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SPECTACULAR ECONOMIC SUCCESS

WB, ADB highlight topup growth that largely fails the poor

Faruque Ahmed
As per World Bank (WB) and Asian Development Bank (ADB) report Bangladesh has achieved spectacular economic success in recent past but many raised the question how far it has accrued the economic benefits to the poor and lower income people when widening income gap is making their condition rather worse.
The numeric success is impressive but the concentration of wealth and economic benefits to a section of people around the ruling elite is the other face of the development denying the fruits of such development to common people.
So the lavish praise of economic success of Bangladesh saying Bangladesh economy is one of the five fastest growing in the world by WB or that it is the fastest growing economy in the Asia Pacific region as said by ADB is largely focused to big projects lacking inclusive development to all.
The comment by British High Commissioner in Dhaka Mr Dickson last week that Bangladesh economy is emerging as a giant in world stage also reminds many that plenty benefit of such impressive growth must be available to all.
But question arises whether such benefits are going to bring noticeable improvement to the living condition of all people or the higher numeric GDP growth is just pouring fortune to people in the corner of the ruling political establishments and the rich giving the essential political support to this government continuity in power.
It appears as the space of GDP growth is growing, the income gap between the rich and the poor in the country is also widening. In the opinion of Prof Rehman Sobhan the country can’t be and will not be able to sustain political democracy if economic democracy fails.
He laid emphasis on improving political democracy to sustain economic progress. The democratic process will become fragile if economic justice fails. It sounded to many like a veil warning given the growing control of wealth by few, in addition to collapse of election system and denial of democratic space to the opposition.
At a pre-budget discussion on Wednesday in the city, he said more the economic disparity will grow more the political discrimination will continue to happen to protect unearned wealth. Because the prosperity of the ruling elite and wealthy groups is essentially built on deriving the poor and the common people and the political system so created is protecting them.
They have already captured most funds of all public banks and the ownership of all private banks are also in the hands of powerful people and wealthy business syndicates. The government is not capable to recover huge outstanding loans while most banks are suffering from liquidity crisis.
Instead the government is bailing out such banks with huge budgetary allocation every year now to keep the banks functioning. Collapse of the banking system will be suicidal politically to the government. So a new system of loan rescheduling has been introduced which will at least protect big defaulters for 12 years with two percent down payment to avail of the scheme.
It will no doubt reduce the number of defaulters most of them are now enjoying exoneration under a previous rescheduling in 2017. The presence of big defaulters is now eye catching in the leadership role in coveted public posts including ministers, MPs and government advisers.
The government is using tax payers money not only to keep banks from melting down but also giving costly financial incentives to big businesses routinely increasing utility prices such as for gas, electricity and water. Subsidy to common people is no more but big subsidies being regularly paid to rich people who are owners of independent power plants producing electricity and selling it to the government at an exorbitant price.
Distinguished Fellow of Center for Policy Dialogue Dr Mustafizur Rahman said such policy of the government is only concentrating wealth and economic benefits to a few. Presenting research statistics, he said the 32 times income gap between the rich and the poor in the country 10 years ago has now become 121 times.
Global report said Bangladesh is only second after Nigeria in the world where rich amassed wealth more than anywhere at a time we claim that the poverty level in the country has slowed down to 21 percent from 34 percent several years ago.
Evidently all budgetary systems is now focused on serving the cause of the rich and big business houses. The government is now almost openly justifying such policies in the name of accelerating growth. Finance Minister AHM Mustafa Kamal told the media two weeks back that in the name of recovery of default loan he can’t send big businessmen to jail.
The interest of the economy does not allow it to happen, he said. So he has resorted to cosmetic way of reducing default loans and the number of defaulters remodeling rescheduling system from maximum 3 years earlier to 12 years now. At the end most such loans may be missing.
The WB and the ADB reports have essentially highlighted the growth in which the poor can’t expect much except trickled down benefits. The fact is that about 70 percent of MPs are now businessmen including the finance minister and they are using the state to control resources – be it laundering bank money or manipulating funds from big projects.
It is clear that corruption and misuse of bidding process is key to such amassing of wealth by few. So both reports have equally emphasized on combating corruption, improving governance, efficiency of the government and reforms to regulatory system. Easing of doing business must be addressed while effective recovery of default loans must be achieved before it hits most banks to collapse.
Bangladesh needs higher growth and accelerated growth but it must be inclusive to benefit all. 11.04.2019.

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