The world’s leading economic powers, spearheaded by the United States, are reverting global trade to patterns reminiscent of the colonial era by imposing tariffs to coerce less powerful nations into purchasing their products and investing in their economies, renowned economist Prof Rehman Sobhan asserted. He expressed these views during a session titled “The New International Economic Disorder” at the “Bay of Bengal Conversation” held at a hotel in Dhaka.
According to Prof Sobhan, there is a resurgence of the colonial trade model where countries are pressured to buy goods not based on market dynamics but due to tariff pressures and forced investments. He criticized this approach, stating that compelling nations to purchase goods implies an inability to compete on a level playing field. Furthermore, the US is utilizing tariffs for political leverage, exerting pressure on countries like Brazil, Canada, China, and India concerning their trade relations with Russia.
The economist argued that the current disorder is a misguided response by dominant powers to the ascendance of Asia. As capital surpluses accumulate in Asia, developing nations are less reliant on Western aid and investments that previously influenced their policies. He highlighted China’s emergence as the world’s primary source of official aid and loans, a position once dominated by the US and Western Europe.
In contrast to historical colonial practices that established captive markets through conquest, Asia’s progress has largely occurred within the realm of free markets. However, Prof Sobhan noted that established powers are resisting this shift through market interventions rather than through fair competition. Attempts to bolster US industry by shielding its domestic market, akin to President William McKinley’s policies in the 1890s, are deemed ineffective for the world’s most advanced economy. Additionally, he remarked on the marginalization of the World Trade Organization in this context.
Foreseeing Asia’s ascendancy as the focal point of the global economy, Prof Sobhan predicted that China, surpassing the US in purchasing power parity, is poised to become the predominant economic force. He observed that Bangladesh has already felt the impacts of this disorder, particularly due to economic repercussions stemming from conflicts in the Middle East, which he attributed to Israel, labeling it a “rogue nation.”
Despite Bangladesh’s reliance on a limited range of export markets, its imports and capital predominantly originate from Asian sources. Prof Sobhan urged for deeper integration into Asian value chains, emphasizing the untapped potential for collaboration with neighboring economic powerhouses China and India. He highlighted the need for strategic policymaking and efficient implementation to fully leverage these opportunities and position Bangladesh advantageously in the evolving economic landscape.
Emphasizing the strategic importance of Bangladesh’s geographical location, Prof Sobhan underscored the significance of land connections facilitated by infrastructure such as the Padma and Jamuna bridges, enabling linkages across Southeast Asia, South Asia, West Asia, and potentially Europe. He referenced the Bangladesh-China-India-Myanmar (BCIM) initiative as a framework for regional cooperation which he helped establish.
The 5th edition of the forum, inaugurated by Prime Minister Tarique Rahman, is organized by the Centre for Governance Studies (CGS) and has attracted approximately 200 speakers, 300 delegates, and over 1,000 participants from more than 100 countries.
