The income inequality between the rich and poor widens at times when a country experiences a high growth rate for several years, says Dr Shamsul Alam, member (Senior Secretary) of General Economics Division (GED) Planning Commission and agricultural economist, during an interview with Dhaka Tribune’s Asif Showkat Kallol
What is the reason behind higher rate of implementation of development projects compared to the last fiscal year?
The Planning Division has stepped up its game facing the challenge of increasing the rate of implemented projects.
Besides, the authorities also designed a new system to monitor and supervise the development projects which helped the implementation rate to go up.
The Planning Division put full effort in attaining more than 7% growth rate in the development projects. At the same time, weather was better than the last several months, which helped us lift the implementation rate.
According to a statistic of Implementation Monitoring and Evaluation Division, the first quarter of FY17-18 has performed better than the last fiscal year because of foreign aids.
The ministries and divisions spent Tk16,755 crore between July and September, which is 10.21% of the total outlay of the annual development programme. In the last fiscal year, a total of Tk10,789 crore were spent, which was 8.75% of the total allocation.
Why is the rate of implemented foreign aid projects also higher?
A total of Tk7,772 crore was spent in the foreign aid development sector in the first quarter of the fiscal year, which is almost double of the last fiscal year. Foreign aid utilisation is 12.86% currently, in contrast to last year’s 8.19%.
The implementation of foreign aid related projects are difficult due to harsh conditions set by the fund providers. Sometimes, their conditions include accountability of good governance of development agencies, which makes our task even more difficult.
What is the reason behind higher rate of Annual Development Programme implementation compared to the last several years?
The overall performance is better because we put our maximum effort in the implementation of development projects under the Annual Development Programme.
What about the implementation of big projects like Padma Bridge?
The much-talked Padma Bridge is now visible. The second span of the bridge is now being installed after overcoming all the controversies surrounding the World Bank allegations. The two spans are placed on the pillar 37 and 38 at the Zajira point in Shariatpur.
The first span of Padma Bridge was installed on September 30.
Another big construction work – the largest ever coal-fired power plant in Cox’s Bazar’s Matarbari – is also under construction. Bangladesh’s first deep-sea port construction work is also progressing with the funding of Japan International Cooperation Agency.
Why do we need deep sea ports?
The two main sea ports of Bangladesh – Chittagong and Mongla – are surrounded by shallow water which forces the vessels to wait in the sea for hours depending on high and low tides in the berth. Due to this problem, large ships transfer their loads to smaller vessels. This lengthened process costs an extra $15,000 per day.
According to Krispen Atkinson, principal analyst for the IHS Maritime’s Research & Analysis team, the 18-metre (59 feet) deep Matarbari port will be deep enough to allow the largest container vessels to dock at the port.
Is income inequality escalating amid high growth rate?
Yes, we have high GDP growth rate in comparison to global standards. The income inequality between the rich and poor widens to some extent when a country has high growth rate for several years. The governments across the world have tried to reduce wealth inequality when their growth rates are high. For Bangladesh, income inequality has increased amid high growth rate as well.
According to the Household Income and Expenditures Survey 2016, income inequality in Bangladesh has widened further despite a decline in the rate of poverty. The poverty rate has dropped to 24.3 % last year from 31.5 % six years back. The Gini coefficient, that measures income inequality within a country’s population, has increased to 0.483 from 0.458 within the same timeframe.
What should the government do to ease income inequity across the country?
We have tried to strengthen the social safety net programmes in the rural areas. We have invested more in the rural areas in terms of bringing electricity and communication network to ease inequity across the country. The Local Government and Engineering Division is spending more money to widen the rural roads.
We have tried to establish more growth centres across rural Bangladesh. Those growth centres will reduce the income inequality between the poor and the rich.
Does less consumption of rice have anything to do with the development?
People consuming less rice is a symptom of their improved living standard. The people are now eating more vegetables and fruits. The higher income at the household level has resulted in more consumption of meat and eggs, instead of rice.
The 2016 HIES shows that rice consumption has dropped by 11% in five years as rising income helped people diversify their diets.
The survey also shows that people reduced their consumption of wheat since 2010. Daily per capita consumption of the grain dropped 24% to 19.83gm in 2016 from 26gm in 2010.Overall, daily intake of rice and wheat by an individual fell by 21% and 41% since 1995.