Inequality ‘threat’ to smooth performance of economy

Dhaka,  Monday,   2016-10-16
Published : 16 Oct 2016, 21:55:47

Inequality ‘threat’ to smooth performance of economy

Experts tell seminar
FE Report

Reducing inequality can go a long way in spurring economic growth and reducing conflicts in the South Asian region, experts said at a seminar in the capital on Sunday.

Inequality is a threat to smooth performance of trade and economy in the region and it is a major cause for increased incidence of terrorism, they told the seminar on "Reducing Inequality in South Asia: Critical Issues and Policy Choices".

"Inequality has a profound effect on the overall economic growth," said Dr Simrit Kaur, Professor of Public Policy of the University of Delhi in India.

"Research says that just one per cent reduction in inequality can boost economic growth by 0.483 per cent," she added.

The seminar was organised as part of the ninth South Asia Economic Summit.  

Dr Kaur in her speech stressed the need for adopting appropriate fiscal approach, enhancing social protection, ensuring quality education and better revenue mobilisation for addressing inequality.  

"It is notable that although poverty has reduced significantly in countries like India, Bangladesh and Sri Lanka, inequality has also increased in these countries at the same time," she said.

"Countries like Pakistan, Nepal and Maldives have done a good job in reducing inequality and poverty at the same time," she added.

Experts at the seminar observed that inequality is contributing to increased conflicts and terrorism in the region through increase in unemployment.

"Inequality is a danger and a threat to smooth performance of trade and economy," said M A Jabbar, Member of the Board of Governors of Sustainable Policy Institute of Pakistan.

"Inequality is also contributing to increased terrorist activities in the region through contributing to unemployment," he added.

Citing the example of his native country Pakistan, Mr Jabbar noted that there are great differences in the rate of poverty among its various provinces.

"While the incidence of poverty is higher in the provinces like Balochistan, the portion of people living below poverty line is far less in Punjab," he added.   

He also called for greater knowledge sharing among the intellectual societies and think tanks across the region over the issue of inequality.

Former Finance Minister M Syeduzzaman who chaired the session said SDG is now a global objective which is applicable to all countries.

"As such for reimagining South Asia, we have to consider some of the targets of the SDGs and their implications," he added. Syeduzzaman in his speech also identified ensuring of quality education and skills development as major prerequisites for reducing inequality.

Noting that the government has made the highest allocation in education sector in its latest annual budget, he said it is more important to ensure the quality than allocating greater amount of resources.

Director General of Bangladesh Institute of Development Studies K A S Morshed in his speech said that although economic growth in all regions is often initially accompanied by inequality, it takes time before that rate of inequality starts to decline.

He called for reducing the time the South Asian countries would require before the rate of inequality starts to decline.

Speakers at the session also said every country in the South Asian region can be turned into a regional hub for a specific industry if the average labour cost per hour can be properly utilised.
Editor : A.H.M Moazzem Hossain
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