A recent article in The Washington Post shed light on how billionaires in the US paid lower taxes than the entirety of the nation’s middle class – encouraging us to think about whether the path we are taking in the name of growth and development is fundamentally flawed.
As Bangladeshis, it begs us to inquire as to whether the nature of development being witnessed in the country requires a systematic overhaul.
Interestingly, this state architecture consists of an ever-increasing number of businessmen and powerful elites – a privileged group that has benefited most from the development in the country and that, for me as an observer, is worrying.
The nature of neoliberal capitalism has undoubtedly taken economies, including that of Bangladesh, towards a journey of nominal success.
But the numbers, when looked at more deeply, tell a different story – across 2019, the gross domestic product (GDP) growth rate of Bangladesh has hovered around 8 percent, making it the symbolic jewel of all the Asian economies.
Nevertheless, the widening disparity between the rich and poor, where commentators have accused the government of enhancing the scope for exclusive, rather than inclusive growth, has resulted in higher inequality levels across the country.
While economic trends suggest that Bangladesh is now the 31st largest economy in terms of purchasing power parity, and on its way to becoming the 23rd largest economy by 2050, the country has been unable to use its enhanced growth potential as a means to sustainably reduce the rich-poor gap among its citizens.
Levels of inequality between the rich and poor are the highest in the country’s independent history and are expected to go up, even while poverty levels are reducing, albeit at a slower rate than past decades.
The benefits of development are going to the most privileged and powerful in society, including large corporations having direct links to the government or those occupying cabinet portfolios and other senior state offices.
Therefore, it is safe to say that neoliberal capitalistic architectures work in creating a camouflaged version of what reality truly is – development in its truest sense is another tool for the privileged class to gain higher returns from their invested resources.
Now the government of Bangladesh is in no way non-intervening when it comes to the development and governance of its country. It has, to its credit, taken a number of initiatives to boost growth through state subsidisation measures – in areas ranging from digital technology to the accentuation of export processing zones. Yet, the government has intervened in arenas that they could have refrained from. Among these are the government’s legacy of being primary actors in the slow yet systematic curbing of media rights, the use of law enforcement agencies as a subsidiary branch of the ruling party, the failure to instill accountability and neutrality within the judicial system and the labelling of democracy standing in polar contrast to development.
In hindsight, if one is to think as to why development has not benefited the middle class to the extent it has for the privileged, it is in this very notion – the government has used resources and time to protect its own image, and those of the privileged, with an understanding that such will in return, protect the integrity of the development process. And therefore, we come back to square one – the government’s tenure represents nothing less than a classic neoliberal approach towards development and that is something which, for their very own legacy, they must address in the coming years.
One asks, how can they do so? Well the answer lies in the very Constitution signed into law by the nation’s Founding Father. Bangabandhu Sheikh Mujibur Rahman promoted the idea of an ideologically socialistic economy following the independence of Bangladesh.
A lot has changed in between, yet the root of development must be taken back to the notions of its understanding as construed by the likes of Sheikh Mujib and his economic advisers, including former PM Tajuddin Ahmed and academic Rehman Sobhan.
In June 2019, Professor Sobhan cited subsidies, tax exemptions and frequent loan rescheduling of defaulters as cases where the government’s inaction has resulted in the enhancing of the scope for the social disparity to flourish.
He also went on to suggest that he doubted whether the 500,000 people under the social safety net schemes received as much capital when compared with large corporations that have had a history of defaulting.
Professor Sobhan captures the root of the problem – the government has intervened in arenas which it ought not to while sidelining its constitutional responsibility of being the architects of a welfare state. That is the socialistic system promoted by the Bangladeshi Constitution – where the state wilfully creates regulatory architectures and schemes to allow the middle class to have precedence over the richest in society, with an intention of creating an inclusive economy. And this is the destination towards which the Awami League government needs to navigate if it wants its impressive growth levels to be sustainable.
We do not need to be economists to recognise how fragile Bangladesh’s banking sector is – neither do we need to ignore the fact that we have collectively created a system that works for a handful of people, rather than the entirety of society.
Otherwise, however much this nation develops and however many global brands operate in the country, it will be nothing more than window-dressing a problem that we are refraining from addressing.
Mir Aftabuddin Ahmed is a Graduate in Economics and International Relations from the University of Toronto. DHAKA TRIBUNE