Sustainability, Equity and Financial Inclusion

Plenary session on “Sustainability, Equity and Financial Inclusion” on the occasion of the Bangladesh Summit of Sustainable Development 2014

On the occasion of the Bangladesh Summit of Sustainable Development 2014, InM organised a plenary session on “Sustainability, Equity and Financial Inclusion” at 11.30 a.m. on 18 August 2014, at Nabab Nawab Ali Chowdhury Senat Bhaban, University of Dhaka, Dhaka-1000. Professor S. R. Osmani, Department of Economics, University of Ulster, UK was the keynote speaker of the session.

Dr. Quazi Mesbahuddin Ahmed, Former Managing Director, PKSF; Dr. Atiq Rahman, Executive Director, BCAS; and Dr. Binayak Sen, Research Director, BIDS were the panelists of the session. The session was chaired by Dr. Qazi Kholiquzzaman Ahmad, Chairman, InM.

In the paper Professor Osmani presented that sustainable development is not just about inter-generational equity as is often thought; it is also fundamentally about intra-generational equity which interacts with the environment in multiple ways, and therefore policies aimed at promoting sustainable development must be informed by an understanding of the interactions between equity and environment. There exists a two-way causation between equity and environmental sustainability. On the one hand, environmental degradation has an asymmetric impact – with more adverse impact on households, communities and regions that are already more disadvantaged than others. Indeed, the disadvantaged people carry a double burden of environment-related deprivation – they are more vulnerable to the consequences of global environmental degradation such as those related to climate change, and at the same time they also have to contend with a poor-quality immediate environment characterised by indoor pollution, unclean water and poor sanitation. These environmental deprivations interact with other deprivations to impede the expansion of their capabilities. Thus a development path that ignores environmental quality is likely to exacerbate existing inequities and hinder the achievement of human development.

On the other hand, existing inequities – in income, in gender relations and in power relations in general – are likely to result in actions that are detrimental to the cause of environmental sustainability. The existence of such two-way causation can lead to a vicious circle in which inequity and environmental degradation reinforce each other – to the detriment of sustainable human development. It follows, therefore, that human development oriented policies for sustainability must try to address the problem of equity at the same time as it addresses the problem of environmental degradation.

Among the approaches towards promoting equity that are currently in the forefront of academic and policy discourse, financial inclusion is gaining increasing recognition as one of the potentially powerful instrument. Empirical evidence from Bangladesh shows that financial inclusion, in the form of success of microcredit, can contribute towards enhanced sustainability of the livelihoods of the poor by helping them to build up assets in good times as well as by preventing depletion of assets in bad times.