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The Financial Express

Delving deep into rich-poor divide


Delving deep into rich-poor divide

A recent flagship report of the United Nations Research Institute for Social Development (UNRISD) said the global health crisis doubled the wealth of the 10 richest men in the world while sending nearly 120 million people into extreme poverty.
The report titled '2022 Flagship Report: Crises of Inequality: Shifting Power for a New Eco-social Contract' released on October, 21, 2022, said wealth distribution is more unequal compared with income distribution with the greatest concentration at the very top.
"This accumulation had been accelerating in recent years reaching staggering numbers during the COVID-19 pandemic, during which a new billionaire was created every 30 hours," the report said.
The situation was even worst in Bangladesh. Just ahead of the pandemic having hit the world, economists in September 2019 made an urgent call for measuring growth on an equal basis, as Bangladesh was reaching the danger level of income inequality.
Economists expressed the fear that the country was at a danger level in the income-inequality index, although it was not measured during the last six years.
In 2016, Bangladesh was on the verge of danger level in the Gini coefficient index of income inequality. Gini coefficient is one of the key measures that are used globally in calculating income inequality. The country that crosses 0.5 in the Gini index is being categorized in the state of dangerous income inequality.
The range of coefficient in Bangladesh was 0.36 in 1974. The matrix reached 0.483 in 2016, close to the mark of dangerous inequality state.
"Inequality is a driver, an amplifier and consequences of multiple crises, creating a vicious cycle," said the report of the autonomous research institute within the UN system.
Vulnerable and marginalized groups are falling behind, elites shield themselves and often exploit a crisis for their own gain, it said.
Like other least developed countries, Bangladesh also was affected by the prolonged impact of the pandemic, devaluation of the local currency against the US dollar, supply-chain disruption due to the Russia-Ukraine war, and energy-price hike that made commodities costlier in both local and international markets.
The UNRISD report said the average stimulus per capita spending in developed countries was US$ 10,000 during the Covid-19 crisis compared to $ 20 in least developed countries in 2020. It said the Covid-19 crisis led to a 3.4 per cent decrease in global output in 2020.
Urban-centric health, education, employment opportunities and other basic citizen benefits along with huge size of informal economy made equal-distribution-of- wealth system worst in Bangladesh.
Some case studies reveal the evidences of how inequality is persistent in Bangladesh and hitting the marginalized people hard.
Shirin Akter, a middle-aged lady working as a computer operator in a restaurant, used to save the interest amount of her bank deposits earlier. Now-a-days, she finds it difficult to make both ends meet. With the growing commodity prices in the international market her living cost surged exorbitantly. She felt her income started shrinking following the global economic turmoil.
"Following the Covid-19 outbreak in the country, I have been spending the savings for my household expenditure as the cost of living has surged beyond the earning limit," she said.
Ms Akter is among the hundreds of thousands of middle-income group of people who are now compelled to spend their savings for household expenses.
However, this correspondent witnessed altogether an opposite picture when she recently visited a couple of restaurants in the posh Dhanmondi area.
Many of the expensive restaurants, including Domino's Pizza and Yum Cha, were fully occupied on the holiday. There were long queues of gourmets outside who were waiting for hours to book a seat in those posh food shops.
An identical scene was also seen in the Star Cineplex at Bashundhara Shopping Mall in the city's Panthapath area, where long lines were formed for booking movie tickets.
On the ground floor of that Shopping Mall, a UK-brand Body Shop was found where a makeup-cleansing oil (camomile) was selling at Tk 2890 (US$ 289) per bottle (160 ml).
These scenes reflect a part of the growing inequality in society where the well-off people are accumulating more resources while a vast majority's income is declining.
Economists say job loss of many workers, large size of informal sector, wealth-distribution gap, faulty direct-taxation measure, syndicates and price manipulation in kitchen markets worsen the miseries of the vast majority.
On the contrary, well-off people having enough to spare are getting wealthier due to escalation of value of both movable and immovable assets.
"Economic inequalities, which have spiralled upward during neoliberal globalization, lie at the heart of power asymmetries and elite domination," the UNRISD flagship report said.
The Human Development Index 2021 showed that the bottom 40 per cent of the population in Bangladesh held 21 per cent of all wealth whereas the richest 10 per cent held 27 per cent.
A report by Wealth-X, a US-based research organisation, notes that the number of ultra-wealthy people in Bangladesh increased faster than in any other country around the world between 2010 and 2019.
Bangladesh ranked first among the top 10 fastest-growing wealth markets in the world during the period, says the report, released in May 2020.
The Wealth-X report, titled 'A Decade of Wealth', said the size of the wealthy population in Bangladesh owning $5.0 million or above in net worth increased by, on average, 14.3 per cent each year.
Job loss during the pandemic, large informal sector, the wealth distribution gap, faulty direct taxation, market oligopolies, etc., had been worsening the misery of a vast majority of people while, on the contrary, the rich were getting richer through wealth inflation.
As income and resource disparity is high in Bangladesh, the number of new poor has been on the rise since the COVID-19 invaded the country in March 2020.
The number of new poor in the country stands at 30.9 million, which is 18.54 per cent of the population, according to a multisectoral research on inflation, titled Coping and Recovery Challenges, jointly conducted by the Power and Participation Research Centre (PPRC) and the BRAC Institute of Governance and Development (BIGD).
UNRISD report suggested creating pathways towards a new eco-social contract based on visions of justice, equality and sustainability.
It underscored the need for a new development model for social, economic and climate justice.
The flagship report also suggested rebalancing the existing power structure and creating new alliances to achieve transforming changes.
The UNRISD report quoted Winnie Byanyima, Executive Director of UNAIDS as saying "the damage wrought by COVID-19, HIV and other pandemics is not the result of the viruses alone, but of how they make space in, and expand, the fissures of unequal society." "Our world is in a state of fracture and the social contract is broken," the report said.

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