Economic growth and poverty level
Saturday, 15 November 2008
A report, titled, 'Human Development in South Asia: A Ten-Year Review' published the other day, marking the 10th anniversary of the first South Asia Human Development Report, presented a grim picture of poverty in South Asia. It said the total number of people living in poverty has not gone down in South Asia despite an impressive economic growth that the region attained during the past decade. The report, prepared by the Mahbub ul Haq Human Development Centre (MHHDC) has not portrayed any happy picture either, as far as Bangladesh is concerned. It has recognised Bangladesh's achievements such as consistent economic growth, rapid human development and rise in per capita income in recent years but listed high poverty levels, rising income inequality, widespread underemployment and inadequate social sector expenditures as serious challenges to the task of achieving its socio-economic goals. Even halving of the number of poor by 2015, in line with UN Millennium Development Goals (MDGs) would keep 47 million people below the poverty in the country, the report forecasts.
What has been described by the MHHDC report is nothing but the stark reality prevailing in the entire South Asian region. If the case of India is taken, it is noteworthy that it has consistently recorded an 8.0 to 9.0 per cent economic growth rate over the last few years and emerged as one of the leading economies in Asia. Until the recent global financial tsunami, investors from the developed countries invested billions of dollars in portfolios and other areas in the Indian economy. That prompted many to phrase 'shiny India'. But in most part of rural India, the poverty is still is as harsh as it was before. About 1000 farmers hit by crop failure and debt commit suicide every month in that country.
Meanwhile, the household expenditure surveys conducted by the Bangladesh Bureau of Statistics (BBS) have shown some improvements in the poverty situation in Bangladesh over the last one and a half decades or more. Thus, there was 1.0 per cent annual average decline in poverty between 1990 and 2000 in Bangladesh. The rate increased to nearly 1.8 per cent between 2001 and 2005. However, research studies have simultaneously noted with concern the worsening conditions about income distribution throughout this period in Bangladesh. The related income inequality rose during the period under report and does, as all the available updated data indicate, continue to rise. There was a reverse trend in poverty situation, in general, in the last financial year when food prices went up abnormally following the loss of food crops due to natural calamities and other exogenous factors. In spite of a better food harvest last season and the recent decline in prices of food items in the global market, the price level of most food items has remained almost unchanged. The rate of unemployment and underemployment is sill high and the prospects for improving the situation in the short- and medium-terms do not appear that bright because of both unfavourable domestic as well as international economic factors.
A sizeable amount of government fund is spent on the poor every year under the 'safety net' programmes. The bilateral and multilateral donors are otherwise generous about supporting such programmes. But these cannot even ensure the bare minimum requirements for a living. Neither are such schemes designed, deliberately or otherwise, to help the poor come out of poverty-trap. What the poor need is employment. But the malfunctioning institutions, persisting governance problems, too inadequate infrastructural support facilities, inefficient use of available resources etc., have all combined to affect adversely the level and quality of investment. As a result, the goals of providing the poor with jobs and helping them come out of abject poverty remain as elusive as ever. However, the task about poverty alleviation will in no way become easier for the future elected government, in the absence of firm policy-actions to help address the related problems expeditiously and effectively. There lies the main challenge to Bangladesh's efforts for alleviating its poverty.
What has been described by the MHHDC report is nothing but the stark reality prevailing in the entire South Asian region. If the case of India is taken, it is noteworthy that it has consistently recorded an 8.0 to 9.0 per cent economic growth rate over the last few years and emerged as one of the leading economies in Asia. Until the recent global financial tsunami, investors from the developed countries invested billions of dollars in portfolios and other areas in the Indian economy. That prompted many to phrase 'shiny India'. But in most part of rural India, the poverty is still is as harsh as it was before. About 1000 farmers hit by crop failure and debt commit suicide every month in that country.
Meanwhile, the household expenditure surveys conducted by the Bangladesh Bureau of Statistics (BBS) have shown some improvements in the poverty situation in Bangladesh over the last one and a half decades or more. Thus, there was 1.0 per cent annual average decline in poverty between 1990 and 2000 in Bangladesh. The rate increased to nearly 1.8 per cent between 2001 and 2005. However, research studies have simultaneously noted with concern the worsening conditions about income distribution throughout this period in Bangladesh. The related income inequality rose during the period under report and does, as all the available updated data indicate, continue to rise. There was a reverse trend in poverty situation, in general, in the last financial year when food prices went up abnormally following the loss of food crops due to natural calamities and other exogenous factors. In spite of a better food harvest last season and the recent decline in prices of food items in the global market, the price level of most food items has remained almost unchanged. The rate of unemployment and underemployment is sill high and the prospects for improving the situation in the short- and medium-terms do not appear that bright because of both unfavourable domestic as well as international economic factors.
A sizeable amount of government fund is spent on the poor every year under the 'safety net' programmes. The bilateral and multilateral donors are otherwise generous about supporting such programmes. But these cannot even ensure the bare minimum requirements for a living. Neither are such schemes designed, deliberately or otherwise, to help the poor come out of poverty-trap. What the poor need is employment. But the malfunctioning institutions, persisting governance problems, too inadequate infrastructural support facilities, inefficient use of available resources etc., have all combined to affect adversely the level and quality of investment. As a result, the goals of providing the poor with jobs and helping them come out of abject poverty remain as elusive as ever. However, the task about poverty alleviation will in no way become easier for the future elected government, in the absence of firm policy-actions to help address the related problems expeditiously and effectively. There lies the main challenge to Bangladesh's efforts for alleviating its poverty.