Experts warn against fallouts from regional inequality

District-wise investment expansion suggested

FE Report | Published: April 29, 2019 09:51:01 | Updated: May 21, 2019 14:09:08

Picture used for illustrative purpose only — Collected

Rising inequality could lead to economic destabilisation, which can snowball into social unrest, experts at a discussion warned Sunday.

They feared a vested group could take the opportunity for advancing their ideologies, which might be harmful to the economy as a whole.

To avert such an unpleasant situation, they suggested district-wise investment expansion through the development of smaller firms, smooth access to institutions.

The suggestions came at a discussion session on Inequality and Regional Poverty at BIDS Critical Conversations 2019 organised by the Bangladesh Institute of Development Studies (BIDS) in the city.

Moderating a panel discussion on inequality and regional poverty, professor of Development Economics of Ulster University Dr S.R Osmani said there are political and economic reasons for being concerned about the growing inequality.

He said if a country has a high level of inequality where the rich people are prospering thousand times faster than the poor communities, it could create various forms of social unrests.

"When the social unrest goes in a chaotic direction, society becomes unstable and it ultimately makes the economy uncertain and destabilised. Investors don't like uncertainty. Investment goes down and the economy suffers," he said.

Referring to the political consequence of the situation, Mr Osmani said when the sense of injustice grows within a section of the society, "unscrupulous" politicians often take the advantage of that to advance their ideologies.

"And it could be very harmful for the nation," he said.

He gave the example of Brexit, saying it is the reflection of inequality that prevailed among a section of Britons after its integration with the European Union.

"Britons think people of other countries take away their jobs. Now they realise it's a terrible mess and they cannot get out it. So, it's political dangers of the rising inequality," he added.

Former professor of finance at the University of Dhaka Dr MA Baqui Khalily was critical of the incentive for the defaulted borrowers as announced by the ministry of finance.

"It (incentive) is going to make them (defaulters) even worse. These dishonest borrowers will continue to take the advantage," he said.

Suggesting industrial investment expansion through promoting SMEs in all districts, he said it will not only create jobs but also help reduce the regional growth disparity contributing more to the economy.

Making a presentation, BIDS research director Dr Binayak Sen said growth is accelerating at a faster rate but the pace of poverty has slowed down, especially in urban areas and income equality is increasing at even faster rate.

BIDS senior research fellow Dr SM Zulfiqar Ali said the poverty rate had been found to be increasing in 23 districts of the country between 2010 and 2016.

He said the difference of poverty between top five districts and bottom five is huge. "Even within some agro-ecological zones, some districts are doing better than others. What explains these differences?"

ActionAid Bangladesh country director Farah Kabir said building mega projects in some places has been forcing the communities to slip back into poverty.

Giving example of Matarbari in Chattogram, she said the area remains under water for three months a year, but people have been displaced from the locality in the name of building the mega project.

The narrative that is being given to the communities is the place will be like Singapore and people will get benefit from it, she said.

"We heard the same thing in Patuakhali and some other places. So, Bangladesh is going to have multiple Singapore (s). I am concerned that it will increase inequality even further, she said.

Executive director of Brac Institute of Governance and Development Dr Imran Matin also spoke at the event.



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