OUR per capita income now stands, as the Bangladesh Bureau of Statistics says, at $2,784, or Tk 3,06144. Many of us think that the increase in per capita income means that the country has improved a lot or that the quality of life for people has changed a lot. The irony is that if the per capita income is high, it does not mean that the people of any country are very well off.
Let us say one person鈥檚 income is Tk 9,000. Another person鈥檚 income is Tk 1,000. This means the average per capita income of the two is Tk 5,000. It does not mean that both have equal income. So this is where the issue of income inequality comes in. The increase in national income is not development. Development is a much bigger and broader issue.
The per capita income of the country鈥檚 people was $2,749 in 2022鈥�23, $2,793 in the 2021鈥�22 financial year and $2,591 in the 2020鈥�21 financial year.听However, accurate national income calculation is not a very easy task. There can be many different types of errors such as the double-counting problem. A product may be counted twice in the calculation of national income.
For example, in the case of books and paper, if the values of books and paper are both counted in the national income, then the correct figure of national income will not be available because the price of the book includes the cost of the paper. In this case, once the costs of the paper as well as the book are calculated separately, the actual cost of the paper is calculated twice.
The per capita income of Bangladesh is $2,784. But how much economic change has happened in society, especially among low-income people, can be estimated only by looking at reality. The per capita income of the people of the country has increased over 21 times in 53 years of independence. It is estimated that by 2041, the per capita income of the people of Bangladesh will increase to more than $12,500. At that time, the poverty rate will decrease to zero, and the growth in gross domestic product will be 9.9 per cent. This goal has been fixed in the report entitled 鈥楤angladesh Second Perspective Plan 2021-2041鈥� to implement Vision 2041.
A country鈥檚 level of income inequality is measured by the Gini coefficient. A Gini coefficient value of zero indicates that there is extreme equality, and if its value is increasing to 0.5 or more, it means that the income inequality in the country has reached an extreme level. According to the report titled 鈥楬ousehold Income and Expenditure Survey 2022鈥� of the Bangladesh Bureau of Statistics, the income of the rich in the country has increased, ie, income inequality has increased.
For example, the richest 10 per cent of the country now has 41 per cent of the total income. On the other hand, the income of the poorest 10 per cent of people is only 1.31 per cent of the total income of the country. According to the latest survey, two-thirds of the country鈥檚 income goes to the richest 30 per cent of the country.
According to BBS data, in 2016 statistics, the poor population in the country was 24.3 per cent and the poorest population was 12.9 per cent. According to the report, the poor population is now 20.5 per cent in rural areas and 14.7 per cent in urban areas. According to the survey, the Gini coefficient of income in the country was 0.499 in 2022, compared to 0.482 in 2016 and 0.458 in 2010. In 1974, the Gini coefficient value in the country was 0.24. This suggests an increase in income inequality.听
Meanwhile, Bangladesh is at the top of the list of the top 10 countries in the world in terms of creating the ultra-rich. According to a report published in 2020 by a research institute named Wealth X Institute in the United States, from 2010 to 2019, the super-rich in Bangladesh increased at an annual rate of 14.3 per cent. Super rich here means those whose total wealth is at least $30 million, or Tk 250 crore.
Various statistics have proved that Bangladesh is a country with high income inequality, and due to this income inequality, poor families are left behind from the opportunity to improve the quality of life, including quality education and health care. So, while the increase in average per capita income is promising, the simultaneous increase in income inequality is equally disappointing news.
A study published by the Bangladesh Institute of Development Research in May 2023 said that the income of both the rich and the poor has increased in Bangladesh in the past four years, but the lower middle class has seen the lowest rate of income growth. However, living costs have increased for all and income inequality has also increased. In the BIDS study, the same households surveyed in 2019 were again surveyed in 2022. Those who were described as wealthy in the institute鈥檚 2019 survey had an annual income of Tk 8,54,146 鈥� Tk 71,000 a month. However, in 2022, their annual income increased to more than Tk 14 lakh. On the other hand, those who are 鈥榣ower middle class鈥� whose annual income in 2019 was Tk 4,02,000, in 2022, their income is now Tk 4,38,000. According to the BIDS, the rich have become richer and the income gap between them and the poor and middle class has widened.
Bangladesh has made great progress in the last few years. It has surpassed many countries in terms of growth. But this growth did not benefit a larger segment of the population. The calculation of per capita income is always in disorder. Many have built mountains of money through corruption. Their average wealth is calculated to be high. Hawkers, rickshaw pullers, garment workers, and the unemployed are all shown as middle class. And the scene of swelling from the middle is covered.
Remarkably, politicians in developing countries are as enthusiastic and vociferous about GDP growth when success comes, but their concern over rising inequality is not observed. Growth in agricultural production is surely considered while calculating GDP. But it is not taken into account that the farmer is deprived of a fair price.
The news of rising per capita income is undoubtedly good news. But the government should also focus on the issue of income inequality. Our aim should be balanced social development and a balanced distribution of resources. It is everyone鈥檚 hope that Bangladesh will become a social welfare state through economic self-reliance, along with the employment of unemployed people, and that the disparity between the rich and the poor will be reduced.
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听Md Zillur Rahaman is a banker听and columnist.
