Poverty in Bangladesh has fallen faster recently to 18.7 per cent, but in a disparate socioeconomic development, as a national survey shows gaping income inequality between upper and lower strata of people.
Overall poverty rate dropped to 18.7 per cent in 2022 from a high at 24.3 per cent in 2016, while the extreme poverty also fell significantly to 5.6 per cent from 12.9 per cent during the period, according to findings in the Household Income and Expenditure Survey (HIES) 2022, unveiled Wednesday in Dhaka.
Disparity or uneven distribution of national resources, opportunities or benefits among different individuals and groups has widened simultaneously as manifest in the Income Gini coefficient that reads higher at 0.499 in 2022 from 0.482 in 2016.
Gini coefficient is a proven gauge for measuring income inequality with a 0-1 spread where the 0 means absolute parity and the 1 absolute disparity or inequality.
Analysts say government social safety-net recipe is not enough to reduce the income inequality rather it warrants addressing the issues through generating massive employment for the poor.
However, the monthly income per household (HH) increased by 102.78 per cent to Tk32,422 in 2022 from Tk 15,988 in 2016 and Tk 11,479 in 2010, the HIES data show.
Similarly, the monthly expenditure per household also increased significantly to Tk 31,500 in 2022 from Tk 15,715 in 2016.
The Bangladesh Bureau of Statistics (BBS) unveiled its preliminary data on the HIES 2022 with Planning Minister MA Mannan present as the chief guest on the occasion.
State Minister for Planning Dr Shamsul Alam, Statistics and Informatics Secretary Dr Shahnaj Arefin, General Economics Division Member Kawser Ahamed and World Bank Practice Manager Ms Caprio also spoke at the function.
Mohiuddin Ahmed, Director of HIES Project, presented the key findings with BBS Director-General Matiur Rahman in the chair.
According to HIES, the poverty in urban areas has been reduced to 14.7 per cent and in rural areas to 20.5 per cent from 18.9 per cent and 24.3 per cent respectively in 2016.
Among the extreme poor, the hardcore poverty is higher in rural areas as it was recorded at 6.5 per cent. The poverty rate in urban area is 3.8 per cent, as of 2022.
The survey data show that the income inequality between urban and rural populations has been rising over the years, with the urban disparity being higher than the rural.
In 2022, the Gini coefficient in rural areas was recorded at 0.539, while in the rural area, it was estimated at 0.446.
The gap between rural and urban disparities was lower in the last HIES period in 2016 than the latest period till 2022.
In 2016, the Gini coefficient in urban areas was 0.498 and in the rural areas was 0.454.
In 2010, the income gap between the urban and rural areas was also lower as the Gini coefficient in urban areas reads 0.452 and in rural areas 0.431.
Asked, State Minister for Planning Dr Shamsusl Alam said when a country’s economy gets on a rising stage, its inequality also rises to some extent.
“But Bangladesh’s Gini coefficient (income inequality) is still below 0.5, which is not a matter of concern. Actually the country’s Gini has increased slightly over the last 12 years.”
Dr Alam claims this Gini coefficient as almost stable in Bangladesh.
Planning Minister MA Mannan, however, said the rising income inequality is definitely a concern “for us”, but the government is aware of it.
“We have already expanded our social safety-nets and other programmes for the poor. Some employment-generation schemes are already there. I hope it will be narrowed down gradually in the coming days,” he added.
The HIES 2022 shows that the per-capita monthly income of the people has risen to Tk 7,614 in 2022 from Tk 3,940 in 2016.
In Bangladesh’s each household out of Tk 30,603 in monthly consumption expenditures, they spend Tk 14,003 per month or 45.75 per cent for food intake and the remaining Tk16,600 or 54.24 per cent for non-food expenditures.
In the food intake, the Bangladeshi people have cut their dependency on rice and raised protein and vegetable consumptions over the years.
So, their per-capita calorie intake is estimated higher to 2393 K.cal in 2022 from that of 2210.4 K.cal in 2016.
The average household (HH) size became a bit bigger in 2022 as the size was recorded at 4.26 from that of 4.06 in 2016, HIES data showed.
The average HH size in rural areas is 4.30 while in urban areas is 4.18, according to the latest data.
Some 87.4 per cent of the HH are dominated by male while 12.6 per cent by the female.
The sex ratio in Bangladesh has been estimated at 100.8 males per 100 females in 2022.
The country literacy rate has widened impressively as 74 per cent of the population over 7 years of age are literate.
In terms of access to electricity, the 99.34 per cent HHs are now connected with the power supply, as per the HIES data.
According to HIES, 92.32-percent people have improved toilet facilities, while 6.99 per cent have unimproved toilets and rest 0.69 per cent people openly defecate.
The financial inclusion has improved in Bangladesh as 14.12 per cent HH had bank account in 2022. The rate was only 7.5 per cent six years ago in 2016.
Some 10.47-percent HHs have migrated inside the country `or abroad in 2022 which rate was 11.22 per cent in 2016.
Centre for Policy Dialogue (CPD) Research Director Dr Khandker Golam Moazzem says it is a positive news that Bangladesh’s poverty got reduced remarkably, rebounding from the Covid impact.
“Rice, remittance and RMG have played vital role during the Covid to rebound the economy,” he adds.
However, Bangladesh government’s social-safety net may support the poor for food security a bit but it has failed to reduce the income inequality, he notes.
“So, only the social-safety net is not enough rather income generation schemes, progressive taxes on the wealthy persons and businessmen are needed,” Dr Moazzem says.
Former World Bank Lead Economist Dr Zahid Hussain says it is interesting that the income inequality in urban areas has gone up and it is reduced in rural areas.
"The lower-income growth associated with lower inequality and higher poverty- reduction rate in rural areas require a further research."
The infrastructure development including electricity coverage in the villages might have a key role in the higher poverty reduction in the rural areas than the rate in the urban areas, Dr Hussain told the FE.
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