Stemming the flow of economic migrants

Bangladesh is a poor country. Yet her citizens are immensely resilient. They are willing to endure inhumane hardships and risk death for a better future. Consider the recent news stories of thousands of smuggled Bangladeshis and Rohingyas stuck on boats in the Bay of Bengal and the Andaman Sea.

They embody the cruelty that men can inflict upon other men. Most of them are economic migrants who are willing to make perilous journeys to other nations for the chance of a better life there. Yet the people who are charged with the duty to look out for them are the ones who seem to forsake these people in the hour of their need.

The reason for this illegal immigration is quite simple: the government is unable to fulfil its promise of providing a livelihood to these people and protecting their interests. Or else, why would they even consider such endeavours?

The state needs to realise that the most valuable asset that it has at its disposal are its people. It is their support that enabled the leaders of Bangladesh to overthrow the tyranny of the Pakistanis. It is their support that helped the leaders come into power. Without them there is no Bangladesh. So, the future of the country is inextricably linked to the well-being of its citizens.

Given that Bangladesh holds regular elections, we can be considered to be a democratic state. In such a state, the people in power are accountable for their actions to the populace. The position of the leader of the state is to look out for its citizens and help them make a life. If the people of Bangladesh do well, then the people who lead the country will also do well. In effect, the incentives of the people and the government are aligned.

Since democracy is here to stay in this country, it is about time that we take it to heart. Our salvation lies in the future. The world offers tremendous opportunities and to succeed, we need to be equipped to take advantage of those opportunities. This does not mean we forsake our cultural and religious traditions, but recalibrate them in light of the global cultural context.

The most effective way to turn the tide of economic immigration is to make Bangladesh a beacon of prosperity. It will take time and a lot of hard work. But that is not impossible. In order to break free from the chains of poverty, the state needs to focus on education. Education and vocational training are key in providing Bangladeshis the tools to cope with adversity and win against the odds.

But the state also needs to create an environment that will help businesses flourish. Regulations need to be further streamlined and bureaucracy needs to be curtailed. And the focus of taxation should move from import and export duties to consumption taxes and income taxes.

Value-added taxes (VAT) have been greatly successful because they account for a substantial part of government revenue. But the state needs to administer the taxes more effectively by broadening the base and reducing the rate. If the rates of VAT are reduced, then people will be less inclined to cheat the system and if the base is broadened then there will be less opportunity for people to evade the tax by re-characterising their goods and services.

In terms of income taxes, chaining the schedule into a simpler form could lead to a major increase in tax receipts. Instead of having multiple rates, it may be more effective to introduce a two tier system whereby taxes are imposed at 15% over BDT 10, 000,000, and anything below that amount is not subject to any income tax. The objective here is to encourage the public to declare their income and make contributions.

Capital gains tax is another way of raising income. There are hundreds of thousands of flats in Bangladesh and they are very expensive. One easy way of raising state revenue is to charge a tax of 10% on the gains that people make when they sell their property or their assets. The tax should not be too high as to deter the people from engaging in the transaction. It should also not be too high because that would encourage people to evade the tax.

Furthermore, it may be more useful to streamline taxes on all corporations. Charging differential rates on different types of corporations creates distortions in the market. These distortions mean that the economy is unable to operate efficiently, which means lost revenue to the state.

When everyone is treated equally, and when the government improves the welfare of its citizens, there will be camaraderie amongst Bangladeshis. When the people think that they have a better future in this country, then and only then will they decide to forgo the risk of boarding a boat and crossing the seas for a future that may never materialise.