The positive gains in the country's poverty reduction efforts have now been reversed due to high food prices and soaring inflation, said government and private research agencies.
They said poverty eradication process has been seriously affected due to abnormal hike in prices of food grains, both locally and internationally. It has undermined the achievement made in poverty reduction since early 1990s.
The government and private research agencies have been conducting several studies to find out the actual number of people falling below the poverty line due to soaring food prices.
The Bangladesh Institute of Development Studies (BIDS) has pointed out that poverty reduction effort of government is at great risk. The Bangladesh Bureau of Statistics (BBS) data shows that around 40 per cent people were living below poverty line in 2005.
According to a recent CPD estimate, the gross income of the poor people decreased by 36.7 per cent between January 2007 and March 2008 mainly due to price hike of food and inflationary pressure. Because of such income erosion, an additional 8.5 per cent or 2.5 million households have fallen below the poverty line during the last 15-month period.
The Bangladesh Bank (BB) in an internal survey carried out recently has found that rate of people living below poverty line increased by 3.0 per cent, which was 40 per cent earlier.
The empirical exercise carried out by the BB said that the higher inflation rate of the poor in recent years has mainly arisen from higher food prices, which have larger weights in the consumption basket of the poor.
A private research agency, Unnayan Samunnay, has claimed that around 6.2 million new people have fallen below poverty line in the last one year. Number of people living below poverty line rose to 45.86 per cent showing 4.5 per cent increase, it said.
Talking to the FE, BIDS director general Quazi Shahabuddin said: "There has been considerable erosion of purchasing power of the poor who spend more than 60 per cent of their income on food."
He said: "This has obviously put them at greater risk of hunger and malnutrition, thereby undermining the gains made in poverty reduction in recent years."
"In fact, this may even reverse the trend of poverty reduction unless effective and coherent actions are taken to assist the vulnerable population to help meet their rising food bills."
BBS director general (DG) AYM Ekramul Huq said: "There has been no survey on poverty eradication since 2005. So, statistically, it is difficult to say the exact number of new people falling under the poverty line."
The BBS will conduct a new study on poverty in 2009, he said adding that it is clear that inflation suppresses real income of the people, which, in turn, increases poverty rates.
The BIDS said the incidence of poverty started to decline in the early 1990s, when rate of inflation was substantially lower.
"Although there is no systematic analysis of the relationship between inflation and poverty rates in the context of Bangladesh, a causal look at the historical data shows that the overall poverty was higher during the period of rapid inflation, particularly in the 1970s and 1980s," the BIDS DG said.
Poor at great risk because of high food inflation
Doulot Akter Mala | Published: July 31, 2008 00:00:00 | Updated: February 01, 2018 00:00:00
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