Bangladesh Faces Income Disparity Despite Economic Success

By Shahriar Sharif
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150825-BD-rice-620 Bangladeshi farmers harvest rice on the outskirts of Dhaka, May 25, 2015.

Bangladesh has made great strides in expanding economic growth, extending life expectancy and cutting extreme poverty and illiteracy, yet experts warn that income disparity remains a key problem requiring urgent attention.

For a first-time visitor to Dhaka, it’s hard to escape the sight of shiny imported cars jockeying for space with buses, trucks, three wheelers and other vehicles that clog the streets of the Bangladeshi capital.

Glass high-rise buildings, five-star hotels and other gleaming projects now dominate the skyline, defying an indelible stereotype of Bangladesh as a country mired in deep poverty, overpopulation and endemic corruption.

But outside the capital, the vast majority still struggles to eke out a daily living.

That reality was made painfully stark last month, when 27 people died in a stampede in the northwestern city of Mymensingh, 115 km (71 miles) from Dhaka. Hundreds of impoverished men and women were scrambling to collect donations of Eid clothes distributed by a wealthy businessman there.

And, who could forget the recent heartbreaking stories of desperate Bangladeshis boarding rickety smugglers’ boats as they departed in search of better job prospects abroad?

It is a paradox that has baffled development experts, economists and ordinary folks alike.

‘Growing inequality could threaten the gains’

Just last year, Bangladesh’s central bank revealed that the number of multi-millionaires had grown in dollar terms – from just 47 in 1975 to 46,136 in 2014.

“These numbers of multi-millionaires serve to highlight the widening gap between rich and poor and how a tiny minority is getting richer and richer,” Binayak Sen, a leading economist and research director of the Bangladesh Institute of Development Studies, told BenarNews.

“Growing inequality is the biggest obstacle to social progress and overall economic development and Bangladesh must address the issue urgently if it wants to be a viable nation,” he added.

Hossain Zillur Rahman, another economist, said Bangladesh should stop boasting about the rapid progress made since the nation’s birth 44 years ago, and instead grapple with formidable challenges ahead.

“These days we hear a common refrain that Bangladesh is no longer faced with the near-famine situation it experienced just after independence in 1971 and it has made great strides economically in the past two decades,” he told BenarNews.

“This is all true. But in 2015, should we keep comparing our condition with 1971?” he asked, adding, “We must look forward to the future and aim to better the lot of the struggling masses, and not just a tiny minority.”

Other experts and civil society members also acknowledge that Bangladesh has made significant inroads in its fight against poverty. But they warn that growing inequality could overshadow the spectacular success the country has achieved in health and education.

Bright spots

Despite the inherent challenges that Bangladesh faces, independent observers and international experts cannot ignore the dazzling success it has achieved in the past decade, especially in economic and social arena.

According to the World Bank and Bangladesh Bureau of Statistics (BBS), the country has cut the number of hardcore poor by nearly half – from 48.9 percent in 2000 to 25.6 percent in 2010 – for those who earn less than U.S. $2 a day. The World Bank devised that criterion as a measure of extreme poverty.

With its gross domestic product (GDP) growing consistently for the past 10 years – at an annual rate of above 6 percent – the poverty rate is expected to drop to 8.9 percent by the year 2020 from the existing 12.9 percent, according to the Planning Commission.

A leading expert on poverty alleviation attributes this remarkable achievement to a combination of things: the commitment by successive governments to poverty reduction; the contribution of non-government organizations (NGOs); and the critical role of micro credit in financially assisting people who lack assets.

“All this has led to a significant increase in agriculture production and helped lift a vast majority out of deep poverty, who used the micro loan to start small businesses, enabling them to earn a regular income,” Mahbub Hossain, a leading economist who now heads BRAC, the world’s largest NGO, told BenarNews.

Earlier this year, Bangladesh, a perennial importer of grain, for the first time exported 50,000 tons of rice to Sri Lanka – and after feeding 160 million mouths.

Bangladesh is also making noticeable gains in social sectors – especially in health and education.

In just 30 years, its life expectancy has risen from 55 to over 70.30 years, surpassing India (66.21), Nepal (67.98) and Pakistan (66.44) in South Asia.

Its literacy rate has jumped to nearly 60 percent from just about 40 percent two decades ago.

Bangladesh has also shown remarkable progress in girls’ education as well as reducing infant and maternal mortality, prompting Indian economist and Nobel laureate Amartya Sen to remark, “India should take lessons from Bangladesh about how it can improve its record in these areas.”

Economic gains

Besides the social sectors, Bangladesh’s economic indicators have caught the attention of the international community, prompting investment bank Goldman Sachs to include it on its list of the “Next 11,” alongside Egypt, Iran, South Korea, Philippines, Pakistan, Turkey, Mexico, Nigeria, Indonesia and Vietnam.

In a 2005 report, Goldman predicted that these countries would be the next emerging economies after Brazil, Russia, India and China, which are collectively known as the BRIC economies.

Besides posting impressive GDP growth, Bangladesh’s income from remittances and foreign currency reserves have grown substantially; so has its per capita income.

According to the Bangladesh Bank, the country now has a reserve of over U.S. $26 billion. The healthy reserve has emboldened it to fund the biggest infrastructure project, the U.S. $3 billion-Padma Bridge, on its own.

Its remittance income has also grown phenomenally, surpassing U.S. $22 billion – a jump of nearly 50 percent in10 years. Per capita income has also grown, going from U.S. $800 a decade ago to U.S. $1,300 today. This has resulted in the World Bank promoting Bangladesh in status from a least developed country to a lower middle-income one.

The growing income level indicates that Bangladesh will be able to reach middle-income country status by 2021, the nation’s 50th anniversary, when the per capita income is expected to top U.S. $2,000.


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