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SYDNEY, Dec 16 (IPS) - This piece is not about the crisis or the chaos that the country is now facing after successfully toppling the autocratic regime of Sheikh Hasina. Rather, it is about the crisis of confidence and social capital or trust — interlinked, nonetheless.
Anis ChowdhuryThe thread that binds a nation together is trust or social capital. There could be many factors that contribute to social capital, but one that stands out is equity or fairness. Social capital or trust is low in a country where income and wealth gaps are high, and the general people feel unfairly treated or deprived.The fallen autocratic regime prided itself on rapid economic growth, averaging approximately 6 per cent a year. However, the regime’s kleptocratic system of ruling by plunder and favour to its cronies has contributed to accelerated wealth and income gaps as well as relative deprivation; thus, it has caused fissures in the social fabric. Rising relative deprivation
Income and wealth gaps have yawned wide, turning a reasonably equitable society at the time of independence into one of the most unequal societies. The Gini coefficient, a common measure of income inequality, has increased from 0.36 in 1973 to 0.499 in 2022, according to the latest (2022) Household Income and Expenditure Survey (HIES) of the Bangladesh Bureau of Statistics.
The Gini coefficient was 0.39 in 1990–1991, marginally above the 1973 value (0.36), accelerating to 0.46 in 2010. Income inequality in Bangladesh has deepened since 2016. The 2022 survey reveals that about 30 per cent of the income generated in the country is concentrated within the top 5 per cent of household. This proportion was 27.82 per cent in the 2016 Household Income and Expenditure Survey.
Furthermore, the top 10 per cent of the wealthiest households in Bangladesh hold about 41 per cent of total income. This proportion was about 38 per cent in 2016. Concurrently, the income share for the bottom 50 per cent of households decreased to about 19 per cent in 2022 from 20.23 per cent in 2016.
Disturbingly, there has been a secular transfer of income from the lowest quintile of the households to the highest quintile. The average annual loss of the bottom 1st quintile’s share in the national income has been -0.71 per cent as opposed to the average annual gain of 0.46 per cent for the highest (top) quintile during 1973–2010. The middle-class also lost; income shares of 2nd, 3rd and 4th quintiles declined since 1973.
This does not augur well for our democracy. Nor can we celebrate this development in a country where one of the founding principles is socialism. Suppression of democracy driving growing disparities
PROFESSOR MG Quibria of Morgan State University and ADB’s former Senior Advisor pointed out, ‘possession of political capital opens up myriad economic opportunities, including preferential access to finance and business, restructuring and loan default options, lucrative employment, access to privileged information, tax evasion or even outright corruption’.
The link between corruption and economic growth could be debated, but it is a method of plunder and primitive capital accumulation by the lumpen bourgeoisie that exacerbates inequality of wealth.
An environment conducive to unchecked corruption emerges when democracy is suppressed and the institutions that ensure accountability, transparency and the separation of powers between various branches of the government are weakened. Where democratic institutions are weak, political capital is a powerful instrument for advancing one’s economic and social position.
Unfortunately, suppression of democracy in Bangladesh began as soon as it emerged as an independent nation with the rigging of its first parliamentary elections in 1973. It is ironic that a country, where democracy is one of its founding principles, turned into a one-party state in 1975 within four years of its independence, shutting down most of the news media and allowing only state-run ones.
Sadly, instead of trust — built through accountability and transparency — election manipulations became the norm for all political parties to gain power and then retain it. Therefore, each successive government became more repressive, more lacking in accountability and more vigorous in election rigging.
However, such regimes suffer from legitimacy deficits — both legal and moral; they can only survive by allowing corruption and distributing favour. Thus, a vicious circle develops — a regime that resorts to more election manipulations becomes more beholden to its cronies, allowing them to plunder the state.
Undoubtedly, this process reached its zenith during Sheikh Hasina’s rule. Unchecked corruption, tax evasions and financial crimes such as defrauding bank loans enabled Bangladesh to become the global leader in wealth growth during 2010–2019. New York-based research firm Wealth-X, reported a remarkable 14.3 per cent annual increase in the number of individuals with a net worth exceeding $5 million, surpassing Vietnam, which ranked second with a 13.2 per cent growth rate. Neoliberalism and the demise of democracy
BANGLADESH is not alone in witnessing widening income and wealth gaps and consequently democratic backslides. This is a global phenomenon coincided with the embrace of the neoliberal economic philosophy of privatisation, liberalisation, deregulation and globalisation dictated by the interests of the corporate power.
In the process of multinational corporations-driven globalisation, the civil society simply became apolitical NGOs, happy to receive crumbs from the donors to engage in so-called development activities. Citizens became ‘stake-holders’ together with the large corporations and donors, instead of ‘right-holders’.
Bereft of rights and no longer an end itself of development, citizens are now ‘human resources’, an epitaph cleverly designed to hide that they are simply fodder for the profit machines of corporations. In a deregulated economy, workers are dehumanised, constrained to socialise and participate in political activities.
Should one be surprised in the falling share of wages in the national income, stagnating or falling real wages and tragedies like the ‘Rana Plaza incident’?
Under the corporate globalisation, schools and universities — both public and private — are no longer places of learning where youths are transformed into enlightened citizens and agents of change, and where visionary future social-political leaders are produced. They are simply factories for mass-producing so-called ‘job-ready’ certificate or diploma holders, apathetic to social, economic and political issues.
An additional boost to accelerating inequality in Bangladesh comes from a three-stream education system (Bengali-medium national curriculum, traditional religious curriculum and English-medium overseas curriculum). It perpetuates inter-generational inequality. Which way out?
ONE can get some cue in AK Sen’s observation that ‘a country becomes fit through democracy,’ and democracy versus development is a false dichotomy. Sen defines development as freedom — freedom from hunger and poverty; freedom from fear and persecution; and freedom to express, associate and participate. In sum, freedom to enhance one’s capabilities to attain one’s full potential as a human being.
Sen insists that political and civil rights are ends in themselves. Their denial cannot be acceptable even if it promotes economic growth and some well-being as such a development path is not sustainable. Suppression of political and civil rights results in growing income and wealth inequalities, where obnoxious, luxurious living by the few coexists with a large populous struggling to survive. This fuels a sense of relative deprivation contributing to violent social conflict.
Therefore, the first step is strengthening democratic institutions or consolidation of democracy. This requires the depoliticisation of administration and civic associations.
There exists a large volume of research findings showing that the politicisation of administration and the organisation of civic associations along party lines not only boost corruption but also accelerate social cleavage.
Civic associations where members hold different political views help build trust among political parties. They can agree on critical national issues while still disagreeing on details.
A depoliticised public administration serves a wider citizenry. In the process, the government, even though led by the winning party, governs for all and becomes inclusive, thus strengthening the trust between the state and the governed.
As for the political parties, they need to practise democracy themselves. That is, all party posts should be open for contest and there should be transparent rules for elections. As the primary organisational vehicles of electoral democracy, political parties are themselves judged in terms of their democratic character.
The most engaging models of internal party democracy are inclusive, participatory, deliberative and accountable and include fair distribution of power. It involves non-discriminatory open memberships and the inclusion of all party members in decision-making processes, leadership selection, policy formulation, as well as ensuring accountability of party leadership to its members. In short, internal rules of political parties should be guided by inclusiveness, clarity, transparency, accountability and independence. Their interaction with society should be based on dialogue, interdependence and cooperation.
In the economic arena, there is an urgency for reorienting to pursue strategies for growth with equity. This is an imperative if Bangladesh is serious about its state principle of socialism. The state has to recapture its lost leverage over the corporate sector to protect the interest of the wider community and to ensure decent jobs and a fair living wage.
It has to give priority to citizens’ well-being over balancing the budget and be bold enough to use its fiscal power to redistribute the growing wealth by using progressive taxation and widening public provisions of basic services, such as healthcare, education, housing and universal social protection. There is ample evidence of a close negative association between the tax-GDP ratio and inequality as well as between public social expenditure and inequality, clearly indicating the redistributive role of the government.
State actions are needed to smoothen the rough edges of the market forces that manifest in exclusion and inequality, which are found to fuel social and political unrest harming growth in the long run. Equity of access, opportunities and outcomes are fundamental aspects of socialism. They enhance both economic and political freedom, essential for rights-based development that empowers citizens and expands their capabilities.
Weakened democratic institutions and rising inequality create a vicious circle that leads to diminished trust — among citizens and between the state and citizens — which chips away social capital, the glue that binds society.
Bangladesh has to find the solution to its woes in its founding principles — a democratic polity and a socialist economic construct. Both are critical in rebuilding trust and social capital, needed to overcome the current national crisis. Anis Chowdhury is emeritus professor, Western Sydney University, Australia. He held senior United Nations positions (economic and Social affairs) in New York and Bangkok.
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