Editorial
Per capita income approaching respectability
Income inequality remains a setback
THE bureau of statistics calculates the present per capita income in Bangladesh at US$690. This is quite a leap from the previous fiscal year's $608 and helps us get closer to the bottom of the middle-income bracket: $850 per capita, going by the World Bank standard.
Although the elevation to middle-income group is nuanced in that Maldives with a per capita income of $2000 still remains an LDC, there is nonetheless a reason for a country as populous and struggling as Bangladesh to be happy over the per capita increase which corresponds to the GDP growth rate at around 6 percent.
The fulfilling part of the news is that agricultural growth this fiscal estimated at 4.81 percent compared with 2.93 percent of last year, substantially contributed to the increase in income.
There is a flip-side though, that tends to dilute the sense of achievement. Going by the trends in recent years, income distribution has been asymmetrical resulting in yawning gaps between the rich and the poor. The wealth of the top ten percent of the population has increased manifold while the incomes at the bottom level have sharply dwindled over the years. Overall, the inequality index has increased. Add to this the likely fallout of the global recession on the fate of the world's poor, the full impact of which can only be measured after 2010. As it is, the World Bank estimates that poverty rate in Bangladesh would increase by 0.3 percentage point in FY 2010.
Let's not forget, despite sizeable endowment of natural resources, with even manageable populations, several countries in Africa and Latin America have been caught up in the whirlwind of socio-political instabilities, largely because of asymmetrical income distribution and proliferation in the number of absolute poor in them.
Uneven income distribution has been a constant problem with our economy. It is basically the product of policy, organisational and systemic failures, all rolled into one. We must seek solutions in stepped up agriculture, rural non-farm enterprises, a whole range of informal activities, both urban and rural, SMEs with the emphasis on letter 'S', sustained remittance inflows, and above all, IT connectivity. A substantial private sector involvement and employment generation aided by NRB investments can play an effective role in bridging the rich-poor gap.
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