Should billionairism and poverty coexist?
Billion means one hundred crore. Yet, the word has its regional and global differences.
Figuratively, `billionaire’ refers to the owner of a hundred crore dollars. Therefore, in Bangladesh, from the basis of present exchange rate of the money market, we can call a person who own at least Tk 8500 crore a billionaire. Though no one knows how many billionaires we have, we have billionairism.
Since 1982, the famous American business magazine Forbes has been publishing a list of the world’s billionaires annually. In 2019, there were 2153 names on its list, though no one was included from Bangladesh. Surprisingly, the last Forbes checklist counted a billionaire from Nepal also, whose economy is many times smaller than Bangladesh.
Perhaps the lack of transparent tax filing system created the lapse in recognising the Bangladeshi billionaires. It is a well-known fact that we have lot of millionaires (equivalent to the owner of eight crore fifty lac taka in line with current exchange rate) and we have an easy business-friendly tax-dodging system which can breed many billionaires also. There could be quite a few billionaires here waiting for global recognition! The much-hyped casino episode in recent times, the capital market scam of a few years ago and the unofficial immunity to bank defaulters strongly indicate that Bangladesh has succeeded in creating various local ways of easy money-making industries.
In Bangladesh, as well as everywhere in the world, the media tries to translate ‘billionairism’ to 'entrepreneurism’, 'fortune’ etc. But except for a few exceptions, all so-called 'fortunes’ grow from the deliberate and strong policy support of the 'government’. It is impossible to ‘make’ a billion dollars, a few people just succeed to 'take’ this by plundering 'national resources’, with administrative protection, weak labour law and destruction of the environment. For this reason American politician Ocasio Cortez often claims that every super rich person is a policy failure of a nation.
But should billionairism be allowed to flourish in Bangladesh such a way? One fifth of the citizens here, approximately more than thirty million, are living under the poverty line now, whose daily wage is below two dollars. If we consider the national economy as a fruit, at present, the affluent section of the country are getting almost the whole. Should we not reduce the number of their slices?
We may recall the research report of the US and UK-based ultra high net asset information company 'Wealth-X’ published last year that stated Bangladesh was getting 17 per cent more super rich persons every year against the previous year. This is the highest rate of wealth surge globally and uninterruptedly happening followed by 2012. The number of super-rich more than doubled in just five years (2012-17). According to renowned economist Moinul Islam, ten per cent of the top category from our society earns and owns 18 times more than ten per cent of lower tier. At the same time our government is struggling to reduce hard-core poverty. What a contrast!
Bangladesh maintains many smart indicators of growth but fails to distribute and redistribute the surplus value among all. Time has matured for more practical and radical decisions in the regard.
A social order with both poverty and billionaires is definitely not moral. The present political economy is damaging the very existence of the nation by expanding the inequality gap. It’s anti-national. It is traitorous. It’s an existential threat.
A country, like Bangladesh, which emerged from an all-out freedom struggle for an egalitarian destiny, cannot allow the few to accumulate billions in wealth while others are denied their basic needs, life with less than two dollars. How can we permanently close our eyes to the right to life of the more than 25 per cent of the people?
Definitely we can’t afford to allow such a system for an unlimited time. This is striking at the nation’s future. Only people, as the owner of the nation and their representatives, if any, can reverse the ongoing fatal path. But now-a-days our parliament has reduced itself into a hub of rich people. No prominent politicians represent the have-nots. So it is understandable why no improved tax-the-rich plan will be discussed and debated there in near future.
Yet we must have a choice between billionaires and a poverty-free society. Only tax-the-ultra rich initiative can offset more expansive anti poverty programmes, including training and job creation for the youth. We must improve our national investment to the social safety net, health care, quality primary education and especially housing for poor and hard core poor. These are essentials for the growth of national productivity. This will create the ability of the labour force to reclaim the share of the value created by them in the political economy. Opportunities must be created in the economy for everybody, not for a few, not for any syndicate with a political flag.
For the sake of rationalising the economy, as a primary condition, the nation needs more resources and radical shifts of the allocation of the resources. The super-rich must ready to pay a fair share for a ethical and just future.
Our proposal is not against the people, but the system and it is the less painful alternative to balance and smooth the future of Bangladesh. We must find potential local solutions against our limited resources for social investment. This may happen through radical reconstruction of the tax net. It is the only remaining non-violent way to save the community from an extremely unjust wealth gap.
However, things are going in the opposite direction. Every year, before the budget session of the parliament, it is a very common scenario that various 'associations’ of super rich will demand more slashes in the upper slab of the tax scale. With the help of the media and so-called think tanks, they create a panicky atmosphere among the policymakers. Basically, it is a strategy to counter the further hike of upper slab of tax and all the historical evidence proved that they succeed repeatedly.
The tax to GDP ratio is comparatively very low in Bangladesh. Tax avoidance in general and tax evasion by multinationals in particular is one of the major causes of this improper ratio. Recently the Daily Star claimed this ratio was one of the lowest in the world. We must improve this ratio because the size of public expenditure depends on the collection of taxes. On the contrary, there is no systematic wealth tax mechanism in Bangladesh. NBR introduced a wealth surcharge as an alternative to wealth tax.
Under the present surcharge system there are complexities and disparities in determining the value of assets. The cost of acquisition is considering the basis of surcharge. In general, people own assets mostly from inheritance, but there is no tax on inherited property. Economists are proposing five per cent more extraordinary tax beyond municipal tax on individuals wealth over 100 crore and ten per cent on assets over thousands of crore. To realise these accumulations NBR should develop a new type of wealth and property tax mechanism. The value of assets could be determined every 3-5 years. This would increase the amount of tax on wealth.
No doubt these steps may reduce the size of the portfolios, profits and wealth accumulations of the present super rich class. But if we want to reclaim our morale of the freedom struggle, which mentioned redistribution of the national wealth, we must fix on our collective historical responsibility.
There is a lot of research published in the EU and the US that economies performed better without billionaires in the past. Even Bangladesh can do better without super-rich.
* Altaf Parvez is a researcher.