Mapping the path to a growth-focused economy

One key recommendation for the new Bangladesh is to stop placing excessive focus on international bureaucracies. While some provide valuable insights, most of these organizations ceased being relevant long ago. For instance, the World Health Organization offers useful guidance on drug pricing and infectious diseases, and the Food and Agriculture Organization has been helpful in improving agricultural productivity. However, other agencies, like the International Labour Organization (ILO), should be largely disregarded. The ILO continues to promote outdated economic ideas that sensible and wealthy countries abandoned decades ago, and these ideas are not suitable for building a 21st-century economy in Bangladesh.

For example, the ILO’s recent suggestions—such as introducing sectoral wage boards and stronger collective bargaining—are simply impractical. Sectoral wage control ignores how wages are actually determined in the broader national labor market, where your wage is based on what you could earn in your next potential job. Sectoral wages, however, would fix wages within specific industries, disregarding the natural variation in labor markets.

This kind of thinking stems from outdated corporatist economic ideas, where "Big Labor," big corporations, and government attempt to manage the economy. While corporatism has historical ties to fascist economics, it’s not about ideology—it's simply wrong for a modern economy. Strong collective bargaining, a code for powerful unions, is another misguided notion pushed by the ILO, largely because the organization is heavily influenced by the international labor movement. Economically, though, it makes no sense. For collective bargaining to work, unions must be able to keep other workers out of the jobs they are negotiating for—an idea that contradicts the reality of national labor markets.

In Bangladesh, we likely have too many workers in sectors like jute, rickshaw pulling, and small-scale farming, and not enough in better-paid, indoor jobs within larger companies and the services sector. Promoting strong unions would only prevent workers from moving from lower-paid to higher-paid jobs, which is exactly what we don’t want. Economic growth relies on shifting labor and resources from low-value to high-value uses, and strong unions would hinder that transition.

The underlying flaw with corporatism, and by extension the ILO’s recommendations, is that they are based on a static economy where wealth is redistributed rather than created. But Bangladesh’s challenge isn't managing a static economy; it's fostering a dynamic one growing at 5% or more annually. Economic growth naturally redistributes wealth by transforming the economy, not through power blocks like unions.

Ultimately, the ILO is run by people clinging to economic ideas that rich countries discarded 50 years ago. They remain in the ILO because no forward-thinking government would employ them today. If Bangladesh aspires to join the ranks of wealthy nations, it should avoid following the ILO's outdated advice. If even countries like France and Sweden no longer heed these bureaucrats, why should Bangladesh?