Balanced Growth: An Imperative for All

Shaikh Rezanul Haque (Manik)

5th July, 2019 03:23:28 printer

Balanced Growth: An Imperative for All

Shaikh Rezanul Haque (Manik)

Bangladesh is now recognised as one of the fastest economies in the world with prospect of emerging a new economic power in the South Asia. In the light of some social indicators, it has already surpassed Pakistan and India - the economic giant of Asia. As a result of its steady growth over the last couple of years, avenues of physical infrastructure have already opened up. Bangladeshis now spread themselves almost all parts of the world, working with reputation, winning recognition and remitting foreign exchange worth more than USD 15 billion per year.

The rate of literacy has gone up, so has the life expectancy. Infant mortality has declined and growth of population is under control. Per capita income has gone up. Money has more and less trickled down to the poor. We can speak of an explosion in the field of education and we have the reasons to do so. Women have come out of their relative confinement and they are now visible in all fields of economic and administrative activities. They are now in police and armed forces and working abroad. The manufacturing sector, especially the apparel sector has laudably flourished because of the labour power provided mostly by the women. In the public examinations women are competing with their male peers and sometimes faring better. What is of particular significance is that people are now conscious of all that are happening in their own world and even abroad.

Bangladesh’s economic growth has been commendably and consistently high during this decade. Most recently, Its GDP(Gross Domestic Product) has touched eight plus mark when it registered 8.13 percentage point in the just concluded previous fiscal year, the highest in the country’s history, according to the finance minister, who revealed this statistics to the parliament while releasing a provisional estimate.

Given the above accounts of progress on economic and social sectors made over the last two decades in Bangladesh, it seems to have borne witness that a balanced or inclusive development has taken firm root in the society. Is it true? It is indeed a million dollar question that calls for a bit explanation substantiated by relevant data and information.

A recent Household Income and Expenditure survey (HIES) carried out by Bangladesh Bureau of Statistics has revealed the fact that income inequality between the poor and  rich has increased alarmingly with the Gini co-efficient,  an economic measure of inequality, standing at 0.482 as of 2016, up from 0.458 in 2010 which obviously divulged the ever-increasing rich-poor gap.  At the first glance it may appear like a paradox that income or wealth inequality in our society has reached an all-time high at about the same time when the highest ever GDP growth is recorded. From this standpoint, one can draw a conclusion admitting that GDP growth and income equality is mutually exclusive. But that is not the case in point, if we bent upon to achieving inclusive growth as laid down in the UN sponsored Sustainable Development Goals (SDGs).

Of late, there has been excessive focus on GDP growth rates in Bangladesh development discourse. No wonder it has become a much-talked about popular household word in the last couple of years during which Bangladesh’s economy got momentum and attained a consistent rise in GDP growth. Unfortunately, we seem to have become too much complacent taking solace in rising GDP growth, even though we still remain in dark about the methodology of calculation based on which the data information is generating.

Accelerated GDP growth and high per capita income are not all about human development, nor do they present the real economic condition of the masses in general. They are one of the yardsticks used in measuring the economic scenario of a country. It is Human Development Index (HDI) that determines the real economic condition of the people. Therefore, we should look into the value of HDI rather than o focusing only on GDP. We must invest in human resources. Nobody can empower anybody. It is we empower or weaken ourselves.

Let us come to the core issue. What development purports in real terms? Development, given the idea of UN Human Development Office and internationally renowned analysts as well should be of the people, for the people and by the people. Development of the people means enhancing the capabilities of the people, development for the people suggests fruit of development should be equitably distributed among all the segments of the society and development by the people emphasises people’s active participation in decision-making process which transform the development matrix.

Thankfully, there now seems to be a growing realisation of our tunnel vision of what development is supposed to be, and more and more people are now set to see the veneer of GDP growth and reviewing, as they should, the quality of this growth. If the benefits of growth do not reach everyone then what the Gini co-efficient tells is extremely worrying. In that situation GDP growth helps the rich becoming richer and the poor poorer.

We must realise that human development (which includes health, education, shelter and freedom of speech) is the hallmark of development – not the accelerated GDP, per capita income or increase in number of the ultra-rich – which will ultimately bring forth a balanced development and thereby narrowing the gaps between the haves and have-nots. We are badly in need of framing a policy framework and of expanding already existing social safety net which can redress social inequality. Also, progressive income tax system can play a vital role in this regard. As long as investment in education to the GDP ratio (it should be 5 per cent to GDP from the current 2 per cent instead) is increased and considerable investments are not made in health care and physical infrastructure, as long as required level of jobs is not created and last but not least, as long as pervasive corruption is not eliminated all endeavours of bringing equality will remain elusive. Rather, it will further widen the gaps between the rich and poor and at the end of the day it might jeopardise the very system in which we live in.

 

The writer is a retired Deputy General Manager of BSCIC


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