‘Poverty originates in an unjust social order’

How do we attain a more equitable society on our path to development? As we are moving towards a middle income country, there are many challenges that we and all of South Asia faces, especially the income disparity. This level of inequality must be addressed in order to promote an inclusive development, according to renowned Economist Rehman Sobhan. During the discussion on his new book at Brac Centre Inn on Sunday, “Challenging Injustice in South Asia: A Work Programme for Promoting Inclusive Development” Rehman said that he had identified the core problem of injustice, which is: “The unjust nature of societies which created, reproduced and more importantly perpetuated inequalities and social disparities.

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Dr Salehuddin Ahmed, former governor of Bangladesh BankThe basic point of inequality arises because we have deviated from the original position of the social contract and this is why the inequality will grow and the structure cannot remove it. 30m people live below the poverty line, their earnings hovering at around 2000 dollars a year. The lack of policy continuity, for example - the income tax law that changes every year - creates an unpredictable situation. These sort of whimsical decisions by policymakers are not very helpful.    

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“I identified that poverty, originating in an unjust social order, creates and reproduces it. Traditional agendas recognizes these problems, but have not come up with any concrete ideas about what we can do about it. “Contemporary interventions suffer from this weakness. So you have this paradoxical situation of reductions in poverty but widening of inequality and disparity. The principal interventions therefore now need to refocus on the sources of the problem.”

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Dr Nazneen Ahmed, senior research fellow at BIDSThe civil society must bear the displeasure of the government. Many of the conclusions the civil society comes up with may not be liked by the government but they should have the strength to handle the displeasure of the government, which is often very difficult in Bangladesh. Whenever I am opposing the government in a very critical way, it is very difficult. If I am truthful about the findings, the nature of the displeasure and its outcome can be very intense and detrimental to my work. What can we do? We want this accountability of governments.  

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Rehman Sobhan’s book is based on a study conducted over four-years that was called “Challenging the Injustice of Poverty: Agendas for Inclusive Development in South Asia.” It was carried out at the Centre for Policy Dialogue (CPD) in Dhaka, based on research inputs from Bangladesh, India, Nepal, Pakistan and Sri Lanka. The study posits six areas in which inequality should be mitigated in order to reach a more just society. The six areas identified are: promoting agrarian reform, enhancing market power of the excluded through sharing in the value addition process, democratizing educational opportunities, establishing accountability and transparency for poverty eradication through budgetary policy, financial policies for poverty eradication and broadening ownership of assets through collective action.

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Dr Atiqur Rahman, the former lead strategist and policy coordinator of IFADThe development process is inherently fraught with injustice. I do not think any development process is egalitarian completely.  Any development process, at the beginning, inequality will have to increase because you need capital and since richer people have higher capacity to save and they have more investments, inequality is good for development. Until you come to a more mature stage and start redistributing that income. This a wisdom that was there for sometime, based on empirical evidence.    

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At the discussion program, six specialists were asked to speak on those six subjects in order to broaden the conversation and speak on the feasibility of Sobhan’s report. Dr Atiqur Rahman, the former lead strategist and policy coordinator of International Fund for Agricultural Development spoke on promoting agrarian reform, where he said: “Globalization has opened up economies. We have seen South Asian countries achieve high level growth. But there are concerns that globalization has not been able to deliver the benefits with concerns to inequality.

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Dr Manzoor Ahmed, professor emeritus, Brac UniversityThe education system, both the public and private system, is an instrument of creating inequality. The idea is that using the educational opportunity the people are changing their status. But our public and private system creates inequality. There are enclaves of elite schools within the public system with the public funding like cadet colleges, model schools, laboratory schools and so on which are run with public funding. This education system is creating and enforcing the inequalities that we have.    

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“Lingering concerns remain over food security, unemployment and poverty. Growth benefits have not been shared well.” Speaking as chief guest at the program, Economic Affairs Advisor to the Prime Minister Sheikh Hasina Dr Mashiur Rahman spoke about success and failure of land reform in South Asia. “There are more land owners who are more engaged in non-agricultural and service industries. They leave the land to the people and take and money and go. They have an effect on the long term productivity on land.

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Selim Raihan, professor at the department of Economics at Dhaka UniversitySome corrective measures to some economic and political institutions are necessary so that the market can perform better. Institutions are important, and taking corrective measures towards both economic and political institutions are also very important. But the fundamental point in addition to all these things – is that ownership is important. One mechanism of enhancing the market power of the excluded is by making them the owner of the whole process.    

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“Individual labours or workers are much weaker in bargaining wages with the corporate entities. You can have a share in these corporations and then you can also influence the amount of wages to be paid. Gonoshasthaya Kendra founder Zafrullah Chowdhury said none of the recommendations made by Rehman Sobhan would be implemented if there is no democracy and good governance in the country.

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Dr M M Akash, professor at the department of Economics at Dhaka UniversityInternational inequality is very important. If we only look into the national sphere then the first question will be - what is the present government doing? By 2030, this government aims to have a higher growth rate for the poor and lower growth rate for the rich. To increase labour income growth rate you need to increase the health and education capacity of the poor. If you want to increase the wealth income growth rate then you have to give access to property to the poor.    

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The other specialists were, Dr Nazneen Ahmed, senior research fellow at Bangladesh Institute of Development Studies who spoke on establishing accountability and transparency for poverty eradication through budgetary policy. Dr Salehuddin Ahmed, former governor of Bangladesh Bank spoke on financial policies for poverty eradication, Dr Manzoor Ahmed, professor emeritus, Brac University spoke on democratizing educational opportunities, Selim Raihan, professor at the department of Economics at Dhaka University spoke on enhancing market power of the excluded through sharing in the value addition process and Dr M M Akash spoke on broadening ownership of assets through collective action. In attendance among others were Association for Land Reform and Development (ALRD) chairperson Khushi Kabir, senior director for strategy, communications and empowerment of Brac Asif Saleh, CPB President Mujahidul Islam Selim.