Income of the middle class people is on the decline due to 'trickle-down impact' of the longest-ever blockade in the country by the opposition political parties since January 05. As a result, they are forced to go for austerity measures to tide over the difficulties that have befallen them.
The members of the middle class are, indeed, spending cautiously amid price hike of essential commodities caused by disruption of supply chain due to the blockade and frequent hartals amid fear of a tough time ahead.
One fifth of the country's population or 30 million is said to be the middle-income group that is growing, according to a World Bank assessment in 2013. The assessment noted that the growing consumption by the group helped the country to obtain a 6.0 per cent plus growth in the last one decade.
The austerity measures and lower consumption are not either good news for the income of the National Board of Revenue (NBR). The revenue board is already feeling the pinch of the impact of the economic downtrend.
The NBR has estimated a Tk 20 billion shortfall in the income from value added tax (VAT) in the first seven months of the fiscal due to lower consumption. It fears a further revenue loss after many manufacturing units of essential commodities appealed for deferment of tax payment.
However, the government is yet to make an assessment of the overall economic losses caused by the ongoing unrest. The losses will be much higher than last year's when the country had witnessed a similar political unrest in the run-up to the January 05 general election, boycotted by the BNP-led opposition.
According to a WB estimate, the country had suffered losses of Tk 108.57 billion in the last fiscal due to political unrest. A rough assessment of the overall economic situation can be made by way of a survey of the market and sales of products, a large part of which is consumed by the middle class.
In fact, the growth of the middle class was phenomenal in the country. A recent study on 'Faltering middle class aspirations in Bangladesh' signifies that a growing number of Bangladeshis have been able to achieve a middle class consumer lifestyle over the years, driving the foreign direct investment (FDI) in the consumer goods market.
Expansion in services, especially the retail, financial and public administration sectors, was responsible for the growth of middle class. The sectors grew between 8.0 per cent and 13 per cent compared to that of the growth in agriculture, leading to the creation of more jobs for the middle class.
Bangladesh is trying to graduate itself to the middle income country within a decade. The role of the middle class is thus very important in this respect.
The socio-economic changes that broadly explain the emergence of the middle class are increasing incomes, urbanisation, white-collar occupations, fuelling demand for consumer products and services. Government policies and the nature and level of spending have also otherwise influenced the pace of the middle class's creation.
Inflation is rising fast in the country and quickly burning a hole in the pockets of the general public. Almost everyone feels they are fighting a losing battle against price. Rising prices create mounting stress.
Those with limited earnings find it a major obstacle to realise theirs dreams in this market of inflated prices. The prices of daily necessities are gong up leaps and bound. Many fear to even think of buying something out of simple desire. It is becoming increasingly difficult to meet the budget.
Besides, house rent, cost of education and medical treatment and transport charges also saw a steady rise while the income of these groups remained static, making it harder for them to make ends meet. A large section of them are showing signs of being incapable of dealing with the abrupt price hikes of essential commodities.
Besides the utility bills, there are many dues that are left over. Most of the increases are seen affecting the kitchen. Prices of necessary food items such as rice, pulses, oil and green vegetables are becoming costlier every day.
The increase in grocery prices is also having a subsequent effect on the process of other things. In case of transportation, rickshaw pullers and CNG scooter drivers are asking for Tk 30-50 extra per trip.
Analysts say the middle-class people want to lead their lives with dignity and that is why they give importance to housing and education first and then go for food, medical treatment and transportation. After spending the lion's share of their income on these, they cannot meet their food and other expenses with the amount left, they said.
Mostly the teachers of different schools, colleges and government universities, officials and employees of different government and non-government institutions and small traders are bearing the brunt of the situation.
With the price hike of essentials, the people from limited income and middle-class are forced to have low standard foods. As a result, they are suffering from malnutrition, which is affecting their intellectual development as well. Besides, their health is further threatened, as these people are left with little money to have proper medical treatment.
Frustration is thus growing among such middle class families. Their income has not increased. Even they do not any support like that of the government safety net programmes for the poor.
The middle class comprises a significant portion of the country's population. Hence it is assumed that they exert a greater influence in the socio-economic activities. As such, efforts need to be taken to let them live in a decent manner.
szkhan@dhaka.net
Turmoil hits the middle class hard
Shahiduzzaman Khan | Published: March 22, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
Share if you like