First News
Volume:7, Number:49
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COVER STORY
THIS WEEK

The End of Poverty?

Once sidelined as a “bottomless basket”, Bangladesh is now being lauded as shining example of poverty reduction in the world

| Shova Rahman |

Henry Kissinger, the former US foreign secretary, dubbed Bangladesh as a "bottomless basket" immediately after its birth in 1971. Even other well-meaning experts sounded warnings that the fragile state was going to collapse. But Bangladesh emerged from the ashes of a bloody war of independence as the world's second poorest nation. It increasingly silenced the skeptics by proving its resilience against the devastating 1974 famine and a series of crippling cyclones.

From 2000 onwards, the economy of Bangladesh has been growing consistently at 6 percent a year on average. For poverty and extreme poverty reduction, in recent years, Bangladesh is being tagged globally as ‘the land of impossible attainments’. The country has already achieved the targets meant for a hunger and poverty-free society under the Millennium Development Goals (MDGs). Development officials from other nations now visit Bangladesh to learn the secrets of its success. The success in poverty reduction has been well-acclaimed by the international community.

“Bangladesh has had remarkable success in cutting the number of people living in poverty by almost half and its innovations are well known -- many countries have learned from them,” said World Bank Group president Jim Yong Kim who visited Dhaka on October 15, 2016 to recognize the achievements of Bangladesh in poverty alleviation.

Poverty and Bangladesh Bangladesh, home to a huge population of 160 million, cannot escape the severity of poverty. Poverty is the single most important socioeconomic policy challenge for Bangladesh. The constitution of Bangladesh provides clear directives for formulating propeople development strategies and goals. Bangladesh’s constitutional guidelines are rooted in a framework aimed at raising the quality of life through a balanced and equitable growth. To fulfill this fundamental commitment, Bangladesh has been struggling for a long time to reduce the incidence of poverty and to improve the living standards of its millions of impoverished citizens. In recent years, Bangladesh has made considerable advancement in reducing poverty.

Bangladesh experienced a uniform and steady decline in poverty rates between 2000 and 2010. Poverty declined 1.8 percent annually between 2000 and 2005, and 1.7 percent annually between 2005 and 2010. There was a continuous decline in the number of poor people—from nearly 63 million in 2000, to 55 million in 2005, and then 47 million in 2010. Despite a growing population, the number of poverty-stricken people declined by 26 percent in 10 years. When the Bangladesh Awami League-led alliance government took office in 2009, around 50 million people of the country were poor, of which 28.8 million were in the clutches of extreme poverty.

During the previous term (2009- 2014) of the Awami League government, though population growth rate was 1.16 percent on average, the number of poor and extreme poor came down to around 38.05 million and 15.07 million respectively, according to the Ministry of Finance. Many of the extreme poors have crossed the poverty line over the last two decades. The government has predominantly emphasized poverty eradication in its development strategy to reduce the poverty rate from 31.5 percent in 2010 to 15 percent by 2021.

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Abul Maal Abdul Muhith Finance minister of Bangladesh Government

Bangladesh has been in the global spotlight for many of its remarkable achievements where poverty reduction is one of them. I can hope that poverty would no longer exist in Bangladesh after 2024. But it is matter of fact that half of the world's extreme poor now live in Sub-Saharan Africa, and another third in South Asia. Unless we can foster faster global growth and reduce endemic inequality, we risk missing our SDG target of ending extreme poverty by 2030. To end poverty, we must make growth work for the poorest, and one of the surest ways to do that is to reduce unacceptable income disparity. Bangladesh made impressive strides in reducing the poverty level from more than 70 percent of its population in 1971, the year we bec ame independent as a nation, to 56.7 percent in 1991-1992 and to 23 .4 percent in 2016. So, we are very much optimistic about the complete eradication of poverty within the stipulated time.

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AHM Mustafa Kamal Planning minister of Bangladesh Government

The Awami League-led alliance government since it took office in 2009 has been playing an instrumental role in improving the living standards of millions of people living below the poverty line through different policy initiatives and planned economic development aimed at poverty alleviation. Due to consistent improve - ment in poverty situation, Bangladesh has achieved the recognition of “the land of impossible attainments” globally as the country has become successful in attaining the objectives set under the Mil lennium Development Goals (MDGs). In 2009 when the Awami League government took over the state power, the number of poor people was 50 million of which 28.8 million were extreme poor. The recent World Bank data suggest that the percentage of extremely poor people in Bangladesh has declined to 12.9 percent in 2016 and it was 18.5 percent in 2010. We have able to achieve this success because of prudent leadership of prime minister Sheikh Hasina and the combined effort of our government.

37.6 million still live below the poverty line

A total of 37.6 million people, 23.5 percent of the total population, still live under poverty in Bangladesh, according to the latest figures of the General Economic Division (GED) that reveals the economic data of the country and estimates on poverty. According to the GED, a total of 37.6 million people are still poor including 19.4 million ‘extreme poor’. The poverty rate has gone down by 1.3 percent in one year as the poverty rate was 24.8 percent in 2015.

According to Bangladesh Bureau of Statistic (BBS), anyone who earns less than BDT 1,300 monthly is considered to be extreme poor. The World Bank, however, estimates anyone earning less than BDT1,297 as extreme poor. Those who earn less than BDT1,600 monthly are considered moderately poor. In 2009, Bangladesh had 50 million moderately poor including 28 million extremely poor people, according to BBS statistics. Following the new international poverty line of USD1.90 a day and 2011 purchasing power parity (PPP) conversion rate, 28 million (18.5 percent) Bangladeshis lived in extreme poverty in 2010. More than 16 million people in Bangladesh graduated from extreme poverty to moderate poverty between 2000 and 2010, a World Bank report said. The report further said that to move to the next level and to become a middle income country by 2021, as well as to overcome extreme poverty by 2030, the country needs to sustain its economic and remittance growth, create more and better jobs, focus on energy and transportation infrastructure, and make progress on improving the quality of healthcare and education.

There is much to be done to complete Bangladesh's development journey and to give all its citizens the opportunities they deserve. Bangladesh has made tremendous success in poverty reduction and now is the time to build on these successes and end poverty in Bangladesh in our lifetime,” said professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD).

20 million extreme poor

Despite cutting the rate of extreme poverty from 34 percent in 2000 to just 12.9 percent in 2015-16, 20 million Bangladeshis still live in conditions considered to be ultra poor, according to a new estimate of the World Bank. The ultra poor generally do not own land and are caught in the low-wage activities of day laborers. The revised poverty rate is based on the new international poverty line of USD1.90 a day and 2011 purchasing power parity (PPP) conversion rate.

PPP provides a measure of price level differences across countries. However, according to the latest household survey conducted in 2010, under the new international poverty line, 28 million, or 18.5 percent of Bangladeshis lived in extreme poverty. In contrast, the extreme poverty rate at the now retired line of USD1.25 per day was 43.3 percent or about 65.50 million people as per 2005 PPP. The rate reconfirms the impressive pace of poverty reduction in the past three decades. Two new reports -- Bangladesh Development Update and Poverty and Shared Prosperity 2016: Taking on Inequality -- find that Bangladesh is making sustained progress in poverty reduction and opportunity enhancement. The international extreme poverty line was updated in October 2015 from USD1.25 a day at 2005 PPP to USD1.90 a day at 2011 PPP for most countries, to reflect new price data. While most countries reported updated statistics at that time, the World Bank did not apply the 2011 PPP for Bangladesh.

The Purchasing Power Parity (PPP) exchange rate of taka relative to the US dollar in 2011 was BDT24.8 per USD1 as per the 2011 PPP, but it was BDT52.4 per USD1 according to the 2005 PPP. The BBS calculates poverty line based on calorie intake. Those consuming below 1,805 calories a day are bracketed as extreme poor. Still, Bangladesh is currently the 64th poorest nation out of 154 countries and much remains to be done. "I believe that Bangladesh will get out of poverty by 2024, well ahead of the global target of 2030, as the country is moving ahead fast on the economic front,” said finance minister AMA Muhith. While talking about the government’s next target to remove poverty, economist Wahiduddin Mahmud said achieving the goal of reducing extreme poverty to less than 3 percent of Bangladeshis by 2030 will require economic growth becoming more inclusive with the poorest 40 percent of society receiving greater benefits from the development.

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Mirza Fakhrul Islam Alamgir Secretary general of BNP

Bangladesh has attained remarkable success in poverty reduction because of all-out efforts of various governments. The success we have achieved in this sector now began long time ago. Any single person or any specific government could not claim credit for this success. The success in poverty alleviation began during the tenure of late president Ziaur Rahman. After that, all the successive governments carried out the process to achieve this success. Especially, I can say that Grameen Bank of Muhammad Yunus, Brac of Fazle Hasan Abed, and many others NGOs played an important role in the poverty reduction in the country. But, the present government is trying to take the credit alone which is very unfortunate and unexpected.

Alarming increase in urban poverty

In terms of poverty alleviation, the government and other nongovernment organizations have been focusing on rural poverty over the decades, while urban poverty remained neglected. As a result, the number of poor people in the urban areas are increasing alarmingly. For example, according to the latest report of the World Bank, the number of urban poor in Bangladesh rose about 33 percent to eight million between 1992 and 2010. However, the number of rural poor decreased from 55 million to 46 million during the period. The quality of life of the urban poor is also worse than that of the rural poor. The urban poor often face deprivation of education and health services. This is happening despite the fact that urbanization is occurring rapidly in the country, and that over 60 percent of the national GDP comes from cities. According to BBS, urban population in the country will rise to nearly 102 million by 2050, which will be 44 percent of the total population.

There is also huge income disparity in the cities. For example, households with monthly income below BDT25,000 constitute 58.4 percent of households in Dhaka but they enjoy an income share of only 21 percent. In contrast, the top-ranked class with monthly household income above BDT100,000 constitutes 5.4 percent of all Dhaka households, but enjoys an income share of 39.9 percent. Dwelling on the urban poverty, professor Wahiduddin Mahmud said extreme urban poverty is the worst form of human deprivation in some parts of urban population, which is increasing rapidly. Policymakers neglected urban poverty because they thought it is a spillover effect of rural-urban migration. I think that the authorities should focus on urban poverty urgently.

Over 30 million children under poverty line

According to the UNICEF, over 30 million children in Bangladesh - about half of all Bangladeshi children - are living in poverty while about one in four children is deprived of at least four basic needs among the following: food, education, health, information, shelter, water, and sanitation. According to the UNICEF survey funded by the UN, children constitute 45 percent of the country's population. Of them, 46 percent live below the poverty line with their one-fourth being extremely poor.

According to the study, 64 percent of children in Bangladesh are deprived of sanitation, 59 percent are deprived of information, 57 percent are deprived of nutrition, 41 percent are deprived of shelter, 16 percent are deprived of health, 35 percent are deprived food and 8 percent are deprived of education. One key determinant of child poverty is the level of the mother’s education: the higher the mother’s level of education, the lower the chance for the child to be affected by deprivation. The mother’s education also has a mitigating impact on the severity of the child’s deprivations. Moreover, according to a World Bank report, the number of women in the workforce has doubled while the birth rate has decreased from 6.2 births per woman in 1990 to just 2.2 in 2016. About 40 percent fewer women died during childbirth in 2015 compared to that in 2001. The number of children dying before their fifth birthday dropped by two-thirds between 1990 and 2013.

Dhaka division home to highest number of poor

According to the Poverty Maps 2010, Dhaka division has the highest share of the country's poor population, followed by Chittagong, as people from impoverished areas have migrated to these economic hubs in search of employment. Of a total of 49.40 poor people of the country, 15.90 million or 32.3 percent live in Dhaka and 82.99 lakh in Chittagong. This means nearly half of the country's total poor population lives in these two regions. Interestingly, these two divisions make the highest contributions to the national GDP, with Dhaka metropolis alone contributing 36 percent and Chittagong 11 percent.

The maps also show that 10 upazilas of Dhaka division have 55 percent or higher poverty rate while it is less than 4 percent in 10 other upazilas. In Chittagong division, 50 percent or higher poverty rate was found in six upazilas whereas the incidence was below 4 percent in the six others. While Sylhet is amongst the country's most well-off regions, over 50 percent of the population of Gowainghat upazila live in poverty. Similarly, three upazilas in Khulna division have a poverty rate of 50 percent or above.

According to another reports of BBS, from 2000 to 2005, the East (Chittagong, Dhaka, and Sylhet) was rapidly improving, while the West (Barisal, Khulna, and Rajshahi) had been lagging behind. The poverty pattern changed in the next five years. Between 2005 and 2010, the western divisions experienced larger reductions in poverty and also managed to reach levels of poverty that are closer to those of their eastern counterparts.

Rangpur division faces highest poverty Over the past one and a half decades, Bangladesh has made significant improvement in poverty reduction, thanks to steady economic growth. However, the reduction in poverty did not happen evenly in all the regions, mainly because of unequal economic development. Rangpur division has the highest poverty rate despite the government efforts to eliminate monga (famine-like situation) from the country’s northern region over years. Rangpur still faces the highest 27.7 percent ultra-poverty stricken people, according to the division- wise poverty rate, while poverty in Chittagong is now the lowest. Dhaka faces the lowest rate of poverty in urban population of 3.8 percent while Barisal faces the highest poverty in urban areas of 24.2 percent. The average poverty rate in the division is 42 percent followed by Barisal with a poverty rate of 38.3 percent, Khulna 31.9 percent, Dhaka 30.5 percent, Rajshahi 27.4 percent, Chittagong 26.1 percent, and Sylhet 25.1 percent, according to the Bangladesh Poverty Maps 2010.

The division-wise poverty rates according to the available statistics of BBS are as follows. In Barisal 27.3 percent in rural and 24.2 percent in urban areas; in Chittagong 16.2 percent in rural and 4.0 percent in urban areas are extreme poor, while 23.5 percent rural people in Dhaka are poor against 3.8 percent of the urban population. In Khulna the scenario is different, 15.2 percent rural population is poor against 16.4 percent urban people. In Rajshahi 22.7 percent people in the rural area are poor against 15.6 percent urban population, while newly established Mymensingh division has 16.4 percent rural people as poor and 14.4 percent urban people as poor. In Rangpur, 29.4 percent rural people are poor against 17.2 percent urban people, while 23.5 percent Sylhet people in rural area are poor against 5.5 percent urban population.

Highest number of poor live in Kurigram

A poverty map of Bangladesh shows that the highest numbers of poor people live in Kurigram district while the rate is lowest in Kushtia district. BBS and the World Bank in collaboration with the World Food Program (WFP) prepared the poverty map. The poverty map of Bangladesh was launched with the aim to enable the government and policymakers to identify the poorer areas and allocate resources for pulling the distressed out of the curse.

Kurigram tops in the district level poverty rate where 63.7 percent people are poor while the poverty rate in Kushtia district is only 3.6 percent. In terms of districts, Kurigram has the highest poverty rate of 63.7 percent followed by Barisal 54.8 percent, Shariatpur 52 percent, Chandpur 51 percent, Satkhira 46.3 percent, Sirajganj 38.7 percent and Sunamganj 26 percent, according to the study. The lowest poverty rate was recorded in Kushtia at 3.6 percent, Noakhali at 9.6 percent, Dhaka at 15.7 percent, Bogra at 16.6 percent, Barguna at 19 percent, Sylhet at 24.1 percent and Panchagarh at 26.7 percent. The maps show that the northern and southern districts, apart from Barisal, have a high prevalence of poverty and low primary school completion rates. Similarly, poverty appears to be high in chronic disaster-prone areas such as the districts along the Jamuna River where the communities are repeatedly affected by river erosion and flooding and in the southwest, which is prone to cyclones, tidal surges, and salt water intrusion and water-logging. The government officials claimed that starvation in the monga-hit northern region has now come down to 3 percent from 45 percent mainly due to the government’s economic activities in the area.

Comparison with India and Pakistan

The number of people living in extreme poverty in the South Asia region has fallen to 13.5 percent in 2015, compared to 18.8 percent in 2012, according to new World Bank report. While there has been impressive progress made toward reducing poverty due to strong growth and resilience in the South Asian countries, the region is still home to a very large number of poor. As compared to this, East and Southeast Asia almost halved the rate of poverty during the same period of time.

In comparison with India and Pakistan, Bangladesh is more ahead in poverty alleviation. For example, India accounted for the largest number of people living below international poverty line in 2013, with 30 percent of its population under the USD1.90-aday poverty measure, according to the World Bank report.

India accounts for one in three poor persons in the world, the international lender. India had 30 percent of its population living below poverty line at 224 million, the global lender said. Nearly 800 million people lived on less than USD1.90 a day in 2013, around 100 million fewer poor people than in 2012, it added. Whereas in Pakistan, four out of 10 persons are living in acute poverty with the population of Balochistan faring the worst among the provinces, according to Pakistan’s first-ever official report on multidimensional poverty. The report shows a sharp decline in national poverty rates falling from 55 percent to 39 percent from 2004 to 2015. The report states 38.8 percent of Pakistan’s population lives in poverty. A majority of the rural population (54.6 percent) lives in acute poverty, while this ratio is only 9.4 percent in urban areas.

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