Tackling poverty and inequality

The recently released 2024 Global Multidimensional Poverty Index (MPI) reveals an alarming extent of poverty in Bangladesh. According to the report, jointly published by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative of the Oxford University, a staggering 41.7 million people, or nearly a quarter of the population, live in extreme poverty.  The alarming statistics underscore that microcredit has not succeeded in sending poverty to the museum, nor could the past government's grandiose development initiatives free a significant portion of the population from the shackles of grinding poverty. The poverty situation has, in fact, worsened in the last couple of years for various reasons, including widespread job loss due to the COVID-19 pandemic, the economic slowdown caused by the Russia-Ukraine war, the subsequent dollar crisis, persistent inflation and economic stagflation. The previous Awami League government, however, had a tendency to conceal uncomfortable truths, manipulate data through state-run statistical organisations, and present an overly optimistic picture to support its development narrative. With the change of guard, now there is an opportunity to adopt an action plan based on the actual situation.

Much of the poverty that persists is rooted in issues of income inequality and systemic discrimination, which continue to hinder equitable distribution of wealth and opportunities. The country possesses sufficient resources, and the economy of Bangladesh is robust enough to cater to the needs of all its citizens. What is needed is distributive justice and equal economic opportunities. Since the interim government is the result of casus omissus following the anti-discrimination movement, it holds a mandate to initiate the process of building a discrimination-free Bangladesh.

To build a discrimination-free Bangladesh, fundamental changes are needed in the existing political-economic structure. One crucial step towards addressing inequality is reforming the country's taxation system. Currently, indirect taxes like duties and VAT disproportionately burden the common people. Shifting the tax burden to higher direct taxation on the wealthy would promote fairness in government revenue collection. This reform would alleviate the financial strain on low-income groups while ensuring that those with greater resources contribute more equitably to the nation's revenue. By increasing revenue collection and curbing tax evasion by the affluent, the government can allocate more resources to large-scale welfare programmes. Additionally, with an iron fist, the government must deal with corruption as it often hinders the implementation of pro-poor policies.

The education and healthcare sectors reflect the stark inequalities prevalent in Bangladesh. The World Health Organization recommends that at least 4.0 to 6.0 per cent of GDP should be allocated to education, and 4.0 to 5.0 per cent to healthcare. But Bangladesh allocates less than 2.0 per cent of GDP to education and 1.0 per cent to health. As a result, out-of-pocket expenditures on both health and education have been increasing every year, trapping many families into a cycle of poverty. The interim government has already established ten commissions to undertake various political, administrative, and institutional reforms. But these reform measures will remain insufficient unless the deeper, structural inequities embedded in the system are addressed. A society where money determines the quality of basic rights like education and healthcare is inherently unjust and perpetuates inequality. True reform requires dismantling the discriminatory structures in order to pave the way for a just and equitable Bangladesh.