Income Disparity on the Rise

Economic growth not reaching the poor

DHAKA, Bangladesh, Oct 19 2017 - The Bangladesh Bureau of Statistics unveiled the report “Household Income and Expenditure Survey (HIES) 2016” on October 17. It is the most exhaustive nationwide survey carried out and is usually brought out every five years or so. What it tells us is that the income inequality between the rich and poor has widened with the top 10 percent of the population now having an income share of 38.16 percent, which is 2.32 percent higher than what it was in 2010. Whereas, the bottom 10 percent of the population has half (1.01 pecent) of the income share it had in the year 2010 (2 percent). Indeed, poverty reduction has also slowed down a full 0.5 percent over this period.

Experts have been calling for pro-poor policies that would involve the government making investments to boost growth in the farm sector and to cater to sectors that would generate jobs, which in turn would help growth in all segments of the population. This is important because the manufacturing sector is both capital-intensive and technology-centric; the growth in jobs in the rural sector can only happen if there is growth in agriculture. We simply cannot discount agriculture as it employs 42 percent of the labour force and hence any slowdown here will have ramifications for income disparity.

What HIES 2016 tells us is that there has not been enough research and development in agriculture to bring about more crop diversity. The mere expansion of safety net programmes is not going to be enough, especially where there is confusion about who ought to be the beneficiaries. In other areas, the report has highlighted quality over quantity, particularly education. While health and living conditions of people have generally improved, we require a rethink at policy level about where our growth will come from and how the benefits of that growth can reach the vast multitude of the poor and ultra-poor.

This story was originally published by The Daily Star, Bangladesh

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