Poverty will fall to 23.34pc in 2015 : WB

---

FE Team | Published: June 21, 2013 00:00:00 | Updated: February 01, 2018 00:00:00

---

FE Report The World Bank in a report has projected the incidence of Bangladesh's poverty to decline to 23.34 per cent in 2015 if the country can maintain even 5.8 per cent average gross domestic product (GDP) growth like that of the last decade. In the worst scenario (assuming only 3.8 per cent GDP growth rate), the poverty headcount might be falling to 26.51 per cent in 2015, which is even two percentage points lower than 28.5 per cent Millennium Development Goal (MDG) target for the country, the poverty assessment report of the Bank said. In last one decade till 2010, Bangladesh's population at poor household has declined by 26 per cent due to rising labour income and reduction of family dependency, said the report of the WB titled "Bangladesh Poverty Assessment: Assessing a decade of progress in reducing poverty 2000-2010". The WB launched the report in Dhaka Thursday. Finance Minister AMA Muhith, Food and Disaster Management Minister Dr Muhammad Abdur Razzaque, Executive Chairman of the Power and Participation Research Centre Dr Hossain Zillur Rahman, General Economics Division Member Dr Shamsul Alam, WB Country Director Johannes Zutt and its two senior economists Dr Dean Jolliffe and Dr Iffath Sharif took part at the discussion on the report. The WB report said: "Bangladesh has made remarkable progress in reducing poverty from 2000 to 2010. The country witnessed steady and continuous decline in the number of poor people over the decade-from nearly 63 million in 2000 to 47 million in 2010." "The series of external shocks that affected Bangladesh in 2007 and 2008 did not significantly slow down the speed of poverty reduction," the Bank report said. It said: "Labour income, both formal and informal, was the dominant factor in higher incomes and lower poverty rates. Fertility rates have been steadily dropping over the last several decades which have resulted in lower dependency ratios and more income per capita." "In the first part of the decade (2000-2005), increase in wages in the non-farm sector was the most important factor contributing to poverty reduction. Workers moving from agriculture to manufacturing and service sector, daily and self-employed work to salaried jobs and increase in the level of education of the workforce have contributed to poverty reduction." "In the second part of the decade (2006-2010), more of the poverty reduction occurred in the farm sector, which experienced a significant increase in labour income. This higher labour income was not associated with higher level of education or changes in occupation but was largely due to an increase in real rural wages," the WB report said. About the lower dependency ratio, the Bank report said Bangladesh's dramatic fertility drop from 3.3 children per women in 2000 to 2.3 children in 2011 is a result of an aggressive, supply-driven family planning programme. Changes in living arrangement driven in part by labour mobility and changing social norms also contributed to the reduction in the dependency ratio, the report revealed. "The living conditions of the poor also improved in the first decade of 2000. Between 2000 and 2005, a large number of households saw an improvement in terms of materials used in the constructions of their homes and access to services." "Between 2005 and 2010 while the poor continued to improve the quality of their homes, the largest improvements for all households were in terms of the amenities households owned such as television sets and cellular phones." "From 2000 to 2005, the East (Chittagong, Dhaka and Sylhet) was rapidly improving, while the West (Barisal, Khulna and Rajshahi) had been lagging behind. But from 2005 to 2010, western divisions experienced larger reductions in poverty and also managed to reach levels of poverty that are closer to those of their eastern counterparts," the WB report said. The Bank report said, "A growing share of women in the labour force contributed to poverty reduction, but further increasing their participation remains a challenge. Although the labour force participation rate of women increased from 25 per cent to about 35 per cent over the decade, it still remains low by international standards." "While overall improvement in wellbeing can be seen across all regions, poverty continues to be a daunting problem with about 47 million people still living in poverty and 26 million people in extreme poverty." "Poverty in rural areas continues to be more pervasive and extreme than in urban areas, whereas urban areas remain relatively more unequal," the report said. Finance Minister AMA Muhith said increase in labour income and remittance flow to the rural areas has played a vital role in poverty alleviation in the rural areas. Food shocks and impact of the climate change are lowering the poverty reduction rate in the country, he said. Dean Jolliffe, Senior Economist of the WB and co-author of the report said, "For sustained poverty reduction, Bangladesh needs coordinated multi-sectoral action. To maintain steady growth in income, it will be necessary to promote investments to raise agricultural productivity and also to promote more jobs in manufacturing and service sectors." "Bangladesh spends over 2.0 per cent of its GDP on safety-net programmes but reaches only a third of the poor. Bangladesh needs to focus on improving the linkage between safety-nets and poverty reduction through improved design, targeting and timing of safety net responses. For example, the large number of cash allowances could be linked to human capital formation and targeted to the poor. " said Iffath Sharif, Senior Economist of the Bank and co-author of the report. WB country director Johannes Zutt said: "Against the odds, Bangladesh lifted 16 million people out of poverty in the last 10 years and also reduced inequality; that is a rare and remarkable achievement." "Bangladesh now needs to help a growing population of young adults to obtain the skills and education needed to find productive work and to participate fully in Bangladesh's social and political life. The World Bank remains committed to working with the government to help all Bangladeshis escape poverty and share in the country's growing prosperity," he said. Dr Abdur Razzaque said poverty rate is declining faster than the cut of malnutrition rate in Bangladesh. He suggested the WB to survey how the social safety-net programmes of the government are contributing to the poverty eradication. Hossain Zillur Rahman said structural transformation in the rural economies has helped reducing poverty faster. Although Bangladesh has made impressive progress over the decade, now malnutrition should be taken as key agenda for poverty alleviation in the next decade, he suggested. He cautioned about urban poverty which is not declining compared to rural poverty. GED Member Dr Shamsul Alam said Bangladesh has made impressive progress in last one decade. The government's social safety-net programmes, remittance flow to the rural areas and reduction of the dependency ratio are the major reasons behind the impressive poverty reduction in the country, he said.