Bangladesh becoming highly unequal country

Bangladesh is gradually becoming a very unequal country as the level of income inequality between the rich and the poor, according to government data, has widened further in the last one decade between 2022 and 2010, taking Bangladesh to the brink of becoming a higher unequal country.

One of the major reasons contributing to rising income inequality is that both the affluent and the poor pay indirect taxes at the same rate.

Speakers made these observations at a dialogue titled “How to Reflect the Concerns of the Disadvantaged Groups in the Upcoming National Budget during the IMF Programme Period?” jointly organised by Centre for Policy Dialogue (CPD) and Citizen’s Platform for SDGs, Bangladesh at the Bangabandhu International Conference Centre in Dhaka on Monday.

Moderated by CPD trustee board member Sultana Kamal, planning minister MA Mannan was the chief guest of the event while CPD distinguished fellow and Citizen’s Platform for SDGs convenor Debapriya Bhattacharya presented the keynote paper.

The keynote paper said the budget for 2023-24 fiscal is coming. Had the government taken the reform measures before on its own instead of taking those after the advice of the International Monetary Fund (IMF), it would have been far better, but “budget is helpless now, and the IFM is its step-father.”

CPD distinguished fellow Debapriya Bhattacharya said numerous studies including those from the IMF have consistently demonstrated that inequality tends to increase during IMF programmes or as a result of IMF conditionalities.

There is much to think about seven specific current concerns including a drop in purchasing power of the disadvantaged population groups, the keynote paper stated.

Subsidy turns good and bad time to time and there is no chance to differ to IMF advice on additional tax collection, but from whom that tax would be collected is the big issue.

Addressing the event, CPD distinguished fellow Mustafizur Rahman said Bangladesh has the lowest portion of government spending in budget in South Asia, and the size of the budget should be Tk 12 trillion.

BRAC executive director Asif Saleh said people don’t know about many initiatives of the government like stipend for children of migrants though it takes 24-25 phases to cross.

Asif Saleh shared his personal experience saying they learned about an area where child marriage is rampant. After looking into it, it was learned the imams of the local mosques and marriage registrar (Kazi) are playing role in child marriages. Kazi said, "I earn Tk 4,500 a month, how is it possible to run a family with such a little amount?”

So, it is necessary to dig deep into root of the problem and what causes what, Asif Saleh added.

Former BNP lawmaker Rumeen Farhana said, “Indirect tax is increasing inequality. Both Beximco owners and Rumeen Farhana pay indirect tax at a same rate.”

The government is using Covid-19 pandemic, Russia-Ukraine war and global economic crisis as an excuse for decline in foreign reserve, Rumeen Farhana alleged adding, the government has stopped disclosing information on money laundering since 2015, and that means the government is unwilling to stop money laundering.

Senior citizen Tofazzel Hossain demanded that old age allowance has to be increased to Tk 1,000 from Tk 500.

Representative of Dalit people Shipon Kumar Das said there is no mention of 5.5 million members of Dalit community in budget. They have been contracting germs as they clean waste, yet they are dependent on local physicians.

Transwoman Tanisha Yasmin Chaity demanded safe home saying they have been victims of discrimination and deprivation from their families to everywhere.

Planning minister MA Mannan mentioned the IMF as a side factor in the budget.

“What is the relation of IMF with the budget? Budget is our own issue whereas the IMF is a side factor. We are not dependent on IMF," he pointed out.

The minister said, “There is nothing like ‘a mission will come’. We have said that are we going to die here, so that you (IMF) are on a mission here. Many people also call them donor agencies. What are the donor agencies? I vehemently oppose this word. They (IMF) are development partners. We take loan and repay it with capital and interest,” he said.

Regarding money laundering, the minister said, “We couldn’t stop hundi. And we don’t do excess on reserve and it is normal reserve will fluctuate.”

It is necessary to maintain austerity in every sector. Big houses, big cars for senior officials, all this must change now, he added.

Lawmaker Rana Mohammad Sohail, Business Initiative Leading Development (BUILD) chief executive officer Ferdaus Ara Begum, among others, spoke at the event while CPD executive director Fahmida Khatun delivered the address of welcome.