Politicians’ wealth surge and why nations fail

Economists Daron Acemoglu and James Robinson, in their famous book Why Nations Fail, described the economic history of why some countries get rich and others don't, despite their similar resource bases. Case studies in the book show how different extractive institutions of the government can damage the potential of a country's growth. The same country would be a paragon of development if its institutions were corrected by the political regime.

The Bangladesh Parliament is the most powerful institution in the country since it is the brainstorming hub for lawmakers, who are supposed to shape the nation's fate. Hence, deciding who is nominated to be a member of parliament (MP) is a calculated task. Before deciding on the nominations for the upcoming 12th general election, slated for January 7, 2024, leaders of the ruling Awami League (AL) assured three factors to be considered in the selection process: 1) that the selection would exclude candidates who made their fortunes overnight by abusing power; 2) that energetic candidates of the new generation would be picked, while elder politicians would be encouraged to retire; and finally 3) that the selection would reward the honest as well as locally engaged candidates while abandon members with sour scandals.

The food minister's wealth rose as high as 87 times and his annual income rose 157 times over the last 15 years. How did this happen? If his legitimate salary and other government perks cannot explain this growth, must this not be wealth extracted by abusing power? His annual income doubled over the last five years alone, when the country's economy lived through a pandemic and other global shocks.

Oddly, the ruling party compromised on all three counts, frustrating even many party loyalists. It endorsed MPs and ministers with nominations even though many of them are notorious for having made their wealth overnight. Many senior politicians of the pre-independence era should have retired by now, but they still crave power. These tendencies are conducive to making a nation fail, as history suggests.

Newspapers have reported on a bunch of nominees who amassed their wealth at a rate that is totally inconsistent with the state of the economy. The food minister's wealth rose as high as 87 times and his annual income rose 157 times over the last 15 years. How did this happen? If his legitimate salary and other government perks cannot explain this growth, must this not be wealth extracted by abusing power? His annual income doubled over the last five years alone, when the country's economy lived through a pandemic and other global shocks.

"Health is wealth" gets a new meaning when we look at the growth of our health minister's wealth. Over the last 15 years, his wealth rose by more than 10 times and annual income jumped by almost 12 times. The ICT state minister's cash balance increased 12 times. Meanwhile, the income of Dhaka South's former mayor increased almost 28 times over the last eight years, from Tk 41.74 lakh in 2015 to Tk 11.53 crore in 2023. One top-ranking AL leader from Jamalpur, who once led the jute ministry, exhibited an increase in wealth of 82 times and an increase in assets of 122 times over the last 15 years.

At least we should thank the Election Commission for sharing information about politicians' surge in wealth. But with the parliament turning into a club for tycoons and defaulters, this provision of disclosing information about candidates' income may come to an end someday since it embarrasses the superrich and powerful. The signals most candidates are sending are diametrically opposite to the prime minister's message of zero tolerance against abuse of power to quickly gather wealth. This is not the parliament of which Bangabandhu had once dreamed. Nor does it lend credence to intolerance towards corruption and fighting income inequality in the future.

What all this suggests is the unbridled rise of moral hazards that engulf a nation and force it onto the path which leads to all areas becoming massively politicised, resulting in the youth being eager to become politicians for the wrong reasons—eventually dooming the country to failure.

Dr Birupaksha Paul is professor of economics at the State University of New York at Cortland in the US.

Views expressed in this article are the author's own.

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