Strategies for poverty reduction
Thursday, 20 December 2007
Syed Ashraful Hasan
A non-governmental organisation (NGO) released to the press sometime ago its findings about the progress of poverty reduction in the country . The same mainly underscored that the rate of reduction of poverty is not good enough and at the current rate it would take some 81 years for Bangladesh to eradicate poverty. Further, at the present rate of progress against poverty, the target of reducing poverty in this country by half by 2015 in line with the UN's millennium development goals (MDGs) will also not be realised . It would take nearly 24 years to reach the MDG target, according to the research findings.
None can absolutely certify the credibility of this NGO's research into the poverty situation in Bangladesh. But even by official admission, poverty remains formidable in Bangladesh with some 45 per cent of its people or nearly 60 million of them having an existence below the poverty line. The number of people in extreme poverty in the population is assessed to be some 34 per cent. Therefore, there is no reason to be complacent about the poverty situation from a thinking that poverty is receding fast and would sharply come down further in the near future. Clearly, much stepped-up activities under carefully conceived policies or strategies are necessary to score substantial success against poverty at a faster rate.
Whatever the future strategies to be followed to curb poverty, there can be no disputing it that the best antidote to poverty in most situations is economic growth. Economic growth creates new jobs, incomes and economic opportunities that have an automatic snowballing effect in reducing poverty. But the vital investment climate in Bangladesh, the precondition for economic growth, needs to be improved to that end. The factors negatively influencing the investment climate needs identification and decisively acting upon to improve the investment environment and set the stage for higher economic growth. The growth needs to be at least eight per cent or higher on annual and regular basis to make a sustainable dent in the poverty situation. Government should address effectively each of the issues which are presently affecting economic growth in a negative way.
Investments in prospective fields, especially in the export-oriented information technology and agro-products, remain below the desired mark as the intending entrepreneurs in these and other fields feel at a disadvantage from a lack of appropriate or up-to-date infrastructures. The removal of these infrastructural bottlenecks, therefore, could contribute much to brightening up the investment climate. Government should provide real encouragement to entrepreneurial activities of a varied nature through the application of appropriate fiscal and monetary policies. The fiscal polices need to aim at lowering all kinds of taxes and duties while the monetary polices should seek to make the costs of borrowing funds lesser for the entrepreneurs by reducing the rates of interest on loans.
Smuggling is a major constraint for the economy. Many local industries are being stifled by smuggling and the establishment of new ones that could significantly create jobs and incomes are similarly discouraged by smuggling. The government must try a lot harder to control smuggling with law enforcement activities. It also needs to think up bright new fiscal policies as deterrents to smuggling.
A major goal of the anti-poverty programmes ought to be sustainable improvements in the conditions of the poor. The ones who achieve some success in reducing their poverty must be prevented from sliding back again into poverty through creation of adequate safety nets. Farmers are expected to often start from scratch after natural disasters with their own resources. The risks from disasters can be hedged considerably by introducing insurance activities on a large scale in the rural areas to cover different types of risks. Institutional mechanisms to ensure fair prices to producers of primary produce round the year, improved marketing facilities for their produce, increase of institutional credit facilities among the poor, prohibiting distress sale of land and other assets at gross undervalue, etc., can also contribute in a significant way towards poverty reduction.
A non-governmental organisation (NGO) released to the press sometime ago its findings about the progress of poverty reduction in the country . The same mainly underscored that the rate of reduction of poverty is not good enough and at the current rate it would take some 81 years for Bangladesh to eradicate poverty. Further, at the present rate of progress against poverty, the target of reducing poverty in this country by half by 2015 in line with the UN's millennium development goals (MDGs) will also not be realised . It would take nearly 24 years to reach the MDG target, according to the research findings.
None can absolutely certify the credibility of this NGO's research into the poverty situation in Bangladesh. But even by official admission, poverty remains formidable in Bangladesh with some 45 per cent of its people or nearly 60 million of them having an existence below the poverty line. The number of people in extreme poverty in the population is assessed to be some 34 per cent. Therefore, there is no reason to be complacent about the poverty situation from a thinking that poverty is receding fast and would sharply come down further in the near future. Clearly, much stepped-up activities under carefully conceived policies or strategies are necessary to score substantial success against poverty at a faster rate.
Whatever the future strategies to be followed to curb poverty, there can be no disputing it that the best antidote to poverty in most situations is economic growth. Economic growth creates new jobs, incomes and economic opportunities that have an automatic snowballing effect in reducing poverty. But the vital investment climate in Bangladesh, the precondition for economic growth, needs to be improved to that end. The factors negatively influencing the investment climate needs identification and decisively acting upon to improve the investment environment and set the stage for higher economic growth. The growth needs to be at least eight per cent or higher on annual and regular basis to make a sustainable dent in the poverty situation. Government should address effectively each of the issues which are presently affecting economic growth in a negative way.
Investments in prospective fields, especially in the export-oriented information technology and agro-products, remain below the desired mark as the intending entrepreneurs in these and other fields feel at a disadvantage from a lack of appropriate or up-to-date infrastructures. The removal of these infrastructural bottlenecks, therefore, could contribute much to brightening up the investment climate. Government should provide real encouragement to entrepreneurial activities of a varied nature through the application of appropriate fiscal and monetary policies. The fiscal polices need to aim at lowering all kinds of taxes and duties while the monetary polices should seek to make the costs of borrowing funds lesser for the entrepreneurs by reducing the rates of interest on loans.
Smuggling is a major constraint for the economy. Many local industries are being stifled by smuggling and the establishment of new ones that could significantly create jobs and incomes are similarly discouraged by smuggling. The government must try a lot harder to control smuggling with law enforcement activities. It also needs to think up bright new fiscal policies as deterrents to smuggling.
A major goal of the anti-poverty programmes ought to be sustainable improvements in the conditions of the poor. The ones who achieve some success in reducing their poverty must be prevented from sliding back again into poverty through creation of adequate safety nets. Farmers are expected to often start from scratch after natural disasters with their own resources. The risks from disasters can be hedged considerably by introducing insurance activities on a large scale in the rural areas to cover different types of risks. Institutional mechanisms to ensure fair prices to producers of primary produce round the year, improved marketing facilities for their produce, increase of institutional credit facilities among the poor, prohibiting distress sale of land and other assets at gross undervalue, etc., can also contribute in a significant way towards poverty reduction.