GDP growth' had been in the centre of discussion during pre and post budget sessions. Whether projected growth of 7 per cent could be achieved through this budget was a major concern. Most of the discussions ended up with the notion of scepticism indicating political instability, infrastructural weakness and dwindling public spending. Soon after the budget, we are happy to be announced as a 'lower- middle income country' that brings back the issue of GDP growth to be 'trapped in 6 per cent'.
GDP, Simon Kuznet's brain child, has been used worldwide as a general indicator to quantify how well a country's economy is performing (since 1934). Despite its array of drawbacks and controversy (and also mentioned by Kuznet himself), GDP is being trusted and adopted around the paradigm of economy. Though it talks about growth but doesn't address destruction; it measures income but leaves aside inequality, social cohesion, norms and many more, yet we are comfortable with a particular 'digit'! However, this is not to condemn GDP; rather I bring Bangladesh (who failed to reach the projected GDP growth expressed in national budget in last couple of times) in the middle of the fact to assess whether it is logical getting too concerned about the GDP growth only? Or is it indicative that failure in reaching desired GDP growth postpones our achievements in different sectors?
Let not be too tactical or theoretical here, rather use commonsense. The extent of wellbeing is ultimately explained through how the citizens perceive their status - in terms of their position amide national advancement compared to individual happiness. Data and digit often do not portray the true picture. If only 'digit' would bring happiness then the richest countries like Qatar, Kuwait would have been the happiest countries, in place of Panama, Vietnam or Belize!
Let's keep GDP (or GDP growth) aside and briefly focus on recent achievements of Bangladesh. Bangladesh has made laudable progress in attaining the goals ahead of the deadline (2015) in Millennium Development Goal (MDG) which is considered as the gauge of social improvement. In the conjunction of the latest 'promotion' to lower-middle income slab, incidence of poverty has been declining at a rate of 2.47 per cent (against the target 2.12 per cent) per year since 1991-92. Half of the people came out of poverty line by 2012; 3 years ahead of the target timeline. Though Dr. Abul Barakat, profound economist, contradicted saying that 83 per cent population of the country is now poor and not the 32 per cent as the government claims (October 9, 2011). However, in order to fortify the achievement, human resource development is also been taken care of. In our context, attending primary education is the first step and 98.7 per cent children have attended primary education which is far ahead than the neighbouring countries. And promisingly, girls' performance is better than that of boys in this regard. The Education Assistance Trust Act, 2012 has been passed to assist poor meritorious students. Most importantly, during the time frame 2011-15, Bangladesh would require US $ 78.2 billion to meet the target whereas Bangladesh received on an average only US $1.68 billion per year. Achievements have been attained through our own resource. Perhaps, that is why Amartya Sen, many a times, said Bangladesh 'the role model'.
At this point of time, to my understanding, (income) inequality should be placed at the top of the priority for sake of economic stability. GDP growth hardly addresses the economic capability to absorb any catastrophe. That is why, despite achieving high GDP growth at a consistent basis, India or China is thought to be very much susceptible to any potential economic downfall. With the invasion of economic downfall, people at subsistence level fail to survive that makes a severe impact on a country like Bangladesh where, arguably, more than one fourth of the entire population are still living under the poverty line. Concurrently, it will be fairly legitimate questioning the thought of poverty line that is in practice. Another vital point is divisional disparity of poverty: incidence of poverty in Dhaka division is projected to come down as low as around 5 per cent by 2021 (from 46 per cent in 2000) compared to 27 per cent in Barisal division by the same time (from 53 per cent in 2000).
In one hand we can be happy with the steady GDP growth but on the other hand rising inequality is also alarming. Kuznet's popularly known 'inverted U-curve' explains it. Nonetheless, we need to keep it in mind that economic theories failed to foresee most of the global (economic) catastrophes. Rather explained the reasons after the 'bullet is out'. And interestingly every time economic collapses appears in different format, making it even difficult to negotiate. Being a struggling economy like Bangladesh, we are yet to be placed on a platform from where we can fight against any potential downfall. Hence we should work proactively through policy level intervention that will ensure distribution of wealth in a uniform manner. All the achievements will be truly meaningful when mass people will 'inclusively' get the benefits.
Shamim Sahani John is a Visiting Faculty, Jahangirnagar University.
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