Neoliberalism, Crony Capitalism, and the Political Economy of Resource Extraction in Bangladesh

Wednesday, 18 July 2018: 16:06
Oral Presentation
M. Omar FARUQUE, Department of Sociology, University of Toronto, Canada
In a recent study, a Bangladeshi sociologist has argued that neoliberal transformation of Bangladesh’s economic policy has replaced social contract between the state and society with crony capitalism. This is the departure point of this paper where I will examine this assertion with an analysis of the political economy of resource extraction. I will use the development of the Barapukuria coal mine in the northwest region of the country as an empirical case. I consider that the prevalence of crony capitalism is not a new phenomenon in Bangladesh. It has merely been strengthened with the institutionalization of neoliberal agenda of Bretton Woods Institutions through their Structural Adjustment Programs and other loan conditionalities. Scholars attribute the rapid growth of crony capitalism as a dominant mode of business-politics relations to the politics of military regimes. However, the trend did not change after the advent of ‘formal democracy’ in the early 1990s. I suggest that we can make a nuanced sense of this continuing trend by drawing on the conceptual framework of ‘extractive institutions’ developed by Acemoglu and Robinson. Instead of connecting crony capitalism with neoliberal policy agenda, I pay attention to the quality of institutions that perpetuate it and emphasize how it contributes to ‘resource curse.’ I argue that illiberal democracy is intimately tied with crony capitalism in Bangladesh. The result is the plunder of precious mineral resources for the benefit of a few politically well-connected power elites. The dominant narrative of economic growth and development obscures this institutional problem as it requires major overhauling of the system that will threaten the existing political order and the sustenance of the status quo.