‘Inequality is hurting growth opportunities in Bangladesh’

Bangladesh's economy has grown robustly in the last couple of years, but its people have not benefited equally. This may hinder further growth in the country, said researchers at the Sanem Asian Economists' Conference at the Brac Center in Dhaka on Sunday.

Zubayer Hossen, research economist of Sanem (South Asian Network on Economic Modeling), said inequality in Bangladesh is hurting the growth of opportunity in the country.

In a paper titled "Pathway of reducing inequality in Bangladesh", Zubayer said that an inequality level that is greater than Gini coefficient 0.27 could hamper further growth opportunities. Bangladesh's Gini coefficient is 0.482 at present.  The Gini coefficient is the economic measure of equality. 

Zubayer recommended a progressive fiscal policy in terms of revenue collection, and an effective fiscal policy for expenditure in order to reduce inequality.

Economic growth helped to increase per capita income and reduce poverty, but uneven distribution of growth led to inequality in income, expenditure and wealth, and created multi-dimensional poverty, said Dr Fahmida Khatun, executive director of the Center for Policy Dialogue.

Dr Fahmida Khatun chaired the first session on "Poverty and Inequality", and Dr KAS Murshid, director general of the Bangladesh Institute of Development Studies (BIDS), chaired the second session on the same topic.

Dr Murshid said, current policies may ensure growth, but to reduce inequality and to eradicate poverty, the government should reform the policy. It should provide training to develop skilled human capital, encourage innovation and provide power, energy and infrastructure support.

Young economists from Bangladesh, India and Nepal presented eight research papers in the two sessions at the conference.

Emran Hasan, assistant professor of the Department of Economics at the Bangladesh University of Professionals, said the public sector provides 20 percent of employment globally, but in Bangladesh it provides only 2 percent. 

The government has almost doubled the salaries of public employees, and provided them with security, good status and huge opportunity to use their power. That is why application for BCS jobs has been rising at an exponential rate of late, said Emran in his paper titled "Is the public sector wage premium real?"

Dr S M Zulfiqar Ali, senior research fellow at the BIDS, said multidimensional poverty among children is a very important development agenda. About 50 percent of children are married before reaching the age of 18. Child labour is also an agenda that is discussed worldwide. The government should focus on these socio-economic issues along with economic development.

Referring to the paper by Zubayer, Dr Zulfiqar said fiscal policy would not be enough to reduce inequality until the policy of growth is changed. Benefit of growth should be distributed among all, ensuring employment and proper wages.