High growth not sustainable if inequality continues to rise

The country’s higher economic growth will not be sustainable if inequality continues to rise at the current pace, economists and politicians said yesterday.

“Most of the people have not benefited from the higher growth,” said Selim Jahan, an economist and a former director of Human Development Report Department of the UNDP.

Bangladesh has achieved more than 8 percent GDP growth, which is highly praiseworthy but only one percent of the total population is reaping the benefits of growth, said Moinul Islam, a former president of Bangladesh Economic Association (BEA).

Ninety percent of assets in the country are controlled by 10 percent ultra-wealthy persons which is hampering the economic progress, said Rashed Khan Menon, president of the Workers’ Party of Bangladesh and a lawmaker.

“The dream of the Liberation War will not materialise if we fail to eliminate the discrimination,” he said.

They spoke at a seminar titled “Development, Deprivation and Inequality” organised by the Workers’ Party of Bangladesh at the Institution of Engineers, Bangladesh in Dhaka.

Prof Jahan said there is a strong link between development, deprivation and inequality and sustainable development has a role in removing the deprivation and inequality.

The rate of child and maternal mortality has decreased in recent periods while the number of school-goers is also on the rise, he said.

A good number of universities have been set up in Bangladesh. But questions have arisen over whether the country could improve the quality of education and healthcare service for common people. The country is far away from ensuring quality education and standard healthcare service, which has an indication of an inequality, the economist said.

As per the latest Household Income and Expenditure Survey (HIES), the country’s Gini coefficient, which is the economic measure of equality, stood at 0.482 in 2016, up from 0.458 in 2010, in a worrying development.

The Gini coefficient is measured on a scale of 0 to 1; the closer it is to 1, the higher the inequality is in the society.

Islam of the BEA said Bangladesh’s per capita income is now estimated to be $1,909 but the figure is applicable for only 1-2 lakh people, meaning the majority of the population have not benefited from the outcome of the ongoing development.

In the last 48 years, the country has not reformed agriculture and land, Islam said, adding that South Korea and Taiwan have done it successfully, which helped them accelerate sustainable development.

The economist also said if calculated correctly, defaulted loans in the banking sector would surpass Tk 300,000 crore, from the existing figure of Tk 112,000 crore.

However, Finance Minister AHM Mustafa Kamal has not confessed it at all; rather he is trying to give more scope to the defaulters to siphon off money from the banking sector, he said.

Islam said 62 percent of lawmakers in parliament have come from the business community and many of them are defaulters. So, they do not frame laws for the disadvantaged people.

“Per capita income, average life expectancy and the ratio of education have increased. But these indicators don’t reflect the collective improvement,” said MM Akash, a professor of the economics department at the University of Dhaka.

A large number of infrastructures are now being built but they are not sustainable, he said. There is corruption in the implementation of the infrastructural projects, he said.

“Development will be sustainable if democracy can be ensured,” Akash said.

Around 1 crore people are living in remote char areas but the budget never sets aside funds for them, said Fazle Hasan Badsha, general secretary of the Workers’ Party of Bangladesh.