification’ for their intervention in the political process and governance. Thus, the government would be well-advised to rethink its move for blanket withdrawal of ‘politically motivated’ cases and instead allow the accused political leaders to defend themselves in the courts of law and secure their acquittal, if they are really innocent. That way, not only the rule of law will be upheld and the leaders retain their credibility but unnecessary partisan bickering and consequent confrontation may also be averted.

Failure to nab Rid Pharma
officials unacceptable

AFTER the law enforcement agencies failed to arrest the five accused officials of Rid Pharmaceuticals, the court has ordered attachment of their properties. The drug administration lodged cases against them after the reported deaths of at least 28 children from kidney failure upon administration of poisonous paracetamol syrup manufactured by Rid Pharma. According to a report published in New Age on Thursday, at least three deaths were confirmed to have been caused by Rid Pharma’s poisonous medicine. The drug administration lodged cases in different districts where the cases were reported for violating the drugs rules. The company’s syrup has been found to contain chemicals used as industrial raw material in the leather industry.
   There was an apparent lethargy on the part of the government to initiate legal measures against Rid officials even after the death of several children. And even when the cases were lodged, it was not on charge of murder for which the company is surely responsible but only for adulteration, for which the punishment is only a few years’ jail and a few lakh takas in fine. We pointed out earlier that there must be a distinction between adulteration and poisoning. This case was quite clearly one of poisoning, far worse than what adulteration might suggest. And there should be no doubt that poisoning children’s medicine should be subject to harsher punishment.
   In this particular case, however, poisoning has actually led to a number of deaths, that too of innocent children. Even if the government were to go through with the adulteration charges, there would still remain the question of doing justice to the victims and their families. To reiterate our position in this regard, responsible officials of Rid Pharmaceuticals should be charged with murder and given strict sentences if and when proven guilty in the court of law.
   As regards the government’s failure to arrest those people, it seems that the law enforcement agencies have other priorities over arresting the five accused. Neither has the government given any indications that it is taking the matter very seriously and is keen on ensuring justice to these people. The signal that goes out from the government’s reported failure in arresting the officials is not that the police or detective branches are incompetent and cannot trace their whereabouts but that the government is not sincere enough to direct its law enforcement agencies without any reservations that these individuals must be put behind bars. If these individuals remain at large, the public perception is likely to be that the government is protecting murderers and that people can get away with murdering children.

THE country’s budding ocean-going shipbuilding industry is the latest sector, after leather goods, to have been struck by the ongoing global recession. As a result of the global meltdown, traditional shipbuilding countries are becoming reluctant to build small ships (weighing less than 2,500 deadweight tonne), which has had consequently opened a new window of export opportunity for Bangladesh. Given such encouraging signals emanating from the global arena, Bangladeshi entrepreneurs were incentivised to enter the lucrative shipbuilding industry.
   In this era of unprecedented globalisation, little thought is paid to how goods move around the world and end up either on our table or wardrobe. Falling transport costs in the 100 years or so before World War II brought close economic integration within and between countries, and this trend continued in the twenty-first century, albeit through large infrastructure investments and breakthroughs in transport and communications technology. Interaction of low transport costs and scale economies helped to induce high trade flows within the same industries and strengthened intra-industry trade, further increasing the competitiveness of the industries.
   However, the main insight from research is that the relationships between transport costs, production location, and trade patterns are not static. It costs about $400 to ship a container to the United States from China, about $800 to ship from India, and $1,300 to ship from Sierra Leone. China’s enormous trade is almost certainly a manifestation of low transport costs which have encouraged countries to relocate production networks to China.
   In the shipbuilding industry, two submarkets have developed differently, albeit at the same time, over the past decades. Tramp shipping is used for large quantities of bulk commodities with shipping prices set in spot markets. On the other hand, linear shipping is used for general cargo on fixed trade routes and on a pre-agreed schedule. Technological progress and institutional changes have helped to reduce prices in both these markets. Greater vessel capacity, in other words lower intermodal transfer costs, has made the shipbuilding industry competitive where ocean freights have been on a declining trend for quite sometime now (see figure).
   The efficiencies generated through specialisation and scale economies in production and transportation have indeed benefited the world, where East Asia, North America and Western Europe account for the lion’s share in intra-industry trade. This is because transport and trade costs influence trade volumes. According to the World Development Report 2009, a 10 per cent increase in trade costs is estimated to reduce trade volumes by 20 per cent. Similarly, for intermediate goods whose import demand is high, movements in transport costs can have large effects on the volume of trade flows and can cause ‘trade friction’ to take place.
   In Bangladesh, in early 2008, orders worth more than $400 million were in the pipeline and although this amount is not significant against the contribution made by remittances and garment exports, the shipbuilding sector can be assumed to have been endowed with a certain level of technical edge that allows it to participate in higher value addition in terms of production. Taking this cue, it could be deduced that while it took around 25 years for the country’s garment industry to flourish and play a key role in foreign earnings, shipbuilding could do the same but in less time (in about 10 years) with higher local value addition, assuming proper facilities and policies are provided towards the development of its backward linkage industries.
   Ananda Shipbuilders and Slipways, the first Bangladeshi company to have exported an ocean-going vessel in early 2008, is the latest victim, as bankruptcy of its major clients has threatened its long-term sustainability. Ananda informs that out of the total export orders of $400 million, four ships valued at $42 million dollars have been cancelled, and orders of another $317 million have been put on hold. To add to the list of victims, at least four upcoming shipbuilders including Khan Brothers, Bengal Electric, Meghrhine and Meghna froze their investment in new yards and slipways after troubles began to brew at Ananda.
   In China, from October 2008 to February 2009, 110 ship orders, totalling 2.74 million DWT, were cancelled while in the first two months of the current calendar year, 13 ship orders were also cancelled. More alarmingly, the steel price index dropped to 95 points in the middle of April of 2009, even 5 per cent lower than that of 15 years ago. However, the decreasing steel price did not raise hopes for the ship manufacturing enterprises partly because steel, as the major raw material, is purchased early. For example, steel used in Q1, 2009 were purchased in Q1, 2008, when the steel price was still high. Taking this cue, one can affirm that major risks are likely to emanate from the buyer’s side who, depending on the nature of the fiscal package that he is likely to be a beneficiary of in his country, may be inclined to breach the contract.
   With the global shipping industries faltering, it is yet to be seen how Bangladeshi shipbuilders respond and whether the local commercial banks will finance such a risky venture or align themselves with the international financial institutions also remains uncertain. As for policymakers, the type of fiscal packages offered in the developed and developing countries may deter export orders, e.g. the American Recovery and Reinvestment Act 2009 has made it mandatory to use steels made in the US for infrastructure and other projects.
   For now, it can only be hoped that our country’s civil society, media and the private sector pay some heed to meeting the demands of the shipbuilders. Policymakers need to craft policies that aspire to accommodate the volatile economic landscape, and subsequently, identify new areas to generate employment and keep the economy growing at a stable level. Shipbuilding industry indeed can provide Bangladesh sufficient fiscal space to carry out domestic reforms and given that it is located at a much higher place in the export ladder, it is expected to generate benefits to its workers, who are likely to be more skilled than their RMG counterparts. To what extent shipbuilders will be able to stay onshore and be able to carry on with their economic activities without receiving any policy level support is a matter which remains yet to be seen.
   Hasanuzzaman is a researcher at the Centre for Policy Dialogue

IN SENTENCING former President Chen Shui-bian for life on corruption charges, a Taiwan court has deepened the divisions on the island between those who support the present holder of office, Ma Ying-jeou of Kuomintang, and the supporters of the opposition Democratic Progressive Party. And these differences centre round one idea: the Taiwanese identity.
   Mr Chen’s is a rags-to-riches story and among his accomplishments has been the first democratic change of power in the Chinese world. The long-ruling KMT, which governed the island since Chiang Kai-shek fled the mainland in 1949 after losing the civil war, was typically authoritarian. Indeed, the transition from a dictatorship was in itself a signal achievement.
   Although most Taiwanese believe there is some substance to the corruption charges, the severity of the sentence on him and his wife – the latter too sentenced for life – and the legal process have been called into question. His wife is wheelchair-bound since a truck repeatedly ran over her in 1985 in what was widely interpreted as an attempt to kill Mr Chen by the then authoritarian regime. He has been held in solitary confinement since last November and changing the panel of judges revoked the bail twice granted him by a judge.
   One of the judges who sentenced Mr Chen was the one who acquitted President Ma of corruption charges during his mayoralty of Taipei. Taiwan’s press is divided between those who hailed the judgement as ‘a milestone’ and others who said the process was flawed. The sentiment of Mr Chen’s supporters was best expressed by the Taipei Times, which said: ‘Chen’s enemies in the KMT will celebrate tonight, comfortable in the knowledge that the man most responsible… for furthering the agenda of an independent democratic Taiwan has been taken out.’
   Mr Chen was the first Taiwan-born ruler of the island and did much to give voice to the urge for maintaining the Taiwanese identity. Relations between Taiwan and mainland China, which claims the island as its territory, had been prickly for most of the eight years of the Chen administration and even Taipei’s relationship with Washington often became strained because the latter was not in favour of provoking Beijing. Although Mr Chen realised that declaring de jure independence was not practicable – sometimes he came perilously close to it – he became a symbol of what most Taiwanese want: the status quo of de facto independence.
   But the Taiwanese tired of Mr Chen’s histrionics and voted Mr Ma’s old KMT back to power in legislative and presidential elections last year. President Ma has been careful in avoiding the explosive political issue of the island eventually joining the mainland. It was a Japanese colony before Chang Kai-shek landed his remaining troops and much of his treasure on the island after the Communists won power in 1949. Since then the Chinese authorities have made the ‘one China’ policy denoting the inclusion of Taiwan as a touchstone in their relations with the world.
   But there has been a dramatic tactical shift in Beijing’s approach to Taiwan since the days it threatened to take the island by force, necessitating the United States to send warships to the region at one stage under the Clinton administration. China is now adopting a softer approach even while retaining batteries of missiles aimed at Taiwan, and welcomed President Ma’s own desire for better relations with open arms.
   The result has been a flurry of activity. There are now for the first time direct flights and shipping links with the mainland. Chinese traders, tourists and officials have been welcomed to the island and while these measures have been popular with the Taiwanese, an undercurrent of unease has crept in over the pace of changes and Beijing’s agenda behind them. The Taiwanese have invested billions of dollars and run factories on the mainland, with a substantial expatriate Taiwanese community residing there.
   President Ma has, indeed, been acting as if he was on a song, until typhoon Morakat arrived, killing more than 600 people, causing uproar over the administration’s slow response. The prime minister has now taken the rap by resigning but President Ma’s spell has been broken. Apart from accepting his prime minister’s resignation, he yielded on another count: agreeing to let the Dalai Lama visit the island to console the island’s victims at the risk of incurring Chinese displeasure. The demand for the spiritual leader’s visit, initiated by supporters of the Democratic Progressive Party, had earlier been rejected by the Ma administration.
   Whatever the truth in the corruption allegations against Mr Chen – both he and his wife are expected to appeal – the court drama has connotations for the future course of domestic politics and the island’s relations with the mainland. Will DPP supporters take to the streets to protest against the treatment meted out to their leader? Can the opposition party draw a line under the Chen phenomenon to retain the support of moderate elements in its support base?
   The larger question relates to Taiwan’s relations with the mainland. Before assuming presidency, President Ma had given a public undertaking that the question of the island joining the mainland would not be on his agenda during his administration, which can extend to a second four-year term. But the concern among many Taiwanese is that the speed and intensity of the economic linkages taking place will smother the island in an unwelcome Chinese embrace.
   Significantly, in criticising the Dalai Lama’s Taiwan visit, Chinese ire was directed at the DPP initiators of the invitation, rather than President Ma, who did not meet the spiritual leader during the visit. Mr Chen, for his part, is reported to have penned a third book during captivity – his first two books topped the popularity charts. President Ma has still to convince his people that the trial and sentencing of Mr Chen and his family were not politically driven to please Beijing.