The widening rich-poor gap

The speakers in a pre-budget consultation meeting held on April 29 at National Press Club said that the income disparity between the poor and the richest five percent has increased from 18 times in 1990 to 84 times in 2004. The rich-poor gap in the country keeps widening as growth benefits have been unequally distributed. The extreme poverty and social deprivation tend to be higher in the case of matriarchal households.

The Poverty Monitoring Survey Report 2004 of the Bangladesh Bureau of Statistics (BBS) also revealed that income disparity between the rich and poor widened in the six years up to 2004. The household income comparison showed a grimmer picture: decreasing by four percent among the poor. On the other hand, the income of the rich increased to such an extent that the national household income raised by ten percent in the six years.

A look at the per capita income shows that it increased by 18 percent at the national level. But the share of the poor in this growth was very meager, accounting for only five percent, while income of the rich rose 20 percent. The participation of the poor in the sector of foreign remittance earning is almost nil which has further aggravated the disparity level between the rich and poor.

Though the number of people living below the poverty line in the country is reported to have been reduced from 44 to 40 percent over the last few years, more and more people continue to be rendered landless due to various reasons, including erosion of rivers, crop damage caused by frequent floods and droughts and extreme poverty. According to available statistics, the number of landless people has recorded a rise by 22 percent over the last 35 years. In 1972 only 28 percent of the country's total population were landless, but at present as many as 50 percent are landless.

Every year during the Bangla month of Kartik when Aush paddy is exhausted and Aman paddy awaits to be harvested, a severe joblessness for the agricultural labourers breaks out in many parts of the country, which is known as "Mora Kartik."

Researchers on chronic poverty in Bangladesh said that although Bangladesh has overcome famine, starvation is still persisting among the chronically poor people. According to the research paper, some 25 million people of the country are chronically poor.

The poor have low consumption, under-nutrition due to hunger, lack of access to basic health services, illiteracy, and other deprivations. The paper also revealed that about 19 percent of the people subsist on two meals for a number of months in a year.

China has launched a new deal for its farmers, aimed at raising rural incomes with a combination of crop subsidies, tax cuts and infrastructure spending in inland areas. The plan, called the "New Socialist Countryside" is the centre-piece of a commitment by Hu Jintao and Wen Jiabao, the president and prime minister, to cut income inequalities between the urban and rural populations. The government also hopes to use the plan to rein in the widespread and often illegal confiscation of rural land for development; a trend it believes jeopardizes China's ability to be self-sufficient in basic foodstuffs.

India is also making the effort to tackle rural poverty by launching the "National Rural Guarantee Scheme" with a large population living on less than $1 per day. Under the scheme, one member from each of India's 60 million rural households is guaranteed 100 days of work each year and will receive a minimum wage of $1.35 or an unemployment allowance if there is no work. According to a BBC report, the first phase of the program will cover 200 of the country's poorest and least developed districts and will be extended to the entire country over the next four years. Bangladesh might also wish to consider such a pro-poor scheme for the hardcore poor.

Reduction of poverty in any economy depends crucially on acceleration of economic growth. The present rate of economic growth in Bangladesh is over 5 percent on an average. But this growth has skewed the lives and living of the preponderance of the people, such as farmers, who have given the nation at least 12 bumper crops in the recent past. The farmers in our country are hard hit with the persisting problems of fertilizer and fuel scarcity which are making them poorer.

The main characteristic of our clandestine economy is that the rich-poor gap has been widening at an alarming rate. The poor are getting poorer and the rich richer. A section of people has become rich overnight with questionable means of consumption while another section (majority of people) is hard pressed to obtain two square meals a day. This scenario, coupled with the spread of tentacles of black economy, heightens the need for combating inequality.

Section 19(1) and (2) of the Bangladesh constitution states: "(1) The State shall endeavour to ensure equality of opportunity to all citizens. (2) The State shall adopt effective measures to remove social and economic inequality between man and man and to ensure the equitable distribution of wealth among citizens, and of opportunities in order to attain a uniform level of economic development throughout the Republic."

This constitutional guarantee against social exploitation has become torpid in the absence of initiative by the government.

The widening rich-poor gap has become so distinct that it does not even evade the notice of short-term visitors. Phil Reeves, a reporter of the British newspaper, The Independent, recently carried a report in his paper based on his short visit to Dhaka. The report entitled: "Bangladesh becomes land of plenty, for those who can afford it" said: "Bangladesh has always been the global brand name for poverty, an image periodically reinforced by cyclones and floods. Yet it does not always seem so. Will the growing display of consumer riches deepen the gap between the haves and the have-nots, hardening the strands of anti-Western Islamist sentiment in this generally moderate Muslim society?"

In fact, the struggle against poverty will never succeed without the strong political commitment by the government. The government should take a long-term view for durable solution to the chronic poverty, creating more jobs in the rural areas.

The Inequality Predicament Report on the World Social Situation 2005 (compiled by the UN) has identified the glaring economic and social inequality as the key predicament in the fight against poverty. The widening rich-poor gap in Bangladesh has reached such serious levels that social stability is threatened. Increased growth and poverty alleviation don't necessarily go together, unless the growth is pro-poor.

The highly skewed growth distribution has raised the income of the richest five percent of the population to 84 times that of the poorest five percent. Too much wealth in the hands of too few is plainly untenable. No amount of poverty alleviation measures under the PRSP will be able to halt the inexorable impulse of society towards polarization between the rich and poor unless the hardcore poor get a fair deal in policy decisions. The need for devising an effective tool to benefit the hardcore poor is imperative to allow them to escape the cycle of poverty.

ANM Nurul Haque is a columnist of The Daily Star.