|A Call to the Middle|
|By Shamarukh Mohiuddin|
|Saturday, 28 April 2007|
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Bangladesh has come a remarkably long way from being perceived as the “basket case” that Henry Kissinger infamously termed it in the 1970s. Just this past decade we have seen stunning economic growth rates of around 5 percent—this in spite of the disruptions caused by continuous political instability.
The growing middle
Accompanied by this growth has been an expansion in the size of the middle class. What this means is that a larger portion of our national income is now captured by people in the middle of the income distribution. In addition, the middle class has now become less dependent on the government and state enterprises for jobs and income.
Bangladesh’s middle class accounts for about 10 percent of the country’s population, still low compared to Pakistan’s 18 percent and India’s 30 percent, but growing steadily. According to one report, the percentage of poor people in Bangladesh has dropped from over 60 percent in the 1980s to about 47 percent in 2000s. Data on the actual size of the Bangladeshi middle class is sparse, but there is plenty of evidence suggesting its growth.
A clinical analysis attributes the growth to greater dynamism in the services sector, stronger inflow of migrant remittances which incidentally dwarf foreign aid, and a move towards self-employment and entrepreneurship.
The visual transformation of Dhaka city over the last few years is telling in itself. During my visit to Dhaka last year, after almost a six year hiatus, I noticed how the city is replete with new restaurants, coffee shops, malls and new ways for the middle class to spend its cash.
Which way will the chicken bolt?
Five years ago, the opening of a brand new theme park, Fantasy Kingdom answered the prayers of urban kids with an urge to ride roller coasters and bumper cars. Anyone barely remembers “Shishu Park” where several of us have baby pictures. The opening of Fantasy Kingdom also occasioned debates about the need for a shiny new theme park when so many problems continue to plague Bangladesh, and so many children still beg on the streets.
Yes, inequality in Bangladesh remains quite stark and most people still earn less than the entry fee charged at the new theme park. But the growth of the middle class should be seen as a boon for Bangladesh, if it can be managed in the right way. This is if the government cuts red tape, allows greater investment in the economy, collects taxes and uses them to make some smart investments to lift the poor.
However, regardless of the exhaustive list of things that the government could be doing with the golden economic egg, the chicken has already hatched. The question is which way the chicken will bolt. The growing middle class has started to participate more frequently in civil society matters, and is in a stronger position to influence political and economic management. But it is not yet clear whether this increased influence will be used to make demands for better governance, fairness, and transparency, and for far-reaching institutional and legal reforms.
Some trends have been encouraging. There have already been greater demands by the middle class for stronger property rights, access to credit, and policies to improve the investment climate. These demands, if met by the government, could enhance the prosperity of the middle class and increase the size of its economic pie.
But it is worth asking whether the middle class will engage in affecting the kinds of changes that will help the many. As their living standards rise along with their appetite for more automobiles, homes and consumer durables, will these middle income folks also demand better checks on political power and more investment in public goods such as education, health and rural roads?
On top of it all, will the middle class play fair itself? Would it pay its taxes? Would it abandon inveterate rent-seeking practices that serve to shut out the many at the expense of a few, e.g., bribing law enforcement officials, school headmasters, healthcare institutions or company officials?
Will the proverbial rising tide lift all boats?
I should hope that it will. My hope also is that the middle class will branch out in other directions toward which middle classes in other successful societies, Chile or India for example, have gone. I hope it will start making louder demands for ethnic and religious minority rights, equal opportunities in the workplace, better stewardship of the environment, and other things that voiceless, poor people in poor countries don’t typically have the luxury to preoccupy themselves with.
We need the middle class not only to instigate meaningful and ambitious political reforms, to level the economic playing field for all Bangladeshis, but also to provide enlightened leadership in the management of future risks to Bangladesh. These could range from religious extremism to environmental destruction caused by global warming.
The growing Bangladeshi middle class can certainly rise to the occasion; it is my fervent hope that it will.