Behind growth numbers, there are inequalities, inconsistencies

National consumption, income and asset inequalities have increased in five years beginning from 2016, while exports, foreign investment and remittance fell short of targets, making it harder for the new five-year plan to achieve future development goals, says a citizens' group.

Income inequality increased by 7.4% as the gap in real monthly incomes of top 5% and bottom 5% households widened during the period of the Seventh Five-Year Plan (7FYP).

Average annual consumption fell as percentage of gross domestic product (GDP) from 79% in 2010 to 75% in 2016 due to a slower growth of consumption by poorer households compared to richer ones, Citizen's Platform for SDGs says in its study made public on Thursday.

Asset inequality also widened during this period as the top 5% households had 1,283 times higher share of asset than the bottom 5%. The gap was 800 times higher in 2005.

The 7FYP has witnessed major achievements like higher GDP growth and meeting LDC graduation criteria, but it has left some "fault lines" wide open, resulting in gloom of inequality and inconsistencies behind the glosses of growth, Dr Debapriya Bhattacharya, convener of the group, pointed out.

The country achieved a higher GDP growth during the period despite the fact that production-related indicators fell far away from mark during 2016-20 period, he explained.

"Was it a programme deficiency or data confusion?" asked Dr Debapriya, also a distinguished fellow at the Centre for Policy Dialogue (CPD).

Presenting the findings of the platform's research study titled "Revisiting the National Development Strategy of Bangladesh from the Perspectives of the Left Behind Citizens" at a virtual dialogue on Thursday, he said, "We are witnessing Bangladesh as a country of prosperity with assets rising, at the same time widening inequality of opportunities."

Covid-19 has set new benchmarks for development, like higher poverty, bigger unemployment and a wider inequality, which might not be achieved unless the fault lines of recent strategies are not corrected, the survey adds.

It refers to rural-urban disparity and points out poverty rate remains higher in villages than in towns. During 2010-16, the real income per month of the urban top 5% increased by 23%, while rural lower income group saw a 55% decline in their income, it says.

The pandemic impacts would cause the poverty rate to increase from 24.3% in 2016 to 35.0% in 2020, putting 1.3 crore people (20.1% of labour force) at risks of losing jobs and raising Gini coefficient from 0.48 to 0.52, it forecasts, quoting from CPD surveys.

Share of consumption demand in GDP has decreased from 77.8% to 74.7% over the last five years driven by a fall in share of private/ household consumptions (72.4% to 68.5%).

However, the share of public consumption has increased from 5.4% to 6.2% while public investments exceeded the target rate in FY20, driving the overall share of investment in GDP.

"In fact, domestic demand has been driven by public consumption and investment, while private consumption declined, investments stagnated with decreasing contribution of foreign direct investment," Dr Debapriya elaborated.

The employment situation has also deteriorated with higher rates of joblessness among educated youths, the study reveals.

Between 2013 and 2019, rates of primary school completion among children from the lower-middle class and the emerging middle class declined, while it increased among children from the richest section of society.

"Even the secondary education completion rate among the richest group was almost four times higher compared to that of the poorest group in 2019," it says.

The 8FYP, beginning of which coincides the 50th year of the country's independence, needs to look into enhancing effectiveness and ensuring transparency through disseminating real data to reach the fruits of growth equally across groups and regions, Dr Debapriya felt.

Giving their views on the next FYP, participants stressed that future development strategy needs to deviate from growth-only focus and be redefined to achieve an employment-targeted inclusive growth save people from emptying their pockets for health and education, or bribing for government services.

They feel the 8th Five-Year Plan (2021-25), which will come into force from July 1, should address the issues of unemployment keeping the prolonged impacts of Covid-19 pandemic on livelihoods of marginalised people.

Responding to a point raised by participants, CPD Chairman Prof Rehman Sobhan said actual achievements of the 7FYP should have been reported to the parliament.

"In an ideal democracy, grassroots workers of political parties bring concerns of local people to the centre seeking redress. This is not happening now, requiring citizens' groups to step in and make grassroots people's voices heard."

The Covid-19 pandemic pointed out that a large segment of people could not be reached for stimulus due to complexities in the set criteria, he said, comparing it to the Indian experience of helping the informal sector.

Remembering Bangabandhu Sheikh Mujibur Rahman's leadership at the centenary of his birth, the senior economist who was associated with the making of the country's first FYP, said, "Bangabandhu always gave voice to the concerns of grassroots people."

He emerged from common people and stayed close to them as he used to ride rickshaw, bus and normal compartment in train, Prof Rehman Sobhan recalled. "Everything he said represented the concerns of the grassroots. He was a person who created a country and died for it," he said, urging politicians and people's representatives to take cognizance of how Bangabandhu felt and worked for the common people.

The event was attended by five members of parliament – Vice Principal Dr Md Abdus Shahid, chairman of the Parliamentary Committee on Estimates; Kazi Nabil Ahmed, member of the Standing Committee on Ministry of Finance; Selima Ahmad, member of the Standing Committee on Ministry of Finance; Pir Fazlur Rahman, member of the Standing Committee on Ministry of Home Affairs; Barrister Rumeen Farhana, member of the Parliamentary Standing Committee on Ministry of Law, Justice and Parliamentary Affairs.

Shima Moslem, joint secretary of Bangladesh Mahila Parishad; Professor  Dr Tasneem Siddiqui, chairman of Refugee and Migratory Movements Research Unit; Syed Almas Kabir, president of the Bangladesh Association of Software & Information Services; Ushatan Talukder, former member of the parliament from Rangamati were present as panelists in the mutilogue. 

Shaheen Anam, executive director of Manusher Jonno Foundation; Rasheda K Choudhury, executive director of the Campaign for Popular Education, Dr Iftekharuzzaman, executive director of the Transparency International Bangladesh; and Professor Mustafizur Rahman, distinguished fellow of the CPD were also present. 

Barrister Rumeen Farhana said the issue of inequality is clear when we look at the growth of per capita income and the rate of poverty mitigation rate in the country.

From 2001 to 2010, the poverty reduction rate was 1.6%. Since 2010, the poverty reduction rate has decreased by 1.2%. In the same period, per capita income has almost doubled. "If the poverty reduction rate is low but the per capita income increases, then who are the gainers?" she questioned.

Shaheen Anam from Manusher Jonno Foundation said there was nothing in the draft of the 8FYP to recover the economy from the coronavirus shocks. There is no specific step for achieving SDGs, she added.