Meeting IMF conditions may increase inequality further: Analysts 

Bangladesh may face further increased inequality thanks to changes in the making following the conditions of the International Monetary Fund, analysts at an event in the capital on Monday said.

"Inequality has increased in countries which have taken loans from the IMF and complied with its conditions. The multinational lender is taking programmes [giving loans] for Bangladesh at a time when our overall inequality has been on a natural rise. So, we are at risk of increased inequality," Centre for Policy Dialogue Distinguished Fellow Debapriya Bhattacharya said while presenting keynotes at the budget discussion.

"Initiatives to follow IMF conditions should be taken carefully," he suggested and called for emphasising opinions from stakeholders for every step ahead.

"The IMF is in favour of austerity. It influences government expenditure, due to which backward communities may face problems. The conditions on government expenditure can reduce job opportunities and people's earnings," the economist said.

On recommended changes in tax structure, he expressed doubts about how much reforms could be made to reduce reliance on indirect taxes.

Citing data from the Bangladesh Bureau of Statistics, Debapriya said inequality has increased in the country in recent times despite a fall in the poverty rate. "Disparity grew more in cities than villages. Both income and consumption inequality rose there. The key reason behind the situation might be an upsurge in people coming from villages to cities for work."

The distinguished fellow added that people's purchasing power is decreasing. Goods are being sold at high prices in the market. Development aspirations are no longer being uttered by political leaders. No one is talking about achieving the 8th Five-Year-Goals in any other area except infrastructure. This is not a good sign.

Talking part in the programme the CPD and Citizen's Platform for SDGs Bangladesh organised to discuss how the voices of disadvantaged people can be reflected in the national budget during the IMF, CPD Executive Director Fahmida Khatun said the revenue and expenditure plans taken by the government through budgets have an impact on people from all walks of life.

"For a balanced, inclusive and sustainable society, the benefits of development must be equitably distributed. But, inequality seems increasing despite the reduction of poverty in the country," she added and called for good governance.

"The government approached the IMF when it was in crisis. Its conditions, however, are causing pressure on the common people in various ways. It will ultimately disrupt economic progress," said Rana Mohammad Sohel, a member of the parliamentary standing committee related to the Ministry of Finance.

He recommended increasing the allocation for disadvantaged people.

Business Initiative Leading Development CEO Ferdous Ara Begum suggested that the subsidies that can eliminate discrimination should be increased further.

Planning Minister MA Mannan, CPD Trustee Sultana Kamal, its Distinguished Fellow Mustafizur Rahman, former lawmaker Rumin Farhana, and Brac Executive Director Ashif Saleh also spoke at the event that took place in the Bangabandhu International Conference Centre.

MA Mannan said that poor people of the country are being deprived. "Members of parliament cannot reach the right place even if they try, when it comes to the distribution of allowances to the poor, due to procedural reasons," he added.

The planning minister said Bangladesh is not dependent on the IMF. "The budget is entirely the government's plan, where the IMF is a side actor only."

"The biggest problem at the moment is inflation. Although it has decreased slightly in the last month, prices are still high. Wages have increased slightly, which is good," he added.

MA Mannan said bad subsidies should be stopped now as a group of unscrupulous people are taking advantage of it. "We must come out of such subsidies. Even government officials need to get out of the big car and big house facilities."

Sultana Kamal, a trustee of CPD, said the government is interested in providing allowances, but it is not interested enough in creating jobs and building self-reliant citizens. "People are in a lot of problems. They struggle to survive. Those who are in power do not have the patience and mentality to listen to the problems of the citizens," she added.

Former lawmaker Rumin Farhana said that the earnings from exports and remittances are more than the expenditure on imports and debt repayment. "Foreign currency is not accumulating, as a consequence, resulting in difficulties in imports of essential goods, including fuel. Inequality is increasing. It is not clear what steps will be taken in the budget is to reduce inequality," she said.

"Inequality will not be reduced if indirect taxes are not reduced. The government is increasing the burden on regular taxpayers, instead of increasing tax nets, repeatedly," she added.