Inflation enforces a change in people's set patterns of living as price hike of necessities prunes people's food platters and erodes their savings, a survey finds and recommends remedies.
At least 70 per cent of Bangladesh's households have changed their food habits in last one year amid price hike, according to the survey by a local eco0nomic think-tank and a foreign one.
Also, it has found out that 35 percent reduced non-food expenditure, 28 per cent resorted to borrowing, and 17 percent depleted savings.
"Such a large cut down on food-consumption habits puts households at risk of food insecurity," says the report on the survey jointly conducted by the South Asian Network on Economic Modeling (SANEM) and the Global Development Institute at the University of Manchester.
The research, titled 'COVID-19 Pandemic, Post-pandemic Challenges, and Poverty Dynamics in Bangladesh: Evidence from a Longitudinal Household Survey', is a part of the COVID-19 Learning, Evidence and Research Programme (CLEAR) in Bangladesh, managed by the IDS, the University of Sussex, and funded by the FCDO.
Through the use of the upper poverty line, the incidence of poverty is estimated at 20.7 percent at the national level, 21.6 percent in rural areas, and 18.7 percent in urban areas. Using the lower poverty line, the incidence of extreme poverty is estimated at 7.9 percent at the national level, 8.9 percent in rural areas, and 5.4 percent in urban areas.
At the divisional level, the highest poverty rate was estimated in Rangpur and Barishal, 42.9 percent and 32.5 percent, respectively.
The study reveals that the rural multidimensional poverty rate has fallen from 30.4 percent to 27.6 percent, while in the urban areas it increased from 16.8 percent in 2018 to 18 percent in 2023.
Along with a rising poverty rate, this study also finds rising income inequality in the country. Inequality at the national level grew slightly from 0.31 percent in 2018 to 0.32 percent in 2023.
Against the rising poverty and inequality in the country, only 37 per cent of the households received at least one social safety-net programme in the past year of the survey (October 2022- September 2023) compared to 27 percent in 2018.
Disparity was evident in education, too, during the COVID-19 pandemic.
Online-class facilities generated inequality in education among children of different socioeconomic classes. From the poorest 20 per cent of the households, only 8 per cent participated in online/ distance-learning programmes.
In the case of the richest 20 per cent of the households, the online- participation rate was 40.3 per cent. "No available online class activities, not having a device, and unavailability of an internet connection were the most reported reasons for not participating in online classes," says the report.
In the post-pandemic scenario, this study finds that 15 per cent of children aged 5-15 were not attending schools, compared to 13 percent in 2018.
Compared to 2018, the average per-capita health expenditure increased more than threefold in 2023 to BDT 1,704 monthly. However, the rise is not symmetrical across all income groups. The rise was just twofold for the poorest 20 per cent of the households, while for the richest 20 per cent of the households, the rise was sixfold.
The unemployment rate is estimated at 3.9 percent at the national level, 3.6 percent in rural areas, and 4.6 percent in urban areas. Unemployment is higher in early-age groups (12.4 percent in the age group 15-24 and 6.1 percent in the age group 25-34). Among the permanent returnee migrants, 29 percent are currently unemployed.
When compared to 2018, the overall unemployment rate in Bangladesh slightly increased from 3.2 per cent to 4 per cent in 2023, primarily due to the rise in the male unemployment rate twofold in both rural and urban areas.
This study also observed the impact of the pandemic on migrant households. Since the beginning of the pandemic, many international migrant workers had to return to Bangladesh permanently. The major reasons behind these returnee migrants include losing jobs during the pandemic (33 percent), contractual issues (20 percent), disputes with the employer (14.7 percent), false/visa or victim of fraud (4 percent), amongst others.
Based on the survey findings, this study recommends for the government to roll out social-security programmes across the nation as stipulated in the National Social Security Strategy (NSSS).
"There should be more budgetary allocation and specific policies for the education sector to address the issue of children missing in education, reduce school dropout rates, and recoup the learning loss impeded during the pandemic," it says.
The local-foreign joint survey says it is high time for the government to emphasis widening the tax net and restructuring the existing tax frame. "The government must undertake more active labour-market policies to reduce the unemployment rate among men, youth, and permanent returnee migrant workers."
And, finally, it suggests that the government undertake alternative and complementary policies to reduce household inflationary pressures.
bikashju@gmail.com