Dearness allowance in time of deepening poverty

Read between the two pieces of news---one concerning the fall of 7.8 million more people into poverty over the past couple of years and the other savouring the formation of a committee for payment of dearness allowance for government employees---the instant reaction ought to be one of dismay. This is because the system defies any change to usher in a new Bangladesh free of discrimination. Of the 7.8 million new poor, 3.8 million have become extreme poor. All of them are victims of rising inflation. Worse, another 10 million people are at risk of slipping below the poverty line with continued inflationary pressure pummelling them.

All these disconcerting facts with many more a study by the Research and Policy Integration for Development (RAPID) found were disclosed at a workshop at CIRDAP auditorium. The keynote paper titled "Macroeconomic Situation and LDC (least developed countries) Graduation" went at great length to explain how it happened and what can be done to avoid further socio-economic disaster. Research director of the RAPID, Md Deen Islam, presenter of this keynote shows that extreme poverty rose to 7.95 per cent from 5.65 over the past two years. An inflation rate of more than 9.0 per cent has gnawed into the paltry incomes of the poor and the marginalised more than those of other affected segments of society. Inflationary pressure soared to a three-month high last month at 11.38 per cent with food, specially the staple, prices marking 13.80 per cent. This month all varieties of rice have already registered another round of price rise by Tk3.0 to 5.0 a kilogram.

It is against this backdrop, the government move to review the pay package of employees in government service has apparently been initiated. It looks innocent at the first look because logic behind this is to help government service-holders tide over the financial hardship facing them. But by any account this cannot be considered a judicious and pragmatic decision. Government employees are not the only ones who have been hit hardest. There are day labourers, workers, vendors and many more in the informal sector who are desperately struggling to survive this testing time. Once the dearness allowance will be announced, market will grow further volatile with essentials becoming dearer. This has been the tradition here. Arresting inflation is the solution.

Surprisingly, it has not been challenged by any quarter, not even by the coordinators of students who spearheaded the July-August mass movement. Is not the proposed payment of dearness allowance going to widen the discrimination further? Although the percentages for different categories of government service are yet to be determined, the senior secretary of the Ministry of Public Administration has left a hint. The hint is that the lower grades will be offered higher percentages and higher grades lower percentages of the interim allowance.

This is like applying the veneer of compassion for the low-grade government employees to hide the real intention ----a tactic the bureaucracy has been adept in using. Why should the top notches of bureaucracy deserve any such largesse when more people are joining the ranks of the poor and the marginalised? Their privileges and perks are atrociously higher compared to the meagre salary the low-grade employees draw. An 8th and 9th grade employee draws a pay package not exceeding Tk 20,000-21,000. But a secretary receives a salary more several times higher. The least said about the perks and privileges the better. So, rationality demands that the low-paid government employees alone are provided with such financial support. This also falls in line with the rallying cry of the student leaders to ease the yawning discriminations in society.

Even if the dearness allowance is offered to the low-grade employees, its repercussion on the market is expected to be negative for the consumers. It is most likely to be used as an excuse for another round of unbridled escalation of price hikes. Already, the economy is on a tailspin and the latest projection for GDP growth has been downsized to just 3.8 per cent.

This means that the contractionary monetary policy is hardly expected to contain inflation on the one hand and the low level of development spending on the other will shrink money flow as well as strangulate employment opportunities. Fresh investment in such a pessimistic financial regime is hard to come by and all avenues of growth may stagnate if not contract further.

When the economic outlook is so uninspiring, the offer of dearness allowance for government employees, particularly the top grades, comes as an affront to people who earn a pittance and are at a loss how to manage two square meals for their families. The interim government is waiving duties on import of several essential commodities thus sacrificing its revenue income but the businesses are becoming double beneficiaries of such concessions because prices are not at all brought down to the consumers' benefit.

It is the mindset of the privileged and the moneyed that is to blame. Their avarice and selfishness have crossed all limits and they are reluctant to mend their ways. Perhaps another strong campaign in the mould of the July-August movement against the self-seeking bureaucracy and the privileged who have not learnt a lesson from the unprecedented episode and still continue to amass wealth by means fair or foul will be required to dismantle the elitist preserve.

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