BD poverty rate set to drop as economy crosses $400b mark

The Bangladesh's economy expanded substantially to US$ 419.2 billion, in terms of purchasing power parity (PPP), in the fiscal year 2012-13, according to the latest estimate released last month by the International Comparison Programme (ICP) -2011 of the World Bank.
The country's gross domestic product (GDP) was $173.8 billion based on PPP, an estimate of the real living costs, under the same programme carried out in 2005.
The per capita income also rose to $2800 in the FY 2012-13 on PPP exchange rate against $1268 studied in 2005.
The Manila-based Asian Development Bank (ADB) conducted the ICP survey for the Asia and the Pacific region.
Hong Kong is the reference country in the region.
The latest findings from the ICP could fuel a debate on the country's poverty level.
It is believed that Bangladesh's poverty level would go down significantly after the new estimate.
Dr. Zahid Hussain, lead economist at the Dhaka office of the World Bank (WB) said the Bretton Woods institution would review the poverty line benchmark of $1.25 a day after revision of all economies under the latest ICP.
He said the WB has already started reviewing its benchmark poverty line.
He added that the existing benchmark $1.25 is an average of 15 poor countries measured in 2008. The bank's poverty line was introduced at $1.01 in 1990, based on 1985 PPP figures. The WB increased it to $1.25 in 2008.
Dr Hussain said the real income of the poor had not grown as the price level had remained still high at the 2008 level.
Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI) said the country's poverty should see a drop after the latest estimate.
He said the WB would review its poverty line following the latest data. "In my view, the poverty level will drop as Bangladesh's economy has been growing on an average 6.0 per cent."
He said the Bangladesh economy has been growing on an average 6.0 per cent with its population growth rate remaining almost stable, at just more than 1.0 per cent.
The ICP programme is the largest global statistical operation, covering 199 economies from eight regions. Bangladesh Bureau of Statistics (BBS) has represented Bangladesh.
The ICP is important as the economies estimate their GDPs at national price levels, and in national currencies. So, it is hard to compare GDPs of different countries.
The main objective of the ICP is to provide comparable data on GDP and its components.
It specifically aims to provide estimates of PPPs of currencies of the participating economies for the measurement and comparison of price levels, and the volume or real GDP and its major aggregates.
The PPP of the currency of an economy is defined as the number of currency units required to purchase a basket of goods and services that can be purchased with one unit of the currency of a reference or base country.
For example, in Asia and the Pacific, Hong Kong dollar (HK$) is selected as the reference or base economy currency, into which expenditures in all the other economies are converted.
Suppose a basket of goods and services costs HK$ 100 to purchase in Hong Kong, China. It will cost nearly 50 HK$ to buy the same in Bangladesh.
The new PPP numbers, based on 2011 data, include sharp upward revisions of the per capita incomes in big emerging economies such as China and India, making them statistically less poor than previously thought.
Economists at both the Washington-based Centre for Global Development and the Brookings Institution found that based on the new data, the number of people under the existing $1.25 a-day-poverty-line had fallen from almost 20 per cent of the developing world's population to fewer than 9.0 per cent, according to Financial Times (FT).