Murky politics in a fragile economy

In the development decade of the 1960s, the issue of trade and not aid cropped up because much of the industrialisation was debt-driven and business leaders started talking about increasing domestic savings, investment, production and exports. But over time, the trade gap mostly continued to widen. Tight monetary policy to depress domestic demand and ease external sector pressures resulted in de-industrialisation. Farm production suffered badly due to backward cultural practices and a lack of modernisation of agriculture. Agri-food imports rose by 64 per cent to $3.847 billion during July-December 2023. Foreign investment was attracted with no priority set for development but to shore up dollar reserves, ignoring its overall economic impact. Now, repatriation of dividends and profits invariably exceed foreign direct investment (FDI) inflows, forcing the authorities to restrict remittances to their parent companies.