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Growth obsession deepened rich-poor divide
FROM PAGE B1
WEALTH INEQUALITY A DEEPER PROBLEM
Compared to income inequality, wealth inequality is way worse in Bangladesh, which means a minuscule portion of the population owns a disproportionate amount of wealth compared to the majority.
The “White Paper on the State of the Bangladesh Economy”, prepared by a panel of economists and experts and was submitted to the chief adviser of the interim government in December, says wealth inequality increased from 0.82 to 0.84 between 2016 and 2022.
Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, said a lack of timely intervention has led to the historically high levels of income and wealth inequality.
He said that as economies grow, income opportunities increase, especially in urban areas. However, if governments fail to address these disparities, inequality can worsen.
“Corruption has also contributed to high inequality, as power, income and wealth are interconnected in Bangladesh,” Mujeri added.
IS HIGHER TAXATION THE ANSWER?
To reduce income inequality, Mujeri, a former director general of the BIDS, suggested a progressive income tax system, where higher incomes are taxed at higher rates.
However, he acknowledged obstacles like the difficulty of accurately assessing the real income of high earners and the influence of wealthy individuals on policymaking.
Therefore, alongside tax policies, the government should prioritise creating opportunities for the less fortunate. This includes improving education for low-income families, enhancing healthcare access for marginalised groups and expanding social safety net programmes with minimal misuse of funds, he said.
Such measures are urgent to create a socioeconomic structure that is more inclusive and equitable, he added.

US consumer confidence takes unexpected hit
AFP, Washington
US consumer confidence fell unexpectedly in December, according to survey data published Monday, as concerns were raised about the impact of tariffs on the economy before Donald Trump takes office.
The president-elect pledged on the campaign trail to implement sweeping tariffs on goods entering the United States, which many economists predict would have an impact on the cost of everyday items.
Responding to the criticism, Trump has continued to insist that, “properly used,” tariffs would be positive for the US economy.
“Our country right now loses to everybody,” he told reporters at his Florida residence earlier this month, adding: “Tariffs will make our country rich.”
The US consumer confidence index slipped to 104.7 in December, down from a revised 112.8 last month, The Conference Board announced in a statement.
This was sharply below the market consensus of 113.5, according to Briefing.com.
“The recent rebound in consumer confidence was not sustained in December as the Index dropped back to the middle of the range that has prevailed over the past two years,” Conference Board chief economist Dana Peterson said in a statement.
“While weaker consumer assessments of the present situation and expectations contributed to the decline, the expectations component saw the sharpest drop,” she added.
Monday’s release is the last before President Joe Biden hands over the White House keys in January to Donald Trump, whose campaign focused on immigration and the cost of living.
But Trump’s threats to impose widespread tariffs appear to have led at least some to grow less optimistic, according to The Conference Board, which noted that write-in responses to its survey found a rise in mentions of politics and the impact of tariffs.
“Notably, a special question this month showed that 46 percent of US consumers expected tariffs to raise the cost of living,” The Conference Board announced.
Meanwhile, 21 percent expected tariffs to create more US jobs, it added.
“Politics are influencing consumer confidence this holiday season,” Nationwide financial markets economist Oren Klachkin wrote in a note to clients.
“This report marks a sour end to 2024, but we think it overstates any true deterioration in attitudes,” he said.
“We think confidence will send an encouraging signal in 2025 as tailwinds from a solid economy overpower price and policy concerns,” Klachkin added.