The top 10% of the population control 58.5% of the total wealth in Bangladesh, while the bottom 50% hold only 4.8%, said Dr Rumana Haque, a member of the task force on “Re-strategising the Economy and Mobilising Resources for Equitable and Sustainable Development” on Tuesday.
“The income inequality in the country has increased even further as the wealthy are earning even more,” she said at a session on the second day of an event on recommendations by the Taskforce on Re-strategizing the Economy organized by the Centre for Policy Dialogue (CPD) in Dhaka.
During a session on social inequality and poverty alleviation, Rumana said poor-quality education in rural areas limits upward mobility while VAT disproportionately burdens lower-income groups.
“While industrialization, infrastructure investment, and foreign direct investment [FDI] have primarily benefited urban areas, 85% of the workforce remains in low-wage, unprotected jobs,” she added.
Sharmeen S Murshid, adviser to the Ministry of Social Welfare, said the financial support provided so far has been insignificant.
“It is not enough for poverty alleviation. Should we increase the Tk700 allowance to Tk1,500, or should we expand policy coverage? We are working towards empowering people,” she added.
BB governor: Won’t be able to save all the banks
Bangladesh Bank Governor Dr Ahsan H Mansur said Islami Bank and United Commercial Bank- the weak banks are starting to recover.
However, the banks with a high non-performing loan (NPL) ratio cannot be saved even after trying.
"We are trying to keep the banks alive by implementing good governance. We may not be able to do it all. Not all banks will survive. The chances of certain banks surviving are very slim. Because 87% of the deposits of some banks have been given to a family. The banking sector has been systematically looted,” he said during a session of macroeconomic policy and governance in the banking sector.
He said the good news is that Islamic banks and UCB seem likely to emerge from such a situation because they are not seeking new financial support.
Regarding the new banking act, Mansur said: “The Bank Resolution Act is being enacted, and we are closely monitoring the public and private banks.”
“The Bank Resolution Act and the Deposit Insurance Guarantee Act will be implemented together. Arrangements have been made so that those with savings below Tk2 lakh get the full amount,” he added.
CPD Executive Director Dr Fahmida Khatun, who is also a member of the task force, said: “Our financial sector is bank-dominated. As a result, if there is a failure in the banking sector, the weakness of the entire sector is revealed.”
Regarding non-performing loans, she said NPL was Tk2,84,977 crore by September 2024.
“If everything is added up, the amount will be much much higher,” she added.
Mentioning that more than 40% of this is from state-owned banks, Fahmida said: “We have recently seen an increase in the amount of NPLs in private banks as well. Their NPL ratio is currently 12%.”
She noted that the amount of non-performing loans exceeds the combined budgets of the health and education sectors. This shortage of funds limits spending on health and education, while also contributing to an increase in bad loans.
Attending as a guest of honour, National Bank Chairman and ex-FBCCI president Abdul Awal Mintoo said: “After reading a bit of the Task Force report, it seemed that economists have completely separated politics from economics. There is only economics here. There is no such thing as politics. I found this surprising.”
"Economists give theories, but we do the work. The difference between the two has never been bridged and will never be bridged,” he added.
