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BIDS study

Poverty declines despite Covid-19

It found the pandemic stopped children's education, suggests initiating education recovery programme

FE REPORT | May 18, 2023 00:00:00

Director General of Bangladesh Institute of Development Studies (BIDS) Dr Binayak Sen speaks at an event titled 'Development Prospects and Challenges' at a hotel in Dhaka on Wednesday. Planning Minister MA Mannan was present as the chief guest at the event arranged by BIDS. — FE photo

The poverty headcount in the country decreased by 4.3 percentage points during a period between 2019 and 2022 while the proportion of extreme poor went down by 3.2 percentage points.

Self-employment income, government transfer receipts, access to mobile financial services and financial dissaving have contributed to the poverty reduction, according to findings of a latest research conducted by the Bangladesh Institute of Development Studies (BIDS).

Director General of the state-run research body Dr. Binayak Sen revealed the findings in a presentation on "Urban Poverty Dynamics During Covid-19: Anatomy of Resilience" at the inaugural session of a two-day BIDS Research ALMANAC 2023 in a city hotel on Wednesday.

"As many claim that the poverty situation deteriorated significantly during the Covid-19, the BIDS study examined the claims by using macro, sectoral and household-level panel data," he told the event.

To the extent that the Coronavirus mainly concentrated in urban areas of Bangladesh with greater spread recorded in the megacity of Dhaka, the research findings on urban poverty dynamics merit closer policy attention to understand the wellbeing effects of the pandemic.

However, the analysis of poverty dynamics further revealed that urban chronic poverty is still considerable even in a high-growing megacity like Dhaka.

"About one-tenth of the urban population belonged to this category," said the study. The evidence further showed the importance of "new poor" as a new social category emerging as a result of the pandemic.

"Out of the contingent of the total poor in 2022 (whose overall incidence is on decline), 51 per cent belong to the 'new poor' category," Dr Sen said in his keynote paper.

These 51 per cent or around 15 million people have slipped below the poverty line after losing their jobs and businesses during the pandemic.

The study did not find any significant adverse effects of coronavirus on increasing divorce rate, triggering adolescent marriage rate for daughters, or deteriorating law and order in the community during the difficult months.

However, 23.5 per cent of extreme poor households reported that they had to stop their children's education - 13.6 per cent for the poor, 10.3 per cent for the lower middle class and 8.0 per cent for the upper middle class.

The study suggested initiating a special education-recovery programme for the urban poor to minimise the learning losses and facilitate re-entry of their children into the educational stream.

Dr Sen criticised a study that suggested the poverty rate had soared to 42 per cent during the pandemic, saying it was a 'blunder' caused by hurried research.

Based on their work in 2020, some development organisations said the poverty had doubled. In January 2021, researchers of the South Asian Network on Economic Modeling, or SANEM, claimed that the poverty rate had climbed to 42 per cent based on a survey carried out across 5,577 families around the country in November-December 2020.

Mr Sen claimed that it was 'temporary and for that time only'. "This happened in April-June 2020 and began falling after June."

Another joint survey of Power and Participation Research Centre (PPRC) and BRAC Institute of Governance and Development (BIGD) also claimed in June last that the number of new poor in the country stood at 30.9 million, which was 18.54 per cent of the population.

A year ago, the same researchers found that the pandemic had pushed 24.5 million people - 14.75 per cent of the country's population - into poverty in one year.

Speaking at the inaugural session, Planning Minister MA Mannan emphasised on reducing the widening gap between the urban and rural population, and urged the researchers to use one type of data for the entire country rather than dividing urban and poor.

He admitted that the inequality is increasing in the country and said inequality is a core problem in every developing nation.

"I think the inequality is created by us. So we have to create new resources and bridge the gap by fairly distributing it in the social safety sector."

He also called for conducting more research on how to increase the existing wealth, underscoring the need for removing discrimination from society.

"We need to conduct research on how we can increase our existing wealth," said the minister. "Wealth creation comes with the risk of discrimination. However, deliberate discrimination can be controlled by creating a society based on justice."

He said poverty cannot be eliminated entirely but it can definitely be reduced to some extent. "It is something that is created. So it can be reduced as well."

Mr Mannan said the government has adopted social safety net programmes to improve the living standard of the poor and underscored the importance of knowing the contributions of domestic work to recognise the real economic scenario of the country.

It is important to know the contributions of domestic work carried out by our mothers and sisters at home so that we can draw a parallel picture of our economy, he added.

State Minister for Planning Dr Shamsul Alam said the research will help the government plan projects and appreciated Dr Sen for breaking the myth that Covid had increased the poverty in the country.

According to a paper titled "Public Paddy e-Procurement Programme in Bangladesh: Effects and Efficacy" presented at the first technical session, paddy e-procurement has a positive effect on rice income.

The study conducted by Taznoore Samina Khanam, Kazi Iqbal and M. Mehrab Bakhtiar found higher transaction cost in e-procurement than that of the traditional system due to mismanagement.

It also found that many times the "Krishi card" is being used by the non-farmers while the farmers are not aware of it. "In this case, it is necessary to provide a registered mobile phone number in the card."

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