Pandemic and inequality: The vicious viral loop!

Most of us would probably agree with economist and author of the book 'Globalization of Inequality' François Bourguignon, that global inequality is a result of combination of two components - inequality between nations and inequality within nations. This concept of inequality is focused only on monetary dimension.

But inequality itself is a multi-dimensional construct not only of economic factors like income, wage and wealth but also of other factors such as health, education and opportunity of which inequality of access to healthcare and access to opportunity deserves the highest attention during the Covid-19 pandemic outbreak.

The coronavirus outbreak has blatantly reminded us of the sheer disparity that exists in today's world where millions of people do not have access to basic healthcare a fundamental right. Bangladesh is also not an exception as most of our hospitals and Covid-19 test facilities are located in Dhaka. Healthcare facilities at upazila (dub-district) level seriously lack resources necessary for fighting the deadly virus. Even wealthier citizens from other parts of the country may find it difficult to avail basic healthcare services at the time when they need it most.

In countries like Bangladesh, marginal people who live from hand to mouth and who cannot afford to have treatment in case they are infected with the virus are at a much greater risk of not only losing lives but also livelihoods due to reduced economic.

When a health crisis of the current magnitude hits the entire society, it can very well start a vicious cycle or what may be called a pandemic-inequality infinite loop in the country while widening inequality. As the virus spreads, the people of low socioeconomic stratum would be more vulnerable to risks of infection and economic hardship. For example, despite the lockdown and quarantine measures, a significant number of garments workers moved to Dhaka fearing loss of jobs.

This situation, from a societal perspective, is alarming since each low-income family, which is forced to accept a higher risk of exposure, has enhanced the risks of community transmission of the virus. Several researches suggest low-income group people are generally more likely to have chronic health conditions such as diabetes, blood pressures and heart diseases which again make them most vulnerable to the coronavirus. It is already known to all that the death rate from coronavirus is high among people with pre-existing health conditions.

In today's polarised society, even those who would remain healthy during this pandemic would suffer loss of income or healthcare as a result of lockdown, quarantining and other measures. These effects would shrink aggregate productivity of the economy and raise healthcare costs, leading to more poverty, more disease and thus widening inequality. While diseases do not respect the boundaries that differentiate rich from poor, health inequality is a problem for everyone and needs to be addressed in the post-Covid-19 era.

By then, access to opportunity may surface as the most important dimension of inequality. Perception (subjective) of inequality among the commoners may differ from the so-called objective view of statisticians and economists and such disagreement shows limitations of monetary measures of inequality and influences the political economy of reforms. For example, a garment worker earning Tk8,000 per month and getting access to company's transport facilities might relatively feel better off compared to his/her colleague who earns Tk9000 per month but without having access to company's transport facility. This is why, in no way 'standard of living' can be represented only by income and therefore it is necessary to 'go beyond Gross Domestic Product (GDP)' in addressing inequality.

In a well-functioning market economy, opportunities to receive education, get a good job, earn sufficient money, access other state facilities and enjoy basic rights should not be limited to any segments, based on a person's gender, race, place of birth or parental background.

It's encouraging to note that the government has come up with various fiscal stimulus packages for almost every segment of the society, ranging from big businesses by offering them loans to the marginal people, contractual workers and day labourers by offering them direct cash transfers in order to offset the immediate shocks of the pandemic.

However, the culture of inequality of opportunity to get access to the financial system remains a major impediment for the poor to reaping benefits of these measures. Of course, the poorer segment is always facing difficulties in accessing facilities that the government is offering. We understand the existing social safety net programmes meant for the poor need to be revised from time to time and would require proper institutional mechanism and a minimum standard of governance so that the government's objective to reduce the suffering of the poor is attained.

The UN-sponsored Sustainable Development Goal (SDG) 10 emphasises reducing inequality within and among countries and Target 10.4 specifically suggests adopting policies, especially fiscal, wage and social protection policies in order to achieve greater equality progressively. Bangladesh has attained a miraculous and consistent economic growth over the decade and is it is important that public expenditure on health and education increases. Bangladesh would need to focus more on developing human capital and improving productivity of citizens, as the government has planned, to reduce poverty and inequality.

Let's not forget that despite having a 'reserve army' of labour force, labour-oriented export-led growth of developing countries like Bangladesh may not always help in reducing inequality. Hence, it will be prudent for us to invest more in education and health in order to raise human capital productivity and acquire skills in the long run for a sustainable, inclusive and equitable growth.

Institutional reforms and correcting market failures relating to occupational, managerial and capital rents can be the two major success factors in tackling inequality while 'efficient redistribution through taxation and transfers' can be another effective measure of correcting national inequalities.

As François Bourguignon emphasises, from "the point of view of social justice" the fight against inequality should be treated as "an essential safeguard for preserving societal stability and economic performance" and we should ideally pursue the strategy of having 'inclusive growth' rather than 'growth' only in the post-Covid-19 era. This will not only help us in materialising the dream of father of the nation Bangabandhu Sheikh Mujibur Rahman of having a more equitable, fair and just society but we will also be able to live up to the expectations of our own and international community by attaining the respective sustainable development goal.

Md. Tariq Hassan is a Development Economics

Graduate of Crawford School of Public Policy,

Australian National University.

tariqanu2131@gmail.com