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Dhaka Tribune

OP-ED: When will we yearn for a social welfare state?

Creating the foundation of an effective social welfare state looks like a distant dream

Update : 09 Jun 2021, 12:06 AM

Every year, the national budget invokes a lot of technical and policy analysis - and most of them fall within two broad themes. 

The first theme is predominantly dictated by the technical hawks. 

Those who sit down with their forecasting mirrors to evaluate if the various targets – revenue, expenditure, borrowing, interest payments, etc. - laid out in details in the budget are internally consistent or not – and whether they look feasible within the prevailing general macroeconomic environment. 

This is not a futile endeavor as it is critical for the citizens to know if the state is making a credible fiscal commitment - and not offering them a red suitcase full of empty promises.

The second theme is different – perhaps a yard more normative in nature. 

As its composition exhibits diverse economic opinions concerning if the budget prioritized issues that matter. 

In the case of the present budget, some argued that the budget did not commit enough to healthcare. 

For others, it was too business friendly and it will not help those constituencies who have been pushed into poverty by the ongoing pandemic.

While some felt that the fiscal incentives offered in the budget are good enough for rejuvenating the animal spirit in the economy, which will culminate into more growth and employment. 

A consensus in this debating platform will never be reached, because, for the lack of a better phrase, attaining consensus is not an economists’ forte.  

In this opinion piece, I want to move beyond these standard examinations of the national budget and pose a different thought experiment. 

What is the socioeconomic desirable end point to which we want Bangladesh to gravitate to in our own lifetime? 

In other words, what do we think is both possible and desirable within the realm of possibilities over the foreseeable future? 

To make this question even more personal – lets us ask - what kind of rights and socioeconomic opportunities do we think our children and grandchildren deserve if they chose to live in Bangladesh?  

John Maynard Keynes – one of the most gifted and thought-provoking economists of the 20th century – did write an essay concerning a similar issue –Economic Possibilities for Our Grandchildren – where he postulated that economic abundance is possible and societies can contain the perils of acute poverty and chronic unemployment if states chose to act. 

Yet, we have seen that economic abundance on its own does not matter if the wheels of capitalism reduce our existence to its next best use without institutions instilling and sustaining economic and social security in our lives. 

Especially, we have seen from the West that the unintended consequence of economic disenfranchisement born out of neo-liberal policies that dismantledsocial entitlements can concentrate wealth to a point that it no longer allows democratic institutions to breath. 

Where access to decent health is no longer considered a fundamental human right. Where student loans push young minds into obscurity. Where old age becomes a troublesome lonely passage– and childcare not seen as an investment in the future, but an obstacle to the economic race.  

Looking to the west

As a nation that wants to create its mark at the world stage, it is essential that we learn from the West - not just what it got right, but also what it got wrong. 

The only safeguard against this grim future is that we remind ourselves what is important and what future is worth committing to. 

And fortunately, history does hold some useful sign posts – as it has shown that when nation-states did commit to social welfare, one could broadly tailor economic policies to ideals of social justice – even within a capitalist framework. 

Ideas such as “equal opportunities for all” were born and social welfare states were structured within nations that once championed slavery and colonial exploitation. 

Of course, if such a social conscience championing competition, innovation and social justice receive unshaken commitment from our students, intelligentsia and political elites, the national budgets will not require fundamental economic punditry every year. 

We would know what the basic architecture of the national budget and social policy ought to look like.

As it presently stands, creating the foundation of an effective social welfare state looks like a distant dream.  

Our tax to GDP ratio has hovered around 8% of GDP for nearly a decade. 

This pales in front of what a welfare states demands – a tax receipt of at least 30% of GDP. 

There is still a strong colonial hangover when it comes to how we talk about tax obligations - where one’s tax commitmentsare seen from the lens of a punitive measure – an unjustified resource extraction from a dubious self-serving state. 

But when will this attitude change? When will we see our tax obligation as a contribution to nation building? 

This, perhaps, largely depends on the qualitative nature of our social contract. But the present self-defeating social contract can change. 

If persuasive public discourse is targeted not at what we can achieve by tweaking at the margin, but by bringing a paradigm change in the very nature of the state – then a collective yearning for a welfare state might become louder. 

What matters at the end is not what we think is feasible, but what we should ought to aspire. 

An economic space which commits to both growth and social justice might not be an easy end point to get to – but that does not make it any less fundamental.


Ashikur Rahman is a senior economist at the Policy Research Institute of Bangladesh (PRI), and member secretary at the Bangladesh Economists' Forum (BEF). He can be reached at [email protected] 

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