Bangladesh has made big strides in the economic field over the last few decades. More importantly, it maintained a steady growth of over 6.0 per cent per annum. Not many countries in the world could register an economic growth at that level. The World Bank, in one of its recent reports, stated that Bangladesh has graduated to a lower middle-income country, a level that requires per capita GNI (Gross National Income) between US$1045 and US$4125.
     This is indeed good news, but there is hardly any scope for self-gratification as Bangladesh will remain a least developed country (LDC) until its per capita GNI (gross national income) increases by another four times. Not all individuals have an annual income of over Tk.100,000 nor all families earn Tk.500,000 per year. Had it been so, our youth would definitely not have preferred to leave the country for a better life at the risk of their lives. Or, people would not have risked their lives merely for a piece of clothing and a paltry zakat donation.
In terms of numbers, poverty has declined considerably and several targets of the Millennium Development Goals (MDGs) have been attained. But given the manner in which income or poverty is measured, one can climb above the poverty line even by living through borrowing. Furthermore, remittances received from overseas relatives have made life easier for some. But there is very little protection against vulnerability to natural calamities and man-made crises like sharp increases in food prices experienced in recent years.
According to household surveys conducted by the Bangladesh Bureau of Statistics (BBS), during the last couple of decades, the higher income groups have climbed further up on the ladder while the situation of the poor, the lower middle-income group and the middle income group has deteriorated. Research undertaken recently by Pew Research, a US-based organisation, presents a similar picture. This goes to indicate that inequalities among income groups have widened. On other fronts, one may cite the remarkable progress regarding enrolment in primary and secondary education schools or gender parity at those levels. Lowering of education cost in public schools greatly facilitated the enrolment. But mere enrolment in schools is not good enough to narrow down the gap between various income groups. Some indication of persisting inequalities can be obtained from differences between the kind of education that is provided in schools attended by children of the poor and the lower income groups and that available in schools where children of upper income groups are enrolled. Such differences in the quality of education contribute to income inequality. The same can be said about differences in the quality of health care.
Truly, we have reasons to feel satisfied, but at the same time we should not ignore the underlying weaknesses of the economy. In a country like Bangladesh, increase in the incomes of the lower income groups can contribute to economic growth by strengthening the demand side.
A high rate of economic growth helps achieve poverty reduction. In fact, economic growth is necessary for poverty reduction on a sustained basis. When an economy moves to higher levels of per capita income, it may not be possible to sustain the same rate of poverty reduction that is attained at lower levels of per capita income. In order to sustain the rate of poverty reduction, attention has to be given to income distribution.
It appears, our policy makers are not paying due attention to the issue of income inequality and in fact, the problem has often been ignored. However, a change in attitude is noticeable in preparing the Seventh Five-Year Plan (2016-2020), though measures to overcome the problem effectively are not yet visible. As a matter of fact, we should not restrict our goal to increasing the average income only, but a few other goals should be set. The post-MDG development agenda includes elimination of poverty, reduction in income inequality and attainment of full and productive employment for all alongside achieving sustained economic growth. As we talk about graduating to the upper middle-income level soon, our target should be to get to the status by taking everyone on board and creating productive employment for everyone.
saleh.akram26@gmail.com
Looking beyond the lower middle-income bracket
Saleh Akram | Published: July 28, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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