Mukti

সাতকাহন

Seven trashes collected by the senses.

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A bad argument about inequality

Posted in democracy, development, economics, political economy, politics by jrahman on December 10, 2012

It’s a common refrain amongst Bangladeshis of a certain age and socioeconomic background that “four decades of independence / two decades of democracy and we’ve got nothing”.  When you point out that in terms of per capita income or life expectancy or most other measurable metric, things are much better in 2012 than they were in 1992 or 1972, the argument changes to “but we have fallen behind this, that or other country”.  Then you point out that, for example, despite being half as rich as India, Bangladesh does better on a range of socioeconomic metrics, showing we have not fallen as much behind as they fear.  When you do that, the last line of pessimism among these doomsayers is “ah, what about inequality'”.

Yes, inequality has risen in Bangladesh over the past decades.  Is this a bad thing?  Perhaps.  Perhaps not.  For example, when compared internationally, Bangladesh doesn’t apper so unequal.  When discussing the subject, we need to explore why we think inequality has risen, and how we think it is affecting the society.  There are strong grounds for possible concerns with rising inequality.  Unfortunately, Rezwana Abed and my friend Syeed Ahamed make a rather poor argument about inequality in their latest Forum piece.

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Inequality in Bangladesh

Posted in economics by jrahman on December 20, 2011

A common refrain in discussions about Bangladesh’s progress is ‘oh, rising per capita income is misleading, look at inequality’.  The implied message is, inequality has widened, and the benefit of economic development isn’t reaching everyone.

So I thought I should look at inequality seriously.  I looked up the World Bank World Development Indicator for Gini c0-efficient — the standard measure of inequality.  If the co-efficient is 0, then we have perfect equality, while 100 signifies complete inequality where one person has everything.  For more detailed explanation, see wiki.

So, what do you think has been the inequality trend in Bangladesh over the past quarter century?  Under which government has inequality been the worst?  How does Bangladesh compare with the feudal Pakistan or communist Vietnam?  The answers, over the fold, may surprise you.

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Imbalances in Bangladesh’s economy

Posted in economics by jrahman on February 16, 2011

In 2008, I used to say that Bangladesh faced a short-term economic challenge coming from the global recession, but beyond that things would get better under Awami League.  Turns out I was wrong on both counts — while the global recession barely affected us, AL has proved to be a major flop when it comes to economic reforms.   And this is evident in the ‘imbalances’ in the economy.

Imbalances are how macroeconomists describe developments in the economy that could lead to crises in the future.  In a fascinating article published in the Financial Express on 8 February, M Shahidul Islam of the National University of Singapore’s Institute of South Asian Studies describes how two major imbalances in Bangladesh’s economy are driving problems such as the high inflation or the bubble-and-burst cycle in the share market.  

As bad as these imbalances are, what’s most worrying is that I don’t see anyone in the PMO, Finance Ministry, Planning Commission or Bangladesh Bank who appreciate these issues. 

I strongly recommend everyone reading the article in full.  Over the fold, I summarise the author’s main points, and provide some commentary. 

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Is Vietnam a good model?

Posted in economics, politics, Rights by jrahman on October 8, 2010

This assessment of a Morgan Stanley fund manager has led to a bit of a chatter:

http://insider.thomsonreuters.com/RIVideoPlayer/link.html?ctype=groupchannel&chid=3&cid=108813&start=0&end=308&shareToken=MzoxMmY2ZWQ4MS1hMTQ1LTQwNzMtOGU2ZC1hYjE3MDZjMDFiZGU%3D

I don’t know how to embed the video — apologies.  Essentially, the interviewee is saying that Bangladesh is a better place for rich westerners to invest their money in than Vietnam.  After a bit of triumphalism, our pundits seem to be slightly at a loss — wasn’t Vietnam doing better than us, what’s going on here?

Vietnam has been a supposed role model for the Deshi left for as long as I can remember.  Didn’t they have a far more glorious liberation struggle than ours (which was hijacked by those Indians)?  Haven’t they been so much truer to their revolutionary spirits than us?  More recently, the right has also become enamoured with Vietnam — none of this flaffing about that democracy brings, those guys have stability, and stability is good for growth.  Meanwhile, the civil society types visit Hanoi and think ‘this is so much cleaner than Dhaka, traffic is so much better, inequality is less grotesque’.

Well, is Vietnam really a good model for Bangladesh?

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