Rich-poor gap increases in Bangladesh

[VCheng]

So? Govt can (effectively) print 100 times the money and say its grown a 100 times. Or a 1000 times or a million times why not...Zimbabwe is a great recent success story in this strategy.

I'm talking about REAL consumption. Don't care if the 2 apples I bought yesterday were worth 10 taka....and now I have 30 taka but can only buy one apple with it. I care about the apples, not the Taka. I can't eat Taka now can I?



Again, I'm talking about how much GDP (and essentially everything BD measures) is even real in the first place....not what gets laundered to inflate it so more money can be borrowed externally because the credit rating is absolute crap.

Not one, NOT ONE Asian developing country has seen real household incomes decrease in their so-called growth trajectory phase (especially this early). Increase slower than one would think, sure...but decrease? Thats a terrible thing that should be raising all kinds of red flags...but amazingly it isn't.

Things need to be remedied - either the stats measurement is waaay off and BBS needs a big ole overhaul completely or something is terribly going wrong...or both.... what you cannot have is neither.

But what they ended up doing is suppress it (in the very report i.e HIES that was supposed to include such an important thing) thinking no one would notice (which is laughable given CPI indexing is literally the most playschool thing any BBS economist would have done right off the bat when given a nominal amount...so something is definitely going on).

But this guy caught onto it (I wish many more of him existed in BD, they could use these good, intelligent and truly concerned people):

https://opinion.bdnews24.com/2017/12/18/where-did-the-benefits-of-economic-growth-disappear/

And I yet have to hear even one basic counter analysis or explanation given by the BD govt or anyone else (BBS would be another relevant voice) as to why this was kept out of the report (or if there is some other valid reason), and what the hell is going on (like yesterday) to address this. Instead we don't even know which problem it is (A, B or A+B)....just avoid mentioning it, dump some passage of time on it, salt and pepper with some "election" stuff and more circus media charade and the problem becomes a null set apparently.

Then a bunch of you rush headlong to gloat about BD economic stuff to Pakistani members (whether they deserve it or initiated it or not is secondary thing). Give me a break.

@bluesky @Joe Shearer @GeraltofRivia @Tanveer666 @VCheng @scorpionx

If South Asia as a whole spent half the effort in actually making things better compared to that put into pretending things are better, the whole region would take off like an economic rocket.

 

[SBUS-CXK]

Rich poor gap is widening everywhere, especially the neighboring country.

https://www.business-standard.com/a...bottom-half-s-by-only-110-117121500440_1.html

In a growing third world economy, this is inevitable.

The income of the poor will not keep pace and will always play catch up. Because our South Asian economies are built on low-wage industries and that is what makes us attractive in the world as a labor source.

China is a different case as it was a centrally-planned, highly-disciplined economy. The 'iron bowl' was more or less assured.

@Two your comments please...

Most countries have rich poor gap and economic inequality. but the government handles it differently.

Premier Zhu Rongji began the "Western Development".
President Hu Jintao began the "Regional Economic Balance"

https://en.wikipedia.org/wiki/China_Western_Development

Planned economy is only a way of development, it is not entirely correct. but the government needs to know what it should do. It should have clear goals and plans.

 

[Nilgiri]

Let's wait a couple of years then.

Sure!

 

[Nilgiri]

your saying that the household income decrease is something inevitable, why? shouldn't it be something to avoid.

Wait so you're saying households (the fundamental family unit) shouldn't have their consumption increase and to avoid?

I am saying household income increase ought to be inevitable in the time frame being talked about here. It gives a good measure of whats getting down to the base given its median is somewhat more useful (to check up on the base of the pyramid etc) than GDP per capita medians etc given we mostly operate as households rather than individuals (esp in south asia).

If there is household income decrease at real level, that is a fundamental concern.

There is real consumption as well which is real (income - savings) in the bottom table, if that is your concern:

https://opinion.bdnews24.com/2017/12/18/where-did-the-benefits-of-economic-growth-disappear/

Household Income basically is same as GDP for a household. The total a household draws in. Just the sampling unit is a larger one size wise than census population....so it gives a different nuanced picture than just dividing total production by total population.

 

[GeraltofRivia]

Wait so you're saying households (the fundamental family unit) shouldn't have their consumption increase and to avoid?

I am saying household income increase ought to be inevitable in the time frame being talked about here. It gives a good measure of whats getting down to the base given its median is somewhat more useful (to check up on the base of the pyramid etc) than GDP per capita medians etc given we mostly operate as households rather than individuals (esp in south asia).

If there is household income decrease at real level, that is a fundamental concern.

There is real consumption as well which is real (income - savings) in the bottom table, if that is your concern:

https://opinion.bdnews24.com/2017/12/18/where-did-the-benefits-of-economic-growth-disappear/

Household Income basically is same as GDP for a household. The total a household draws in. Just the sampling unit is a larger one size wise than census population....so it gives a different nuanced picture than just dividing total production by total population.

This is indeed an unusual development. It is hard to tell the driver without accessing a board set of data e.g. examine the median of the distribution as you mentioned. I am guessing the possible explanations could be one or a mixture of:
1. The benefit of the growth has been heavily skewed to the private and public sectors and the household sector actually sees a reduction in income after inflation is taken into account.
2. within household section, the income distribution is simply being stretched in the top end, also reflected in a heightened GINI index.
Again it could be a lag effect in a rapid growing economy that the supply situation of the labor market has temporarily delayed the wage growth. Or maybe the problem is more in the inflation space, where 6-7% per annum can basically undo any meaningful wage growth.

 

[Nilgiri]

This is indeed an unusual development. It is hard to tell the driver without accessing a board set of data e.g. examine the median of the distribution as you mentioned. I am guessing the possible explanations could be one or a mixture of:
1. The benefit of the growth has been heavily skewed to the private and public sectors and the household sector actually sees a reduction in income after inflation is taken into account.
2. within household section, the income distribution is simply being stretched in the top end, also reflected in a heightened GINI index.
Again it could be a lag effect in a rapid growing economy that the supply situation of the labor market has temporarily delayed the wage growth. Or maybe the problem is more in the inflation space, where 6-7% per annum can basically undo any meaningful wage growth.

Yes this is what I have also discerned in other threads previously. Either that and/or the CPI back then (composition weight-age etc) was different to the CPI now so cannot be simply indexed across the time frame in apples to apples way for application to final net products/incomes etc.

I have simply not looked into BD CPI data history (I looked more into Industrial Production index for India...and that turned into a headache eventually given all kinds of weightages were out of date/questionable... and I gave up and just add caveat when someone thinks its be all end all etc). Lot of these indexes are somewhat a labour of love for anyone from the outside trying to get into the fun parts of the interior.

But that said....this can be easily back-casted/accounted for if so by the BBS itself to address that part of it in a revised edition/statement. But that has not happened which concerns me. In fact they could make a household price index, different from CPI, WPI etc if this is some lingering issue...though honestly CPI should just be good/robust enough to apply to households if you ask me....given households are basically end-chain consumers.

It took one article to show this up (i.e faulty data process or faulty economic structure or both)...and there has not been much follow up if any (past from what we talk on this forum).

In India (as non-optimal as it also is broadly on such issues) I am pretty certain that a similar thing would have generated like 100 articles at least (as much as India-STRONK kind of ppl and members here hate that kind of thing, I welcome it broadly) and there would have been a follow up/persistence till it gets addressed by the relevant authorities (given it concerns the total net state of the masses). This is what BD needs in the end....it cannot be just one or two voices....and then the key issue just submerges and is forgotten about....especially if Bangladeshi members here then want to use their (broader) macroeconomic/socioeconomic data as some big club to try use on others. There needs to be some level of underlying accountability and credibility inherent in the larger framework of society.

 

[GeraltofRivia]

Yes this is what I have also discerned in other threads previously. Either that and/or the CPI back then (composition weight-age etc) was different to the CPI now so cannot be simply indexed across the time frame in apples to apples way for application to final net products/incomes etc.

I have simply not looked into BD CPI data history (I looked more into Industrial Production index for India...and that turned into a headache eventually given all kinds of weightages were out of date/questionable... and I gave up and just add caveat when someone thinks its be all end all etc). Lot of these indexes are somewhat a labour of love for anyone from the outside trying to get into the fun parts of the interior.

But that said....this can be easily back-casted/accounted for if so by the BBS itself to address that part of it in a revised edition/statement. But that has not happened which concerns me. In fact they could make a household price index, different from CPI, WPI etc if this is some lingering issue...though honestly CPI should just be good/robust enough to apply to households if you ask me....given households are basically end-chain consumers.

It took one article to show this up (i.e faulty data process or faulty economic structure or both)...and there has not been much follow up if any (past from what we talk on this forum).

In India (as non-optimal as it also is broadly on such issues) I am pretty certain that a similar thing would have generated like 100 articles at least (as much as India-STRONK kind of ppl and members here hate that kind of thing, I welcome it broadly) and there would have been a follow up/persistence till it gets addressed by the relevant authorities (given it concerns the total net state of the masses). This is what BD needs in the end....it cannot be just one or two voices....and then the key issue just submerges and is forgotten about....especially if Bangladeshi members here then want to use their (broader) macroeconomic/socioeconomic data as some big club to try use on others. There needs to be some level of underlying accountability and credibility inherent in the larger framework of society.

Well back casting may also generate some other side effect particularly when it produces significant impact to well important things. Have seen it all the time that certain forecast/process are left running in a suboptimal way simply for the sack of keeping the things consistent over time. People or organizations that are brave enough to improve them needs to prepare themselves mentally and intelligently. Maybe it is just a testament that what they are touching does matter, which is a very good thing.