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Govt must investigate wealth growth, attend to inequality

Published: 00:00, May 30,2020

 
 

BANGLADESH coming to have led the top 10 fastest-growing wealth markets — Asia being home to six of them — in 2010–2019, as the latest US-based Wealth-X report shows, suggests that the country tops the rankings with ‘robust economic growth’ supported by ‘a young and expanding work force and deepening integration in regional manufacturing supply chain.’ The number of very high net worth individuals, with $5 million plus in net worth, has increased on an average by 14.3 per cent a year — as the report, ‘A Decade of Wealth’ released on May 14, says — with Vietnam, China, Kenya, the Philippines, Thailand, New Zealand, the United States, Pakistan and Ireland trailing Bangladesh. Bangladesh has surpassed the 2019 projected growth of 11.4 per cent of ultra-rich people, with $30 million in net worth, now called ultra high net worth individuals, until 2023 from 2018. But this all has brought to the fore matters of concern as it indicates that income inequality has widened in Bangladesh. It also suggests that the rich have benefited the most from the economic growth achieved in Bangladesh over the decade in question although, as the report says, the growth is partly ‘a reflection of having a low base of comparison’ as the country had a comparatively small number of wealthy individuals in 2010.

About 35 million people are officially reported to be living below the poverty threshold in Bangladesh and the number, as experts say, could be around 60 million if other vulnerable groups are taken into account. With the rich becoming richer and the poor poorer, experts also come to question the current level of inequality as measured in Gini coefficient by the Bangladesh Bureau of Statistics, which now stands at 0.483. They think the Gini coefficient, which has been static more or less at the current level since 2016, up from 0.458 in 2010 which is said to have been 0.36 in 1973, to have been underestimated. An approaching 0.50 is said to pose a high risk of social unrest. While the economic benefits created in the country appears not to have reached where they should have done, the situation, as it came up in the Wealth-X report, also calls out the government on finding the people who are becoming rich and investigate whether the money has been made through illegal means. The government should also establish whether there has been any connection between recent financial scandals, many of which have taken place in the banking sector, and the people who have become very high net worth individuals in a short span of time.

While the government must look into whether the increase in the number of very high net worth individuals in about a decade, which suggests a widening income inequality in the period, has been mired in illegality, it must also revise its economic and development policy to reach economic benefits to where they should do to narrow income inequality and reduce poverty. The government must also improve the overall governance to remain true to the liberation war promises of equality, human dignity and social justice.

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