Sunday, 19 August 2018

Deep rooted rent-seeking culture

Syed Ishtiaque Reza

Syed Ishtiaque Reza , Editor-in-Chief of GTV & : A highly placed bank official recently showed me his one-day file on his table full of applications and request letters from various organizations (political, non-political and professional bodies) seeking donations and sponsorships. Banks, insurance companies, non-bank financial institutions and bigbusiness houses and individuals are burdened with such letters.
As these organizations do not have any source of earning, they depend on donations and sponsors. In most cases, these donations and sponsors are realized through coercive process. Some funds are given with definite purpose. An individual or a group may be giving a donation seeking benefit in lieu of the differential favour that he has given to an organization. This is rent-seeking.
Our society is largely a rent-seeker one. We have a long history of rent-seeking culture under which any initiative put in place with the best of motives for the uplift of the masses is largely hijacked by the privileged group. Only a few months ago the government went for a scheme to sell rice at Tk10 per kg. The scheme was especially designed for hardcore poor. But unfortunately, under the scheme, rice worth millions of taka disbursed was, in fact, misappropriated by the influential people in connivance with the political leaders and high-ups in the local administrations across the country. Rent-seeking in different forms flourishes amidst claims of public service and welfare.
Generally, it is considered that rent-seeking culture helps a segment of the elite to twist the existing laws to serve their interest, but it is now being emulated by all sections of the people of small means.
President of a professional body said he has to manage Tk40 million a year to run his association. The expenses include staff salaries, annual picnic and ifter funds, subsidized food in the canteen, cultural programmes and many other functions for the members. As the association’s earning is not enough, the office bearers have to seek support from businesses, financial institutions and rich individuals giving assurance that they would, in return, work for them.
We have a perception that bribing is the only one rent-seeking habit. Definitely, when an official seeks bribe, it is rent-seeking. But when a political party or politically-linked organization or professional body gets donations and sponsor regularly, it is rent-seeking.
Law is one thing and economics is another. When transfer of hand of resources is for contributing to the production process and value-adding, it is not rent. But transfer of resources on account of fulfilling mutual interests is rent.

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