Abdul Bayes: Professor of Economics at Jahangirnagar University. He can be reached at e-mail: abdulbayeseyahoo.com
THE aim of all developmental drives, in Bangladesh and beyond, is to reduce hunger and malnutrition that afflict a vast number of people. Hunger, a general term related to not getting enough to eat, is possibly the worst form of capability deprivation. In fact, it is a denial to development and freedom.
Disconcertingly, however, the twenty-first century dawned with some disappointing disarray allegedly ascribed 'dirty developments'. In a world that takes a pride in plenty, prosperity and progress, millions of people remain chronically undernourished and food insecure; a little over billion live on the equivalent of less than a dollar per day. It's not very difficult to grasp the gruesome gravity of the pitiful position: many people don't have enough to eat to keep them on an even keel. That means that they are in a state of hunger - chronic or transitory.
The ugly face of the discordance between wealth of the few and the woes of the millions is unveiled by an eminent economist named Kausik Basu. Leafing through Forbes magazine and some World Development Reports, he contends that total income (in 1998) of Hollywood's richest 50 individuals would exceed the total income of Burundi's entire population of 7 million. If Bill Gates -- supposedly spearheaded by a spending-spree -- decided to encash and consume the increase in the value of his total assets that he reaped over the past year, he would be able to consume more than the total annual consumption of the 60 million people of Ethiopia. "These numbers reflect both the phenomenal scope for wealth and economic well-being that the modern world makes possible and also how easy it is for this enormous potential to bypass large masses of humanity". But have things changed since Basu exposed the dark side of development? Possibly it has not changed. The world is getting wealthier when, allegedly, woes of the millions are mounting.
A priori, the perception was that inequality would wane, if not wiped out, through spill-over or "trickle down" effects during the process of growth and accumulation. In other words, Nobel laureate Simon Kuznet's hypothesis would work where initial phases of growth would witness rising inequality and later phases would observe a reduction in inequality. But that didn't seem to have happened in many countries. To corroborate the concern, the state of 'poverty in plenty' can be highlighted through the following frightening facts:
* About 925 million don't have enough to eat - more than the population of the USA, Canada, and European Union;
* Ninety eight per cent of world's hungry live in developing countries - 65 per cent living only in seven countries: India, China, DRP Congo, Bangladesh, Indonesia, Pakistan and Ethiopia;
* Women make up a little over half of the world's population but they account for 60 per cent of world's hungry;
* A malnourished child dies every seven seconds; and
* The cost of under-nutrition to national economic development is estimated at US $20-30 billion per annum.
Thus, the failure to fight against hunger may turn out to be a holocaust. If allowed to go unabated, the "have-nots" might swell the society to make hell the lives of the 'Haves' -- a message that abounds history. Hunger hurts the whole society, not the hungry ones alone. The sooner we feel it, the better it is.
As far as Bangladesh is concerned, it can possibly boast of a rising economic growth rate approximating 7.0 per cent per annum. Paripassu the growth, the incidence of income poverty has gone down by a little over 1.0 per cent per year during the last decades, It is estimated that poverty level now stands at 44 per cent in rural areas compared to 60 per cent in the past. It is further found that six - as against 15 in early periods - in each 100 rural households can not meet three satisfactory meals a day. Roughly two-thirds of households do not have access to electricity. Infant and maternal mortality rates have fallen over time but Bangladesh is a country with one of the highest mortality rates in the world. The inequality of income, as reflected by gini co-efficient, has been rising to reach 0.47 to indicate growing inequality of income or unequal distribution of the growth-pie. The bottom 20 per cent has been losing the share in income while the top 10 per cent had been increasing the share.
The principal causes of inequality in the society are loan defaults, rising land prices and corruption. Corruption - mostly bribes and kickbacks - is said to have claimed roughly 2.0 per cent of GDP every year. There are other faces of corruption. Over-and under-invoicing of imports and exports have caused huge amount of foreign exchange to fly out of the country. Just think of the massive amount of money amassed through corruption or collusion in the share market. More painfully, few of them are alleged to be close with policy- makers. Thus, to see a poverty-free Bangladesh means seeing a corruption-free society. The war against poverty is the war against corruption.
Inequality and poverty in the economy cannot be reduced only through adhoc measures like subsidies, rebates, doles etc. It needs a structural change in the operation of the institutions - a matter of deep political commitment -through which people translate their assets into incomes. For example, it requires reforms of the markets and judiciary - two of the institutions that serve the poor. If small investors go broke due to the manipulations in the share market, and the sharks are shielded despite violation, it means weak institutions cause inequality and poverty. Inequality is inevitable with economic growth but the degree of inequality could be controlled via raising the elasticity of poverty reduction with respect to growth. The elasticity coefficient is very low in Bangladesh, say less than 0.60, compared to a rate of more than 2.0 in other countries such as Vietnam. It means, a 1.0 per cent increase in economic growth in Bangladesh reduces poverty by much less than 1.0 per cent, while the same 1.0 per cent increases in economic growth in Vietnam more than doubles poverty reduction.
Thus, the poor must have participation in the process of economic growth. Massive exploration of mining may increase growth at the cost of widening inequality in the society but massive growth in agriculture may result in growth with fair distribution. Agricultural growth, labor intensive manufacturing, widely distributed non-discriminatory quality education, reduction of digital disparity etc., could meet both ends: more pleasure, less pains. There is no pleasure in plenty unless we can reduce the pains of poverty in the society.
http://www.thefinancialexpress-bd.com/more.php?news_id=133718&date
THE aim of all developmental drives, in Bangladesh and beyond, is to reduce hunger and malnutrition that afflict a vast number of people. Hunger, a general term related to not getting enough to eat, is possibly the worst form of capability deprivation. In fact, it is a denial to development and freedom.
Disconcertingly, however, the twenty-first century dawned with some disappointing disarray allegedly ascribed 'dirty developments'. In a world that takes a pride in plenty, prosperity and progress, millions of people remain chronically undernourished and food insecure; a little over billion live on the equivalent of less than a dollar per day. It's not very difficult to grasp the gruesome gravity of the pitiful position: many people don't have enough to eat to keep them on an even keel. That means that they are in a state of hunger - chronic or transitory.
The ugly face of the discordance between wealth of the few and the woes of the millions is unveiled by an eminent economist named Kausik Basu. Leafing through Forbes magazine and some World Development Reports, he contends that total income (in 1998) of Hollywood's richest 50 individuals would exceed the total income of Burundi's entire population of 7 million. If Bill Gates -- supposedly spearheaded by a spending-spree -- decided to encash and consume the increase in the value of his total assets that he reaped over the past year, he would be able to consume more than the total annual consumption of the 60 million people of Ethiopia. "These numbers reflect both the phenomenal scope for wealth and economic well-being that the modern world makes possible and also how easy it is for this enormous potential to bypass large masses of humanity". But have things changed since Basu exposed the dark side of development? Possibly it has not changed. The world is getting wealthier when, allegedly, woes of the millions are mounting.
A priori, the perception was that inequality would wane, if not wiped out, through spill-over or "trickle down" effects during the process of growth and accumulation. In other words, Nobel laureate Simon Kuznet's hypothesis would work where initial phases of growth would witness rising inequality and later phases would observe a reduction in inequality. But that didn't seem to have happened in many countries. To corroborate the concern, the state of 'poverty in plenty' can be highlighted through the following frightening facts:
* About 925 million don't have enough to eat - more than the population of the USA, Canada, and European Union;
* Ninety eight per cent of world's hungry live in developing countries - 65 per cent living only in seven countries: India, China, DRP Congo, Bangladesh, Indonesia, Pakistan and Ethiopia;
* Women make up a little over half of the world's population but they account for 60 per cent of world's hungry;
* A malnourished child dies every seven seconds; and
* The cost of under-nutrition to national economic development is estimated at US $20-30 billion per annum.
Thus, the failure to fight against hunger may turn out to be a holocaust. If allowed to go unabated, the "have-nots" might swell the society to make hell the lives of the 'Haves' -- a message that abounds history. Hunger hurts the whole society, not the hungry ones alone. The sooner we feel it, the better it is.
As far as Bangladesh is concerned, it can possibly boast of a rising economic growth rate approximating 7.0 per cent per annum. Paripassu the growth, the incidence of income poverty has gone down by a little over 1.0 per cent per year during the last decades, It is estimated that poverty level now stands at 44 per cent in rural areas compared to 60 per cent in the past. It is further found that six - as against 15 in early periods - in each 100 rural households can not meet three satisfactory meals a day. Roughly two-thirds of households do not have access to electricity. Infant and maternal mortality rates have fallen over time but Bangladesh is a country with one of the highest mortality rates in the world. The inequality of income, as reflected by gini co-efficient, has been rising to reach 0.47 to indicate growing inequality of income or unequal distribution of the growth-pie. The bottom 20 per cent has been losing the share in income while the top 10 per cent had been increasing the share.
The principal causes of inequality in the society are loan defaults, rising land prices and corruption. Corruption - mostly bribes and kickbacks - is said to have claimed roughly 2.0 per cent of GDP every year. There are other faces of corruption. Over-and under-invoicing of imports and exports have caused huge amount of foreign exchange to fly out of the country. Just think of the massive amount of money amassed through corruption or collusion in the share market. More painfully, few of them are alleged to be close with policy- makers. Thus, to see a poverty-free Bangladesh means seeing a corruption-free society. The war against poverty is the war against corruption.
Inequality and poverty in the economy cannot be reduced only through adhoc measures like subsidies, rebates, doles etc. It needs a structural change in the operation of the institutions - a matter of deep political commitment -through which people translate their assets into incomes. For example, it requires reforms of the markets and judiciary - two of the institutions that serve the poor. If small investors go broke due to the manipulations in the share market, and the sharks are shielded despite violation, it means weak institutions cause inequality and poverty. Inequality is inevitable with economic growth but the degree of inequality could be controlled via raising the elasticity of poverty reduction with respect to growth. The elasticity coefficient is very low in Bangladesh, say less than 0.60, compared to a rate of more than 2.0 in other countries such as Vietnam. It means, a 1.0 per cent increase in economic growth in Bangladesh reduces poverty by much less than 1.0 per cent, while the same 1.0 per cent increases in economic growth in Vietnam more than doubles poverty reduction.
Thus, the poor must have participation in the process of economic growth. Massive exploration of mining may increase growth at the cost of widening inequality in the society but massive growth in agriculture may result in growth with fair distribution. Agricultural growth, labor intensive manufacturing, widely distributed non-discriminatory quality education, reduction of digital disparity etc., could meet both ends: more pleasure, less pains. There is no pleasure in plenty unless we can reduce the pains of poverty in the society.
http://www.thefinancialexpress-bd.com/more.php?news_id=133718&date
No comments:
Post a Comment