Although Bangladesh made a tremendous achievement in recent GDP growth, employment and wages did not increase proportionately. The poverty reduction rate is also not as satisfying — which is further fueling the income and expenditure gaps between the rich and the poor.
At the same time, numerous inequalities including urban-rural disparity and gender gap are on the rise. This discrimination is prompting financial irregularities, and experts fear "a shocking fall" in the economy in the future.
They made the cautionary remarks at a seminar organised by Oxfam at the Cirdap Auditorium in Dhaka on Thursday. At the programme, planning minister MA Mannan termed income inequality as "injustice" and claimed the government could not respond to it adequately because they are prioritising the elimination of poverty and hunger.
He said inequality will get special attention from now on.
Oxfam Bangladesh's Country Director Dr Dipankar Datta presided over the seminar while Dhaka University Development Studies Professor Dr Rashed Al Mahmud Titumir presented the keynote paper, titled 'Whither Inequality in Bangladesh'.
The keynote paper said the income of the top 10 percent of households is 2.93 percent higher than the total income of the bottom 40 percent of households. This Palma Ration, an inequality measurement, was 1.73 percent in the 1985-86 fiscal year.
According to this measurement, income inequality has gone up by 69 percent in the last 30 years.
Prof Titumir said the country's Gini coefficient, another economic gauge of inequality, rose to 0.43 in 1995-96, from 0.39 in 1991-92. It was 0.47 in 2009, dropped slightly to 0.46 in 2010 and went up again to 0.48 in 2016.
The income of the bottom 5 percent of people contributed 0.77 percent to the national income in 2015. It dropped to 0.23 percent the next year. On the other hand, the income of the top 5 percent of people went up to 31.12 percent from 26.93 during the same period.
The professor commented that rich people are sending a large portion of their income to foreign countries instead of investing it in Bangladesh.
A former advisor of a caretaker government, Mirza Azizul Islam, said the overall contribution of the agricultural sector to the gross domestic product has fallen. Moreover, the introduction of modern technologies slashed the wages and salaries of labourers. Therefore, inequality is on the rise in spite of fair GDP growth.
Capitalists are enjoying all the facilities provided by the government to boost investments, Mirza Azizul commented, and added, "Those who pay regular installments also have to pay a huge interest rate, while the big loan defaulters are enjoying a bailout."
He commented that this bailout policy will do nothing good. It will only intensify the financial chaos.
Former governor of the Bangladesh Bank Dr Salehuddin Ahmed said social indicators do not reflect the tremendous successes in the financial sector. Inequality is dragging down people in several social aspects.
"If we fail to achieve sustainable development by reducing inequality, there might be a shocking fall in the economy soon," he added.
Suggesting improved loan facilities in rural areas, the economist said, "People in rural areas will excel on their own if they get a small favor. There will be no need to pull them up."
He claimed the concerned authorities know the reasons, issues and solutions of the downward financial sector.
Another former advisor to a aretaker government, Rasheda K Chowdhury, said some regions with accelerated poverty reduction rates are still lagging behind in social criteria. Maternal death, child mortality and child marriage are still horrifyingly high in many areas in Bangladesh.
She suggested more investment in education and advocated for modernising the education system. Dhaka University Professor Sadeka Halim expressed concern over the deterioration in the quality of education.
Former chairman of the National Board of Revenue, Dr Abdul Majid, said the outputs of the investment for infrastructural development are not satisfactory.
In the meantime, Dhaka University Economics Department Professor MM Akash said corruption is eating up 2 percent of the GDP every year. He said there is no reason to be happy with the 8 percent growth while it could be 10 percent.
Executive Director of the Centre for Policy Dialogue (CPD) Dr Fahmida Khatun said the agriculture sector has the highest number of workers. The sector's poor contribution to the GDP has downed their incomes. Therefore, GDP growth is failing to generate employment.
Planning minister MA Mannan said the government is putting its efforts together to stamp out inequality.
MA Mannan said, "We are now allocating more for infrastructural development in rural areas. The construction of a separate rail bridge will begin soon for better connectivity between the northern region and the capital."
He commented that more investment in education and healthcare can play a vital role slashing inequality. Mannan claimed the government is doing its best in this regard.