The very independence of Bangladesh was underpinned by the pledge of establishing an egalitarian society. But after 47 years of independence it seems that dream has become more distant. Over the years society has become more unequal; a tiny class of people own most of the wealth and the rest majority find it hard to make two ends meet. The top 10 per cent of the people own roughly half of the wealth of the country, and trend of rising concentration of wealth and assets seems to be unstoppable. The irony is that, no serious effort has been made by any government in independent Bangladesh to stop the spree of amassing wealth & income by the few in society. The few have rather become stronger through government support and patronisation in the recent past.
A small number of people, especially the economists, occasionally talk about the problem of inequality in income and social deprivation in the name of economic freedom and market economy. Politicians, taking advantage of the absence of any expressed discontent of the people, talk much less about these issues though Bangladesh is one of the most unequal countries on earth in terms of sharing of income & assets. The main source of amassing wealth & income by the few is their connection with the government and strength of their amassed money.
There is a difference between market economy and capitalism, but to the crude capitalists they are synonymous. Market economy is one where markets work and markets work mean the players of the market compete and play in a level playing field. It is the responsibility of the government to create a level playing field for all - be them small or big players. Normally in a market economy ideas and talents are promoted and protected, while power of money is contained through various government-sponsored measures. In a freely competitive market economy there exists opportunity for players to grow big. The big & powerful players are taxed at every stage of their sharing of incomes at progressive rates by the government so that they do not become overbearing powers in society. When a few strong players control both the economy and the government then accelerating inequality in all forms becomes only a fiat accompli. In Bangladesh, we find a situation like that. Some people control business, including banking and insurance, and, simultaneously, wield tremendously influence with the government. Monetarily powerful people are now being bestowed with various government favours in the name of facilitating business. Bangladesh does not have any billionaire, officially, but there are possibly many people in the country whose wealth, if exposed and counted properly, will supersede the threshold level of income required to become a billionaire. Open economy produces billionaires, but in theory, at least, open economy says that the billionaires are to rise through hard work and using talents. In Bangladesh, many of the alleged hidden billionaires are bank loan defaulters and reputed to have strong links with governments, past and present.
In the recent years, the phenomenon of growth without employment is being observed in the economy. Economy is growing at a respected rate but is not generating commensurate employment. That means, either service sector is proceeding too fast or machines are replacing the men. In both the cases, in monetary terms, income may go up, but the receivers of that income will not be at par, the rich will receive much more than the working and the lower middle classes who supply most of the labour force in the economy. Bangladesh economy is not yet on the verge of entering a robotic age, but growth in income is not accompanied by rising employment. Growth without employment is the number one enemy to a fair distribution of income. Uncontrolled and unregulated rental incomes being accrued to the rich is also contributing hugely to the present situation of unbearable income inequality.
The very nature of market economy is that it breeds inequality, but, when regulated fairly and properly, it also ensures an equitable distribution of income. Inequality in income stems from wage and salary differentials, but it is more so from the inequality in asset holdings.
Unless society can put a tap on wealth holding it cannot expect to establish an egalitarian society. In our student days we heard a lot about the need for creating an egalitarian society; much less is talked about this issue now-a-days. The bitter truth is that the number of people prepared to speak in favour of egalitarianism has apparently dwindled.
Abu Ahmed is Professor of Economics at the University of Dhaka.
© 2017 - All Rights with The Financial Express