The two years of AL rule have many successes to boast. Economic development is certainly a major area of progress. Finance Minister Mr. Muhith has said that the government focused on energy and infrastructure.
While Bangladesh will probably not achieve 8% growth which is required to go into the heartland of the middle income territory, it will certainly be stepping into the lower end of the middle income. That, Mr. Muhith has emphasised is not a mean achievement. We agree.
In the economic sector, income rising indicators are blinking positively but although per capita income has gone up, so has inequality.
Prof. Khan A. Matin, Professor at the Institute of Statistical Research and Training (ISRT), University of Dhaka has measured the situation in depth, and said that “Rising economic inequality through the distribution of income, consumption, wealth or assets is a major challenge” (Bangladesh Economic Association Paper).
Based on various Household Income and Expenditure Survey data, the findings suggest that that there have been perennial transfer of income from the lower income households to the highest section. To enhance equity means bringing in more and more people of the poorer section into gainful economic activities at home and abroad. That means empowering those sectors in which the poorer section can participate.
This sobering technical analysis should be read with what Prof. Rehman Sobhan has recently said on the rural-urban divide. Speaking on building a Bangladesh which Bangabandhu Sheikh Mujib envisioned, he observed that there has to be greater attention on the rural economy.
Many villagers are unable to access the urban market leading to enforced low incomes for farmers due to lack of transportation and appropriate marketing. Prof. Sobhan said that Sheikh Mujib’s “Shonar Bangla” was about golden villages largely and more attention should be paid to this ignored section as well. Clearly, economic development without equitable distribution is not what can be stated as ideal development.
This in effect has meant that the upper sections have benefitted more due to the economic policies of today than the poorer sections. But some points need attention. Extreme poverty has significantly gone down and Human Development Indicators (HDI) are positive and better than almost all our South Asian neighbours.
Inequality is also a by-product of a developing economy so it’s not a surprise but what is required to be done is to pay attention in building economic security nets for the poor too as the economy swings up. That certainly needs to be taken more seriously than stating aggregate economic data and achievements in infrastructure and energy supply, though those are major gains.
One by-product of this phenomenon is not just in the low interaction between the urban and rural economies, but also the rise of social alienation. The lower economic classes are still far from being reached through services and goods and that shows that priorities need to be adjusted at the policy level.
Dr. Sadiq Ahmed has said on the need to address this challenge by stating, “The substantial reduction in poverty in Bangladesh since independence is a cause for celebration. A major reason for this decline in poverty is the rising per capita income, growing from less than 2% per year in the 1970s to around 5% per year in the 2000s.
“Yet, it is worrisome that an estimated 47 million people were below the national poverty line in 2010. Continued rapid growth in per capita income will help reduce poverty further, but the ability of higher growth to lower poverty is hampered by growing income inequality.
“High inequality also creates social tensions and tends to contribute to social and political instability.”
Economists therefore are warning that while the country is becoming better off, many people are not. And within this may lay the seeds of dissent and political discontent later on.
Perhaps the traffic jams of Dhaka can serve as an apt example of the situation. God alone knows how many private cars clog the roads making it impossible for anyone to move. Not only is there an incredibly high economic cost of such jams but other contingent prices have to be paid for it as well.
From health loss due to pollution to weakening of family bonds and community life due to loss of time spent in jams, makes having enough money to buy a car an unsustainable indicator of economic success.
In fact the Metrorail, which is expected to cost around 2.8 billion dollars, would probably not be needed had the traffic system handled the management of the road-vehicle ratio better. Perhaps, the economic cost of traffic jams is big enough to fund as many other projects.
That is why the equity issue comes here. Most people do not own private cars, most roadworthy land is taken away and instead of a quarter of the total city land, only 7% is allotted for roads out of which as little as 2% may be used as vehicular pathways. It’s a contradiction of development certainly, but also of prioritisation. And we don’t ever even think of the pedestrians.
However, Bangladesh remains a land of the most hopeful people. A recent survey shows that and also that our self-belief in Bangladesh’s economic potential is enormous. Although we are plagued by many problems including paucity of natural resources, we have emerged against all odds as one of the most potential economies too.
So economic development is a matter of time, but what must be ensured is that everyone gets a share of that development cake.
Congrats to the PM, FM and all who are a part of that journey to the middle of somewhere and with everyone on the elephant.