An important answer to look for in the budget

Budget Fy19-20

An important answer to look for in the budget

One of the best instruments the government can use to serve those it works for—presumably the citizens—is the national budget. Unfortunately, if one was to ask ordinary citizens, independent analysts and experts to rate how successfully the government implemented and formulated recent budgets, it would not get an A+, not even close.

Budget implementation being a struggle is an old story. And while one can hope to hear a different tale this time, it is too early to concern ourselves with that—but not too early to draw up an improved budget which will be more inclusive in who it aims to benefit, compared to the previous years. As there has been no dearth of empirical (real-life) evidence and people to put them into context by now, highlighting in very obvious terms the faults in past budgets.

One of the biggest blunders made by the government in past budgets was its failure to address inequality—not only by not adopting measures to reduce inequality but also because budgetary allocations themselves worsened it. And this should not be taken lightly, particularly given how the “inequality” that I am referring to is deeply tied to a number of different things.

Take, for instance, the poor allocations to matters of social security such as healthcare.

A major shock that generally threatens to put middle-class families into lower income groups, or even poverty, is some form of critical illness. This is why it is essential for the government to provide good healthcare services at low cost, to keep the market competitive, and to prevent private healthcare cost from rising astronomically. But so far, practically nothing has been done to make healthcare more affordable. Over the last years, budgetary allocation for healthcare has been abysmal, so much so that in 2016 the government provided just 4.3 percent of budgetary allocation to healthcare, which was the lowest since 2010-11, amidst increasing health concerns among the general populace due in large part to worsening environmental conditions. This figure has gone up in the last two years, but barely. And per capita government spending on healthcare is still embarrassingly low, at nearly half the USD 54 recommended by the World Health Organization.

This, despite the fact that four to five million people are being pushed into poverty every year because of healthcare expenditures (according to a 2015 study by the health ministry). And those already in lower income groups, especially those outside the capital, barely have any quality healthcare options available to them—forcing them to seek treatment in Dhaka and bear absurdly high healthcare and lodging costs as a result.

This brings us to the issue of regional disparity. When we think of inequality, more often than not we think along class lines. However, some of the worst forms of inequality tend to exist along regional boundaries—like it does within Bangladesh.

According to Fahmida Khatun, Executive Director at the Centre for Policy Dialogue, public policy can play “the most important role” in reducing the “gap between the advanced and less advanced districts.” If we look at the nature of public policies in past years, we can see that her assertion is true, but in reverse.

For example, according to a Prothom Alo report, three of the most developed regions in the country—Dhaka, Chattogram and Gopalganj—are getting about 37 percent of the total development budget allocation. And whereas there could be valid arguments for why they get relatively higher allocations (even though perhaps not this high), what is absolutely shocking is that the most poverty-stricken districts of Kurigram, Rangpur, Dinajpur, Gaibandha and Lalmonirhat receive the least amount of development allocation according to the government’s own figures—Kurigram gets 0.8 percent, Rangpur 0.8 percent, Dinajpur 0.5 percent, Gaibandha 0.3 percent and Lalmonirhat 0.5 percent. This has only contributed to the rising disparity happening across regions.

Returning to social security, past budgets show us that the government has also neglected the education sector, similar to healthcare. Despite signing the Dakar Declaration years ago, which says the government would increase budgetary allocation to the sector to 6 percent of GDP, the government seems to have forgotten its obligation.

Budgetary allocation to education has been floating at around 2 percent, whereas, according to noted educationist Syed Manzoorul Islam, “investment in the sector should be 25 percent of total budgetary outlay, or 6 percent of GDP.” As many eminent academics have pointed out, allocation to education should not be increased all at once because of the issue of absorption capacity. This makes the government’s refusal to increase allocation step-by-step every year by significant amounts—so that it doesn’t create a situation where allocation cannot be increased because the sector hasn’t developed the capacity to absorb it—all the more confusing. It’s especially so when we look at the fact that similar to healthcare, budgetary allocation to education in 2016 was the lowest since 2009-2010, at only 1.8 percent of gross domestic product.

While all this has been happening, the government injected a total of Tk 20,584 crore of taxpayers’ money into the state-run banks in the last 17 years for which it has nothing to show for—nothing good at least—as the wheel of endless bank bailouts in the face of increasing default loans continues to spin at an ever-faster rate. Why is this significant? Because it leaves the government no excuse to claim it didn’t have enough resources to invest in matters of social security, such as education and healthcare—since it wasted more than Tk 20,000 crore to appease banking and other special interests.

It further gives rise to another question: why the government’s budgetary policies have been designed not to help the majority of people, which automatically would have helped reduce inequality, but rather a select group of people, including many in the banking sector. Is it because these policies are not really working for the general populace but rather a handful of special interests?

Given that its past “mistakes” have become so obvious by now, and have been pointed out loud and clear by a number of people, we might get the answer to that question after all—by checking the next budget (and subsequent budgets after that) to see if the government has reversed its bad policies or if it has decided to continue with them, giving to the few by taking from the many.

Eresh Omar Jamal is a member of the editorial team at The Daily Star.

His Twitter handle is: @EreshOmarJamal

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