In Pakistan regime, we fought against much talked about 22 families in our long democratic movements. They were millionaires and excoriated for amassing wealth depriving the rest of the people of Pakistan. It had been seen as a wide disparity raging our economic and social fabrics to an alarming state.
It comes as a shock then, to learn that in Bangladesh we have 50,000 multi-millionaires and that estimate was given by Bangladesh Bank in 2014. In 2012 it was 23,212 and now? Albeit it has outpaced the past. Yes Finance Minister himself has conceded that there are more than 114,000 account holders with more than 1 crore taka deposited in their respective accounts. It appears a fragment of population are appropriating lion’s share of the cake of economic growth and leaving only small portion for the majority.
That goes against the spirit of our liberation. Ensuring equality in the delivery of all opportunities was our commitment. So higher growth with rising inequality concerns us. But it has turned to a serious pass instead of declining at present. Bangladesh is seeing a speedy growth of inequality that is, a speedy rise of the rich surpassing other countries in Asia and indeed the world. So it is said in the World Ultra Wealth Report 2018. Most Bangladeshi newspapers carried the report prominently when it came out earlier this month. Fastest growth of ultra- rich in Bangladesh, posting 17.3 pc growth of the super wealthy in six years. Report said Bangladesh was home to the fastest-growing ultra- wealthy population over the past five years, accumulating at a faster rate than even China or the US or anywhere else. It was published by WEALTH—X. T
The report says the ultra high net worth population in Bangladesh posted a 17.3 percent growth over the last 6 years. That means, during this period, Bangladesh saw the steep rise in rich people out numbering China and USA. Actually Bangladesh topped the list of the countries put in descending order. In the rate of growing uneven resource accumulation in few hands, Bangladesh comes first. Then China, then Vietnam, Kenya, India, Hong Kong, Ireland, Israel, Pakistan and then United States. In the study of World Ultra Wealth Report, the World has 255,855 billionaires. But question is different. No-one has questions about the riches of Bill Gates or Jeff Bezos. Wealth accumulation so to say in the right way ( though it may be debatable) is acceptable. But fabulously accumulating wealth in few hands in a country like Bangladesh definitely cannot go unquestioned. Definitely it implies the benefits of our growth have been unevenly enjoyed by few, not by all.
Experts view that there is a causal relation between the mass expropriation or looting of wealth and non-performing bank loans (NPL) with money laundering. In the name of bank loan, by taking the advantage of scheduling and rescheduling and not giving back money to bank, money is expropriated and stockpiled. On the other hand, in foreign trade, particularly in imports, mismatches in invoicing is one of the main ways of siphoning money abroad. It has increased tremendously at present and become very known to all. Particularly the recently growing inflated import bills make the concerned quarter suspicious about heavy money laundering approaching towards general election. Our ill-begotten billionaires are not willing to invest in their own country. If they did, it would have a positive multiplier effect in the economy. At least it could have seen a wider scope of employment opportunities. Rather they feel free to send their unscrupulously-earned income abroad to invest in foreign real estate. Bank looting and over- invoicing in trade at this moment are two workable ways of amassing money under the Bangladeshi variant of “Crony Capitalism”.
The number of bank loan defaulters in the country reached 230,658, and the amount of unrecovered loan from them totalled over TK 1.31 trillion until June 2018, according to Bangladesh Bank (BB). Finance Minister AMA Muhith disclosed the information in the Jatio Sangsad (JS) on 12 September in response to a query of a MP. The finance minister also informed parliament that the loan defaulters were involved with 88 banks and financial institutions (FIs). A sizable portion of bank money taken as loan and then defaulted on is laundered. Lawmakers have identified the legal loopholes as one of the major reasons why loan defaulters go unscathed in most cases. The 23rd meeting of the parliamentary standing committee on the Ministry of Finance, held recently, listed the key reasons behind the spread of the default culture. According to media report, the lawmakers proposed enactment of a new law removing the weaknesses of the existing one. Until credit worthiness is judged in its true sense, and loans sanctioned by patronage in any form, default culture will persist.
Inflated import bills are suspected to be behind for money laundering and fueling accumulation of wealth by few and thus creating inequality in socio-economic fabrics. Rise in L/C (letter of credit) opened for capital machinery imports has gone through the roof but pace of industrialization and capacity build-up are not running proportionate. Through import bill payment, by over invoicing, experts view, money is rerouting abroad. This is proved by sudden trade deficit jump at 12.14 percent in July on the back of higher import payments against slow exports. The gap stood at $1.17 billion in the first month of the current fiscal year, up from $1.04 billion in July last year, according to the latest data from the central bank.
The country’s trade deficit hit $18.25 billion in fiscal 2017-18, the highest in its history. Imports stood at $4.7 billion in July, up 17.44 percent year-on year. At the same time, exports rose 19.32 percent to $3.52 billion. Some unscrupulous people might be laundering money in the name of imports through over-invoicing which has also increased import payments. BB needs to strengthen its monitoring and supervision to rein in this criminal tendency among our businessmen. Otherwise we’ll keep performing well in the tables of Ultra-wealth, without putting food on the table for many of our fellow citizens. n
Writer is a freelance contributor