DT e-Paper 29 March 2017

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DT 12 Editorial WEDNESDAY, MARCH 29, 2017 TODAY Brexit through the looking glass Interrelationships and mutual selfinterest between the EU and UK are too large and run too deep for common sense to be kept at bay for much longer PAGE 13 Demystifying transfer pricing MAHMUD HOSSAIN OPU Given that transfer pricing is a new subject for the Bangladesh tax authorities, our tax department may consider investing time in the skills development of the officers PAGE 14 Work in progress Keeping up with the Modi wave This is the genesis of the famous and much talked about Modi wave, comprising explicit development and implicit Hindutva PAGE 15 Be heard Write to Dhaka Tribune FR Tower, 8/C Panthapath, Shukrabad, Dhaka-1207 Send us your Op-Ed articles: opinion.dt@dhakatribune.com www.dhakatribune.com Join our Facebook community: https://www.facebook.com/ DhakaTribune. The views expressed in opinion articles are those of the authors alone and they are not the official view of Dhaka Tribune or its publisher. When it comes to labour rights, Bangladesh has come a long way. There is no doubt that the Rana Plaza incident was one of the worst industrial accidents in history, and that it exposed many flaws within our industries, especially our RMG sector. But, since then, industry stake-holders have worked tirelessly to improve working conditions. Which is why the EU’s threats of excluding Bangladesh from the Generalised System of Preferences based on the current conditions of our labour rights is unwarranted and completely unnecessary. With Bangladesh currently enjoying duty-free access to the EU under the Everything But Arms (EBA) preference tariff scheme, losing this would be an immeasurable blow to the Bangladeshi economy. Expelling Bangladesh from the GSP would translate to a 12% tariff on exports to the EU. To remain competitive in the global market, it’s crucial that Bangladesh keeps its prices low. Bangladesh and its government understand that labour rights are important. In light of the recent Ashulia protests, there is no denying that much still needs to be done, with workers’ wages still a particularly contentious issue that we have yet to find a workable solution to. But it is not up to the EU to govern the way we do business. Such an attitude goes against the very nature of free trade. We understand that the recent delegation from the EU seeks uniform labour standards in the country, but that shouldn’t mean that Bangladesh be threatened into submission. Labour rights are a work in progress, as it has been in every country, and the Bangladeshi government has been moving to ensure the continued development of the nation, labour rights included. With over 60% of our garment exports going to the EU, this is not a market where Bangladesh can afford to lose its current position. Instead, the EU would do well to work patiently and constructively with stake-holders to ensure that worker rights are protected. After all, working together is the only way we will see any real progress. The Bangladesh economy has been moving at breakneck speed to ensure the continued development of the nation, labour rights included
Opinion 13 Brexit through the looking glass The clock is ticking. Time to get real DT WEDNESDAY, MARCH 29, 2017 • Niaz Alam Be careful what you wish for. This seems to be the only lesson possible to draw nine months on after the UK’s referendum decision to leave the European Union. In the very week Theresa May formally triggers Article 50 to start the process of withdrawal, UKIP -- the fringe yet influential party that inspired Brexit -- bites the dust in Westminster as, with all irony intended, its sole elected MP has declared he will now sit as an independent. Not that UKIP is entirely without electoral representation. Just that most of this lies in the 24 seats it won in the European Parliament in 2014. Come the actual day the UK actually leaves the EU, all these seats will be abolished. Nigel Farage’s included. The list of Brexit’s political victims is a long one. David Cameron obviously. Jo Cox, the MP murdered a week before the vote, most sadly. Not to mention various Brexiteers who either hadn’t wanted to win or ended up sidelined by a new prime minister who had campaigned to remain. Spare a thought too for the Bangladesh Caterers Association, whose leader campaigned for Brexit in the belief it would make it easier to import chefs from South Asia. Despite him being on the winning side, this looks less than likely to happen. Hardly surprising given the caterers’ aim depends on the equation “more xenophobia + less immigration = fewer Europeans/ more Asian immigrants” making logical and political sense. Yet, similar ideas have long been encouraged by a mixed bag of libertarians and rose-tinted fans of empire prominent among Brexit advocates. Britain “freeing” itself from Europe “will open the UK to the world” is one of the older, and superficially more attractive, stands of Eurosceptic thinking in right-wing circles. Such strands largely got blown away almost immediately the Leave result was announced. However individuals voted, media and public opinions alike tended to quickly agree to mainly attribute Brexit to desires to “take back control from Europe” and “control borders.” Overnight, the hitherto plausible option of the UK remaining in the Single Market after leaving the EU, suddenly but seemingly decisively, became dead in the water. Less obviously, the referendum result also became a stick with which to bash Jeremy Corbyn’s tenure as Leader of the Opposition. While Cameron walked away to a quiet retirement, Corbyn got the full trifecta. Remainers complaining he did not campaign hard enough even though he was not responsible for the result. Leavers criticising him for being a Remainer, even though his position was lukewarm and much the same as Theresa May. And to boot, a divisive and wholly unnecessary leadership election helping push the Labour party down in opinion polls. Most seriously of all, Labour’s problem is not that its MPs have been unwilling or unable to find Interrelationships and mutual selfinterest between the EU and UK are too large and run too deep for common sense to be kept at bay for much longer a more popular alternative to Corbyn, but that Theresa May has stolen Jeremy Corbyn’s best clothes. Being softly spoken, appearing unassuming. Not being (as) obsessed with hour by hour headlines as the Blair, Brown, Cameron governments. Generally being a grown up. Theresa May can do that in spades. If polls are to be believed, all she has to do to guarantee winning next time, is to deliver Brexit. Everything else is mere timing. Events and bad economic news could get in the way of course, but such is true come what may. As is true also for the Scottish government talking itself into pushing for an early rerun of the 2014 Scottish Independence referendum. Theresa May might What does the ‘divorce bill’ mean for the UK? be gifted new opportunities to look strong. Paradoxically, given her style, Theresa May’s biggest advantage could just turn out to be spin. In politics, perception is (nearly) everything. Spend months letting the media tell everyone how complicated, lengthy, and difficult it will be for the UK and EU to negotiate an orderly Brexit, as most in Brussels and London tend to agree, and everyone will look good when a deal is done. Until now, the wait for Article 50 has kept cheap talk and encouraged much hot air. For sure, some decision makers in the EU really do want to set an example and ‘’punish’’ the UK “pour encorager les autres.” And it is true there is talk of a 50 billion pound “divorce bill” being demanded of the UK by the EU. As it is also that politicians all across Europe, not just the UK, have blithely talked about the millions of EU citizens living and working in the UK, and vice versa, as being “bargaining chips’’ in forthcoming negotiations. But the clock is ticking now. Time to get real. When the EU has a large trade surplus over the UK (and EU companies such as BMW own many of the UK’s leading exporters) talk of tariffs and punishments makes no economic sense. Interrelationships and mutual self-interest between the EU and UK are too large and run too deep for common sense to be kept at bay for much longer. Likewise, it is pure politics, fiction, and grandstanding for London and Brussels to collude in pretending large numbers of EU citizens living and working in other EU states, all of whom are meant to have equal rights under European law, are at risk of having rights taken away or even being deported. Yes I know. Nationalism, xenophobia, racism, and indeed, fascism in all its forms are on the rise and global politics is in a disturbing phase right now. But, assuming European economies muddle on as they have, and the EU remains largely intact, it’s scarcely credible to imagine European countries demanding stringent visa requirements of UK nationals to stop them visiting on post-Brexit holidays, let alone engaging in tit for tat expulsions of each others’ citizens. Even in a world with President Trump. When it comes to immigration, the unspoken truth, which deep down most people appreciate, even after debate has been poisoned by racist rhetoric, is that there is only one guaranteed and practical way for a rich complex economy in Western Europe, to reduce immigration -- by becoming less economically attractive. The paradox of course is that recession and economic loss are nobody’s idea of a vote winner. As for that 50bn pound demand from Brussels? It sounds steep at first, and could just be bluff, but if you bear in mind the UK government currently pays 13bn pounds a year, it’s around four years of gross subscriptions. REUTERS Given the UK is implicitly committed to giving two years notice and is part of funding many programs which either demand transitional arrangements or which it may want to continue being part of, and this too might be more a matter of perception and presentation. Truth be told, compared to the bigger picture of global challenges of climate chaos and inequality, faced by the world’s economy and people, negotiating a smooth Brexit is a breeze in the park. Even for the UK, in the long run, it is likely to make far less difference than say, Scotland becoming independent, or the island of Ireland voting for unification. More apocalyptic scenarios, especially for the UK as the smaller party, are available (POTUS related and otherwise). In more likelihood though, and however much high powered negotiators will be loath to admit it, much of the future of impending Brexit, is going to depend on both the EU and UK keeping a lot of laws, rules, and relationships much as they already are. The more things change on the surface, for good or bad, the more they may remain the same. Plus ça change. • Niaz Alam is a member of the Editorial Board of Dhaka Tribune. A qualified lawyer, he has worked on corporate responsibility and ethical business issues since 1992. He sat on the Board of the London Pensions Fund Authority between 2001-2010 and is a former vice-chair of War on Want.
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DT e-Paper 29 March 2017

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