Poverty scenario: Wrong policies, corruption increased income disparity

EditorialProthom Alo illustration

The information about the poverty rate being decreased as mentioned in the final result of the household income and expenditure survey 2022, published by Bangladesh Bureau of Statistics (BBS) doesn’t reassure the public that much. While the poverty has decreased a little on the whole, the income disparity has increased a lot.

According to the BBS survey, the top 10 per cent of citizens of the country earn 40 per cent of the total income while 30 per cent of the income is earned by only five per cent of the people.

On the other hand, 50 per cent of the people possess just 18 per cent of the total income. The poverty rate has dropped to 18.7 per cent, which was 24.3 per cent six years ago in 2016. The extreme poverty rate at present is 5.6 per cent, which was 12.9 six years back.

BBS says that the poverty rate in Dhaka, Barishal and Sylhet division has increased in the last six years. The rate is now 17.9 per cent in Dhaka, 15.8 per cent in Chattogram, 16.7 per cent in Rajshahi, 17.4 per cent in Sylhet, 24.8 per cent in Rangpur, and 24.2 per cent in Mymensingh.

Barishal Division has the highest poverty rate of 26.9 per cent, while Rangpur division had the highest 47 per cent poverty rate in 2016.

The country is making developments and the budget has been growing in size. But how many people are being benefitted from that development also needs to be explored. It must be acknowledged that alongside all the development, the income disparity in Bangladesh stands at a concerning rate right now.  

At the end of 2022, the Gini coefficient has increased to 499 points. If it increases by one more point and the Gini coefficient reaches 500 point, Bangladesh will be marked as a country with high income disparity.

Economists believe that the majority of the society is deprived of the benefit of economic development due to irregularities and corruption caused from this income disparity. Meanwhile, some have also raised questions about the poverty rate going down in Khulna district which has been severely hit by the climate change. Alike Barishal, Khulna too is affected by the climate change.  

Economists have said that just as the wrong policies of the government are responsible for the income disparity so is the corruption and irregularities in the financial sector. Just one day prior to the release of the BBS survey, the observation TIB provided on the income and wealth of the candidates contesting in the 7 January election from seeing their affidavits, has revealed unbelievable information.

The income and wealth of the ministers and the MPs increased at an unnatural speed while in some of their cases it multiplied several hundred times. Besides, the media also reported about looting going on in the financial sector. Conducting research recently, CPD has shown that Tk 920 billion (92,000 crore) has been looted from the banking sector in the last 15 years.

Economists have also raised questions about the accuracy of BBS’s household income and expenditure survey. Khulna and Barishal, both the divisions were equally hit by the climate change. The result should not be contrasting in that case. If the poverty rate drops, it should drop in both divisions.

Meanwhile the poverty rate being slashed by almost half in Rangpur division despite there being no new employment opportunity or industry there, doesn’t seem believable either. For the poverty to reduce at any given location, it’s compulsory to increase employment alongside industrialisation.

According to BBS data, per capita daily consumption of fish, meat, vegetables and dairy products has increased. It’s a positive sign. But spending nearly half of the income on food is by no means a sign of poverty alleviation.  

The economic scenario in Bangladesh is such that the rich will get richer while the poor will get poorer. If has failed to break away from this model of development, no matter how much development there is, only a handful will benefit while majority of the society will remain deprived.

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