The line separating professional identities such as businessmen, politicians and bureaucrats, has become blurred in Bangladesh and is depriving the general public of the benefits of development, said Professor Rehman Sobhan.
An increasing trend of crony capitalism is only helping those in power, he said on Monday during a session titled "Political Economy of Development in Bangladesh" at the 5th Sanem Annual Economists' Conference held at a hotel in Dhaka.
Presiding over the session, Rehman Sobhan, chairman of the Centre for Policy Dialogue (CPD), said that more than 60 percent of councillor candidates in the Dhaka city polls were businessmen.
Business leaders are now taking part in politics and politicians are also operating businesses, he added.
The CPD chairman claimed businessmen, politicians and bureaucrats are collectively taking part in formulating and implementing policies of which they are the biggest beneficiaries.
"There is no research to identify this political economic problem in Bangladesh," said Rehman Sobhan, calling for an in-depth study to be conducted on this topic.
CPD Distinguished Fellow Dr Rounaq Jahan said people are looking for both development and democracy.
"There is no worldwide evidence that a one-party government has been unable to provide proper economic growth. However, a one-party state has no freedom of expression, which may hurt development," she said.
In his keynote speech titled "Deciphering the Bangladesh Development Paradox," Professor Selim Raihan, executive director of South Asian Network on Economic Modeling (Sanem), said that although the economy of Bangladesh is growing faster than expected, good governance has been degrading.
Selim said the government is making deals with the private sector, some of which are open for all to participate in, while others are closed.
"But the private sector is not sticking to the commitment of the deals," he added.
Citing the keynote paper, he also said private sector businessmen are generating "economic rent" – money earned that exceeds the economically or socially necessary amount – from government megaprojects.
They are also following unethical practices to delay the projects and raise their cost, Selim added.
He also said the government fails to collect tax from the businesses due to the failure of political leaders to control business entities.
"This is why revenue generation is lower – below 9 percent of the GDP – in Bangladesh."
Mirza M Hasan, head of the Governance and Politics Cluster of the Brac Institute of Governance and Development, said capitalism had developed worldwide by violating laws, establishing slavery, colonialism and destroying resources.
"Bangladesh is now facing an era of political capitalism where political leaders can dominate the business elite if they want to. But so far, they have failed to do so," Mirza added.
MM Akash, professor of economics at Dhaka University said despite good economic growth in Bangladesh, governance is bad – which is not a paradox but a reality.
He said equal power of the business elite and the political elite could ensure growth and could prevent anti-growth measures. But business entities are not following the rules related to paying taxes, repaying bank loans and whitening undisclosed income.
Dr Shapan Adnan, professorial research associate at the School of Oriental and African Studies (SOAS), University of London, said proper distribution of income could be supportive for further growth.
He suggested that higher salaries and wages could ensure higher expenses and boost the aggregate demand.