Friday, 21 January, 2022

Turning the Tide on Inequality

Dr. Ranjan Roy

Turning the Tide on Inequality
Dr. Ranjan Roy

Inequalities remain pervasive, elucidates the World Inequality Report 2022. COVID-19, a public health crisis, is increasing multiple kinds of poverty (e.g., rural and urban poverty) and inequality. Marginalised populations, including women, indigenous populations and slum dwellers, have borne the brunt of the fallout from the pandemic. The UN indicates the COVID-19 pandemic financial crisis is reversing progress made in decreasing income inequality.

Inequality has emerged as a ‘roadblock’ to progress in Bangladesh. An overarching strategy is crucial to address economic (e.g., income and employment), socio-political (gender and education) and health (health care and nutritional) inequalities. Numerous factors that are creating a vicious cycle of economic inequality, notably income inequality, are major challenges for Bangladesh. These have indeed been on a rising trend in this country as growth accelerated. These inequalities are accompanied by wealth inequality. These inequalities as well as other forms of inequalities like poverty, wage, age and employment perpetuate economic inequality.

Massive job loss, low paid and precarious jobs that limit access to a decent income are obvious reasons for causing economic inequality amid COVID-19 pandemic. Other causes are low levels of education and skills, being members of minority ethnic groups and living in a very disadvantaged community. Income inequality is usually larger in cities than in rural areas.

The COVID-19 pandemic has played an important role in uncovering and amplifying numerous health inequalities in this country. Many factors cause health disparities, including inadequate access to healthy and nutritional foods, poor quality of care, social conditions (poverty and violence) and environmental conditions (poor air quality). Inequalities in health have led to dire consequences in COVID-19 morbidity and mortality, studies estimate.

Gender inequality has sharply increased during this pandemic, although they exist since time immemorial. Of late, situations regarding discrimination and violence against women and girls, child marriages and women’s job losses have deteriorated, placing gender equality achievement in jeopardy. Women receive less education than men, often confront barriers in labour markets and receive unequal pay. Unemployment, poverty, illiteracy, sexual harassment, anti-female attitude, social customs and belief causes a harsh reality of gender inequality. The government must work on several fronts to minimise this plethora of inequalities. Building a ‘Zero Poverty Country’ is the key to reducing inequality.

A principal vision of ‘Vision 2041’ stipulates “Poverty will become a thing of the past in Sonar Bangla.” To realise this vision, more proactive measures must be undertaken. The government must place emphasis on investment in ‘agriculture,’ a key strategy to alleviate poverty, by providing reasonable prices for farm products, diversifying agriculture, ensuring quality seeds and developing agricultural marketing.

There are many avenues for exploiting the manufacturing sector, including agro-based and SMEs. Bangladesh needs to pursue a strategy to promote labour-intensive exports that largely employ unskilled or semi-skilled labour. The success of ‘Ready-made Garment’ is an example of this strategy. Beside RMGs, major labour-intensive industries are jute goods, leather products, shoes (both leather and non-leather), furniture and electronics. These industries require an incentive environment similar to that found in RMG. Replicating policies for non-RMG exports is the way to go as long as high tariff protection prevails. Investing in small manufacturing enterprises (SMEs) is a proven weapon to reduce poverty since they outnumber large firms, employ vast numbers of people and help to shape innovation.

SMEs in Bangladesh still lack dynamism, suffering from low productivity, low investment, low skills and low technology. Rural SMEs are playing a key role in building the rural economy. Transforming the rural economy, government initiatives are crucial to address key difficulties such as lack of necessary funds, local level technology, patronisation, etc. Pro-poor and inclusive growth is a major strategy to narrow down inequalities. The Eight-Five Year Plan (8FYP) develops strategies for accelerating pro-poor and inclusive growth. Key areas are, inter alia, export-oriented manufacturing-led growth, infusing dynamism in the cottage, micro, small and medium enterprises (CMSMEs), promoting ICT-based entrepreneurship and strengthening overseas employment.

The 8FYP also formulates strategy for COVID-19 GDP growth recovery. This strategy puts emphasis on protecting the jobs and enhancing new jobs in the SMEs that presently employ an estimated 28 million people. Other areas of attention include implementing the stimulus and relief package, strengthening social protection delivery and increasing funding for poverty-focused social protection programmes. However, the government is good at developing strategies but they are not so good at implementing these strategies. Necessary initiatives are needed for removing structural, institutional and systemic barriers to attain the fruits of these strategies.

In tandem, effective and efficient measures are critical to implement policies for pro-poor and inclusive growth such as macroeconomic stability, knowledge-based economy, good governance and social protection programmes.

The government should introduce innovative policy instruments to benefit the poor, for example, using ‘block grants’ for hard-to-reach areas like char lands and coastal regions to deliver basic social services in health, education, agriculture, and rural roads, water, and sanitation.

Government should introduce well-designed and effective ‘minimum wages’ for all workers to reduce inequality. Minimum wages certainly can help the rapid income growth among the bottom 40 per cent and can ensure “a just and equitable share of the fruits of progress to all,” according to the ILO. By contrast, poorly designed minimum wages can put workers’ well-being at risk, undermine effective implementation and risk encouraging informality.

Reducing income inequality through safety net and social protection programmes have been identified by the flagship policy documents like the Vision 2041. Studies stipulated that social protection is the fundamental tool for managing, preventing and overcoming situations that adversely affect people’s well-being.

 Widespread devastation of the COVID-19 pandemic (a) elucidates the utmost importance of strengthening social protection and (b) calls for designing a gender-responsive social protection to save people’s life and livelihoods. The latter issues are required to pay due attention to the gender-specific dimensions of rural poverty and vulnerability in devising social protection programmes.

Increasing universal access to quality education is significant to address all sorts of inequalities. To this end, government efforts are indispensable to overcome structural (e.g., resource inadequacy, supply-driven skills development, and centralised management systems) and operational (e.g., dysfunctional learning assessment, harmful political interference and proliferation of private institutions) challenges. The government has brought about reforms in the education systems by enacting several education policies (National Education Policy) and strategies. However, the very slow and fragmented implementation of these instruments does not produce desired results.

Improving rural infrastructure, especially roads and electrification, is significant for paradigm shifts in the rural agrarian economy and minimising the digital divide. The government has been focusing on a guiding principle: “our village, our town.” To this end, investments in rural infrastructure and farm technology must be accelerated. Policies must be envisaged to expand, diversify, develop agro-processing, value chains and exports towards rural job creation. Categorically, the untapped opportunities of livestock, dairy, fisheries, fruits, vegetables and flowers must be further seized.

Reducing inequality for women and men have been identified as key objectives in the 2030 Sustainable Development Agenda. Likewise, a range of policy instruments (for example, the 8FYP and Vision 2041) have underlined means and measures for eliminating the inequalities. Deft economic management and strong political leadership are, therefore, indispensable to undertake bold initiatives to implement policy instruments for turning the tide on inequality.


The writer is a professor in the

Department of Agricultural Extension and Information System, Sher-e-Bangla Agricultural University, Dhaka