ABSTRACT

The level of poverty in Bangladesh is one of the highest in the world. Millions of people
suffer from the hardship of poverty. Moreover, inequality afflicts the persistence of poverty.
Poverty level of Rangpur and Rajshahi division is more than the other divisions. Therefore,
this study has analyzed the poverty level of Bangladesh and focused various issues. Analyze
the nature, extent and trends in growth, poverty and income inequality in Bangladesh.
Document and examine relationship between economic growth, development disparity,
income inequality and poverty in Bangladesh provide some policy suggestions to foster
growth, reduces development disparity, income inequality and poverty in Bangladesh to
achieve sustainable development. This paper is also focused on to decompose inequality and
poverty by rural, urban and national level households. The study is based on the analysis of
secondary information which has been collected from different sources. Since 1991-92, the
incidence of poverty has decreased to 31.5 percent in 2010 from 56.7 percent in 1992. From
the study, it is evident that the incidence of poverty is higher in Rangpur and Rajshahi
division than that of the other areas. The analysis shows a clear picture of the current trend of
poverty and inequality in Bangladesh.

Keywords: poverty, economic growth, development disparity, income inequality

INTRODUCTION

The incidence of poverty in Bangladesh is one of the highest in the world. Millions of people
here are suffering from the imprecation of poverty. Bangladesh has been stereotyped as the
archetypical theater of poverty and it was a subject of interest during the British colonial
period (Jack, 1976; Siddqui, 1982). After that, it began to attract the attention of researchers
after the famine of 1974 and the decade saw a number of studies mainly devoted to counting
up the poor (Islam, 2010). Reduction of poverty is a fundamental challenge for Bangladesh.
Although, Bangladesh has gained important achievements in fighting against poverty since
the early 1990s but there is no room for complacency is there. The incidence of poverty in
Bangladesh is one of the highest in the world. Millions of people are suffering from the
hardship of poverty on the occasion (Titumir and Rahman, 2011). About one-third (31.5
percent) of its population is still living below the so-called poverty line (BBS, 2010). In this
context, likewise many other countries, poverty is still a vital concern and challenge as well
for Bangladesh. Bangladesh has made commendable progress in respect of eradication of
poverty and hunger. It has sustained a GDP growth rate of 6 percent or above in recent years
that has played a positive role in eradicating poverty. The robust growth has been
accompanied by corresponding improvements in several social indicators such as increased
life expectancy and lower fertility rate despite having one of the world's highest population
densities. This impressive performance is the result of persuasion of pro-poor and inclusive
growth strategy. Inclusive growth has resulted in impressive poverty reduction from 56.7
percent in 1991-92 to 31.5 percent in 2010; the rate of reduction being faster in the present
decade than the earlier ones. The latest HIES 2010 data show that the incidence of poverty
has declined by an average 1.74 percentage points in Bangladesh during 2000 to 2010 against
the MDG target of 1.20 percentage points. The poverty headcount ratio for 2015 is estimated
to be 24.8 percent. Economic growth, employment and wages are three fundamental factors
that helped reducing poverty in Bangladesh. Government policy directed towards economic
growth, creation of employment and improving wages play a crucial role in reducing poverty.
Among these policies, government expenditures on education, health, infrastructure, and
agricultural development have been most instrumental.

Literature Review

Zohir (2011) states that the issue of regional differences was overshadowed by geographical
targeting of the poor and more recent focus on Monga- affected people in the north- west.
Thus, pockets of high ecological vulnerability (including river erosion) and higher incidence
of poverty were identified- largely following exercises based on Household Income
Expenditure Survey(HIES) data, and fine- tuned further with „small area‟ poverty mapping
under the initiative of the World Food Programme (WFP).

Sen (2005) attempted to explain the variations of growth. The analysis included such factors
as human capital (literacy rates), gender inequality and initial level of expenditure and
asset inequality. Multivariate analysis in Sen (2005) points to the importance of such factors
as human capital, agriculture technology, urban dynamism and inequality.

Deb et al (2008) conclude that regional inequality is a growing concern in Bangladesh.

Bangladesh during pre- independence period experienced serious regional inequality. They
find two results: (i) higher the level of initial income, higher the level of current per
capita income and higher the GDP growth, higher the per capita income in the district; and
(ii) proportion of landless household had a significant negative effect on per capita income
level. If proportion of landless is viewed as an outcome, no new knowledge is derived from
the exercise.
The World Bank report ( WB 2008), with the sub-title, “Creating Opportunities and Bridging
the East- West Divide”, deserves more critical examination due to its apparent rigor and
extensive use of HIES data converging to a strong assertion on “regional disparity”.

Zaman, Narayan and Kotikula (2012) narrowing the economic gap between the growing and
lagging regions of the country would require interventions to improve endowments and
returns to the endowments in the lagging parts of the country. To raise returns to
endowments, improving the investment climate for non-farm enterprises in lagging regions
would be crucial. This would require improving infrastructure including roads and
electricity, improve links to markets, and more broadly, improve the links between the
isolated parts of the country (primarily in the west and southwest) to the urban growth
centers that are mainly in the east.

Rahman (2009) discusses regional difference in wage and poverty. Drawing upon unit wages
separately calculated from HIES 2000 and HIES 2005, the paper shows that wages had
increased substantially in Khulna and had declined in Dhaka division, which is not consistent
with the poverty trends in the two divisions. Unfortunately the paper does not attempt an
explanation – instead, it presents regression estimates of wage equations from two separate
exercises with 2000 and 2006 LFS data. Interestingly, estimate of the dummy for Khulna
division, showing the scalar difference between wage rates in Khulna and Dhaka divisions,
declined significantly over the two LFS years. Rahman (2009) failed to take into cognizance
of this inconsistency in her findings as well as the fact that the sampled PSUs (and Upazilas)
varied between the two survey years.

Key Definitions:

Poverty:

There is no one single definition of poverty. One figure which has been suggested is that an
income of half the national average indicates poverty.

According to World Bank

“The most commonly used way to measure poverty is based on incomes. A person is
considered poor if his or her income level falls below some minimum level necessary to meet
basic needs. This minimum level is usually called the "poverty line". What is necessary to
satisfy basic needs varies across time and societies. Therefore, poverty lines vary in time and
place, and each country uses lines which are appropriate to its level of development, societal
norms and values.” According to United Nations,

“Fundamentally, poverty is the inability of getting choices and opportunities, a violation of

human dignity. It means lack of basic capacity to participate effectively in society. It means
not having enough to feed and clothe a family, not having a school or clinic to go to, not
having the land on which to grow one‟s food or a job to earn one‟s living, not having access
to credit. It means insecurity, powerlessness and exclusion of individuals, households and
communities. It means susceptibility to violence, and it often implies living in marginal or
fragile environments, without access to clean water or sanitation.”

In a word, poverty is a Condition where people's basic needs for food, clothing, and shelter
are not being met.

Poverty is generally of two types: (1) Absolute poverty is synonymous with destitution and
occurs when people cannot obtain adequate resources (measured in terms of calories or
nutrition) to support a minimum level of physical health. Absolute poverty means about the
same everywhere, and can be eradicated as demonstrated by some countries.

(2) Relative poverty occurs when people do not enjoy a certain minimum level of living
standards as determined by a government (and enjoyed by the bulk of the population) that
vary from country to country, sometimes within the same country.

Economic Growth:

Economic growth is an increase in the capacity of an economy to produce goods and services,
compared from one period of time to another. Economic growth can be measured in nominal
terms, which include inflation, or in real terms, which are adjusted for inflation. For
comparing one country's economic growth to another, GDP or GNP per capita should be used
as these take into account population differences between countries.

Economic growth is usually associated with technological changes. An example is a large

growth in the U.S. economy during the introduction of the Internet and the technology that it
brought to U.S. industry as a whole. The growth of an economy is thought of not only as an
increase in productive capacity but also as an improvement in the quality of life for the
people of that economy.
Why Poverty Reducing at a Slower Rate?

Although the government has taken several initiatives for alleviating poverty, yet the poverty
persists. This is mainly due to the problems associated with the neo-liberal paradigm that the
successive governments are pursuing in reducing poverty including those of the poverty
reduction strategies (PRS).

The problem arises in its failing to conceptualize that poverty is manifestation of social
property relationship. The rate of decline in poverty is accelerated or decelerated, depending
upon the social property relations, rather than the neo-liberal articulation that an increase in
the size of the “things-basket” reduces poverty. This happens as this “things-basket” operates
under particular social relationships. The “things-basket” may reduce poverty up to a point,
but it is reproduced due to social property relationship, embedded through institutions,
structures, power, and reality and composition of the state.

In instrumental sense, the major reasons for persistence of poverty are: absence of adequate
state intervention for the expansion of production, deficiency of equalizing income
augmenting employment system, shortfalls in public expenditure for capabilities
enhancements, inadequacies in regulatory regimes, and lack of complementary policy
structure and non-existence of enforceability of constitutional rights.

Social Relationship: Poverty is a part of social relationship. The poor are remaining poor
due to the structural reasons. Even reduction in income poverty has a limit, as it is contingent
upon the structure.

Intervention of State in Enhancing Productive Capacity: The neo-liberal paradigm

reduces the capacity of state through liberalization, deregulation and privatization, assuming
that market will deliver the results. This further assumes that a part of the population will
plunge into the poverty and they will be addressed through social safety nets. The failing of
the paradigm is not to take cognizance of the endemic market failures and the need for the
state to intervene with strategies, policies and incentives to enhance the productive capacity
to ensure full employment, particularly addressing the disguised unemployment.
Deficiency of equalizing income augmenting employment system: The growth process in
Bangladesh has not been matched with increases in jobs. Moreover, the people have entered
into labor market with wages below the poverty, creating a huge amount of people, who can
be termed as “working poor.” Furthermore, a huge chunk of employed population is under-
employed. These have also resulted in augmentation of income inequality.

Shortfalls in public expenditure for capabilities enhancements: The public expenditure in

capabilities has always been less than the required level. This is particularly witnessed when
the budget deficits soar up. The public expenditure in education, health and housing has a
bearing on the poverty.

Inadequacies in regulatory regimes: The system of accumulation in Bangladesh is

principally primitive in nature. Such accumulation is omnipresent, particularly in case of
natural resources, management of common property resources, and management of state
resources. The bias created in favor of rich and powerful could be lessened by regulatory
regimes, giving access to and control over, such resources to the poor. Absence of dynamic
policies, planning and activities (regulatory problem) of the governments might create
poverty as well as lowering income.

Complementarity Problem: Poverty may also increase due to the lack of maintaining
complementarity in policies and implementation. There are many such examples of lack of
complementarity. For example, the tax system of the country is regressive and bias in favour
of rich as the government continues to enhance the tax such as VAT while there is hardly any
concerted efforts in increasing income tax net and reduction in tax evasion and avoidance of
corporate houses. While the inflation is cropping up, there are not adequate policies to offset
the income erosion of the poor.

Ensuring Constitutional Obligation: The Constitution of the country pledges to ensure

basic necessities to its citizens by the state. Since these rights are not legally enforceable, the
state as a duty bearer to the rights holders could not be operationalized.

Expanding population: Excessively high population densities put stress on available

resources. However, the bulk of the population are of working age. The country has not been
able to come up with plans to benefit out of population dividend.

Environmental Degradation: Environmental degradation — the deterioration of the natural

environment, including the atmosphere, bodies of water, soil, and forests — is an important
cause of poverty. Environmental problems have led to shortages of food, clean water,
materials for shelter, and other essential resources.

Rural and urban poverty

The World Bank announced in June 2013 that Bangladesh had reduced the number of people
living in poverty from 63 million in 2000 to 46 million in 2010, despite a total population that
had grown to approximately 150 million. This means that Bangladesh will reach its first
United Nations-established Millennium Development Goal, that of poverty reduction, two
years ahead of the 2015 deadline. Bangladesh is also making progress in reducing its poverty
rate & there is big chance of overcoming extreme poverty rate by 2030 according to the
World Bank.

Since the 1990s, there has been a declining trend of poverty by 1 percent each year, with the
help of international assistance. According to the 2010 household survey by the Bangladesh
Bureau of Statistics, 17.6 percent of the population were found to be under the poverty line.

The population in Bangladesh is predominantly rural, with almost 80 percent of the

population living in rural areas. Many people live in remote areas that lack services such as
education, health clinics, and adequate roads, particularly road links to markets. An estimated
35 percent of the population in rural areas lives below the poverty line. [9] They suffer from
persistent food insecurity, own no land and assets, are often uneducated, and may also suffer
serious illnesses or disabilities. Another 29 percent of the rural population is considered
moderately poor. Though they may own a small plot of land and some livestock and generally
have enough to eat, their diets lack nutritional value. As a result of health problems or natural
disasters, they are at risk of sliding deeper into poverty. Women are among the poorest of the
rural poor, especially when they are the sole heads of their households. They suffer from
discrimination and have few earning opportunities, and their nutritional intake is often
inadequate.

An estimated 21 percent of the population in urban areas lives below the poverty line. People
living in urban areas, like Sylhet, Dhaka, Chittagong, Khulna, and Rajshahi, enjoy a better
standard of living, with electricity, gas, and clean water supplies. Even in the major cities,
however, "a significant proportion of Bangladeshis live in squalor in dwellings that fall apart
during the monsoon season and have no regular electricity. These Bangladeshis have limited
access to health care and to clean drinking water.

In April 2016, the Asian Development Bank estimated of the 157.90 million people living in
Bangladesh, 31.5% live below the national poverty line.

Causes of rural and urban poverty

One of the main causes of poverty are endemic corruption and an incompetent government
that does little to build infrastructure and good law. One of the main causes of rural poverty is
due the country’s geographical and demographic characteristics. A large proportion of the
country is low-lying, and thus is at a high risk to flooding. Many of the rural poor live in
areas that are prone to extreme annual flooding which cause huge damage to their crops,
homes and livelihoods. To rebuild their homes, they often have to resort to moneylenders, and
that causes them to fall deeper into poverty. In addition, these natural disasters also cause
outbreaks of cholera and other waterborne and diarrheal diseases such as dengue and malaria
which will affect them physically and lower their productivity levels.

Another cause of rural poverty is due to the fast-growing population rate. It places huge
pressure on the environment, causing problems such as erosion and flooding, which in turn
leads to low agricultural productivity.

The causes of urban poverty are due to the limited employment opportunities, degraded
environment, and bad housing and sanitation. The urban poor hold jobs that are labor
demanding, thus affecting their health conditions. Therefore, the urban poor are in a difficult
situation to escape poverty.

Environmental problems and poverty

With 80% of the country situated on the flood plains of the Ganges, Brahmaputra, Meghna
and those of several other minor rivers, the country is prone to severe flooding.

While some flooding is beneficial to agriculture, high levels of flooding have been found to
be a retardant on agricultural growth. On average, 16% of household income per year is lost
due to flooding, with roughly 89% of the loss in property and assets. Of these, households
engaged in farming and fishing suffer a greater loss relative to income.

A positive relationship exists between flood risk and poverty as measured by household
income, with people living under the poverty threshold facing a higher risk of flooding, as
measured by their proximity to rivers and flood depth. Property prices also tend to be lower
the higher the risk of flooding, making it more likely that someone who lives in a flood-prone
area is poor and vice versa, as they might not be able to afford safer accommodation. Also,
they tend to depend solely or largely on crop cultivation and fisheries for their livelihood and
thus are harder hit by floods relative to their income.

Important to the finances of farmers operating small farms is their self-sufficiency in rice and
floods adversely affect this factor, destroying harvests and arable land. Farmers hit are often
forced to undertake distressed land selling and in doing so, risk being pushed into or deeper
into poverty. In areas hard hit by floods, especially disaster floods such as the 1988 flood,
several researchers have found that many of the affected households have resorted to selling
off assets such as land and livestock to mitigate losses.

Also, in an area hard-hit by poverty and prone to floods, it was found that many of the poor
were unwilling to pay for flood protection. The main reason cited had been lack of financial
resources although it was found that many of these people are willing to substitute non-
financial means of payment such as labor, harvest or part of their land.

The above is problematic as it creates a vicious cycle for the poor of Bangladesh. Because the
poor may not be able to afford safer housing, they have to live near the river which raises
their risk of flooding. This would result in greater damage suffered from the floods, driving
the poor into selling assets and pushing them further into poverty. They would be further
deprived of sufficient resources needed to prevent extensive damage from flooding, resulting
in even more flood damage and poverty. It then becomes even harder to escape this cycle.
Even those farmers slightly above the poverty line are but just one bad flood away from the
ranks of the poor.

Implications of poverty in Bangladesh

The Gross national income (GNI) per capita measured in 2008 prices is a staggering low of
US$520 while GNI Purchasing Power Parity per capita is US$1440 (2008).This is a dismal
figure when compared to other developed economies. Even though the poverty rate in
Bangladesh has been decreasing, it is doing so at a slow rate of less than 2% per year. 49% of
the population still remains below the poverty line. Poverty matters because it affects many
factors of growth – education, population growth rates, health of the workforce and public
policy. Poverty is most concentrated in the rural areas of Bangladesh, hence creating
disparities between the rural and urban areas. However, urban poverty remains a problem too.

In particular, poverty has been linked strongly to education and employment. Research papers
published by the Bangladesh Institute of Development Studies (BIDS) have shown that
poverty acts as both a cause and effect of a lack of education, which in turn adversely affects
employment opportunities. Having an unskilled workforce also greatly decreases the
productivity of the workforce which decreases the appeal of Foreign Direct Investments
(FDIs) and thus impedes sustainable economic growth. In essence, education is an important
contribution to the social and economic development of a country.

Secondly, rising landlessness is also a consequence of poverty in Bangladesh. In the year

2000, among the poorest of the poor – the poorest 20 percent of the population – four out of
five owned less than half an acre of land. Not only did many own no acreage at all, but
landlessness has been increasing in rural Bangladesh along with the number of small and
marginal farms. The 2000 HIES found nearly half (48 percent) of the country’s rural
population to be effectively landless, owning at most 0.05 acres. Roughly three-fifths of all
households in the two poorest quintiles fell into that category.

Lastly, for the chronic poor, issues such as food security and health hamper social mobility.
According to a study done by the World Bank on Dhaka, the poor suffers from a lack of
proper healthcare in their areas due to the expensive and poor quality health care services.
The poverty stricken areas either do not have the available facilities, or can only afford low
quality healthcare. This is a problem that is common in both the rural and urban poor. For the
urban poor, the problem has worsened as they can only afford to stay in slums where there are
problems of overcrowding and unhygienic living conditions. These two factors results in the
spread of diseases amongst the poor whom cannot afford better healthcare. Also, one cannot
deny that a healthy and well-fed citizen is better suited for increased productivity as part of
the workforce. Thus, poverty matters because it affects the social welfare of citizens.
Objective of the Study

Thus the objective of this paper is to analyze the nature and the level of poverty in
Bangladesh and to some policy, suggestions reducing poverty level and disparities in
Bangladesh.

Relevance of the Study to National Development

Economic growth in Bangladesh in the last one and a half decades or so has no doubt
improved the living standard of the population across the country. Analysis of poverty level
has shown a consistent decline in poverty incidence, especially in rural areas. Bangladesh has
enjoyed a credible record of sustained growth within a stable macroeconomic framework in
recent years. Thus study of poverty level of Bangladesh is very important for the national
development context. This study can give suggestion that what should be the government
steps to reduce poverty level in Bangladesh. The study is also important for national
development because it will show the regional disparity among several divisions of
Bangladesh.

Methodology

This paper involved analysis of secondary information collected from different sources and
analysis of published results and reports on poverty in Bangladesh. The study is
prepared mainly based on the data of household income and expenditure survey (HIES) of
2000, 2005 and 2010 conducted by the Bangladesh bureau of statistics (BBS), World Bank
data, world development reports, reports of WFP.A good number of pertinent journals,
different statistical reports, periodicals, bulletins, books of abstracts, etc. were searched
and reviewed for collecting relevant information.

In this study, analysis has been carried out the basis of available secondary literature
and data. Important sources include secondary data in form of official statistical information
collected from the Bangladesh Bank, Bureau of Manpower, Employment and Training
(BMET), International Migration Report of IOM, World Bank Report, IMF Report, ADB
Report, Journals etc.

Trends of Poverty in Bangladesh

Bangladesh has been successful in achieving significant reduction in poverty since 1990. But
the commendable performance in terms of poverty reduction at the national level has
not been equally shared among its different components at the sub-national level. This is
evident that the pace of poverty reduction differed among different divisions.

Table 1: Incidence of Poverty (Head Count Rate, using upper poverty line) by Divisions,
1995- 96 to 2010

Division 2010 2005 2000 1995-96

National 31.5 40.00 48.9 53.1
Barisal 39.4 52.00 53.1 59.9
Chittagong 26.2 34.00 45.7 44.9
Dhaka 30.5 32.00 46.7 52.00
Khulna 32.1 45.7 45.1 51.7
Rajshahi 29.8 51.2 56.7 62.2
Rangpur 46.2 - - -
Sylhet 28.1 33.8 42.4 -
Source: BBS, HIES Reports (1995- 96, 2000, 2005 and 2010)

From Table-1, the estimate of HCR of poverty by divisions using the upper poverty line in
2010 reveal that Rangpur division has the highest incidence of poverty (HCR) at 46.2
percent, followed by Barisal division 38.4 percent and Khulna division 32.1 percent. On the
other hand, Chittagong division has the lowest HCR of incidence of poverty at 26.2
percent followed by Sylhet division at 28.1 percent and Rajshahi division at 29.8 percent.

Between 2005 and 2000, the poverty headcount rates fell less rapidly for the
divisions of Barisal, Khulna and Rajshahi and in some categories, these rates even increased.
This is in sharp contrast to the case of other three divisions, namely, Dhaka, Chittagong and
Sylhet, which have experienced faster poverty reduction. Among all the divisions the poverty
rate is highest (46.2percent) in Rangpur division. The trend in poverty reduction rates
between 2005 and 2010suggests that regional disparity observed in previous household
surveys with respect to headcount poverty has narrowed significantly.

A conventional way to measure poverty is to establish a poverty line, defined as the

threshold level of income needed to satisfy basic minimum food and non- food requirements
and determine the number of households (People) below that line as a percent of the
total households (Population). This Head- count Index (HDI) is a measure of the
incidence of poverty.

This measure is easily understood by general public and hence is popular with
policymakers and development practitioners. The limitation of the measure is that it is
insensitive to change in the level and distribution of income among the poor. The other
measures of poverty commonly used to take into account the distribution issue are a)
the Poverty Gap Index and b) the Squired Poverty Gap Index. The Poverty Gap Index
measures the average (of poor and non- poor households) of the percent of income gap
of the poor households from the poverty line and is used as a measure of intensity of
poverty. It measures the percent of total income needed to be transferred from the non-
poor to poor households to lift the poor above the poverty line. However, if the society
is averse to inequality in the distribution of income among the poor, the poverty measure
must be sensitive to income transfers from the moderate to the extreme poor. It means that
higher priority must be given to the improvement in the economic conditions of the
extreme poor compared to the moderately poor. The Squared Poverty Gap Index satisfies
this condition and is used as a measure of the severity of poverty.

Poverty situation at the national and regional level is reported in Table- 2. Poverty Gap
and Squared Poverty Gap by seven administrative divisions are presented in this Table.

Table 2: Poverty Gap and Squared Poverty Gap by Divisions

Poverty Line and Division Poverty Gap in percent Squared Poverty Gap in
(using upper poverty line) percent (using upper poverty
line)
National 6.5 2.0
Barisal 9.8 3.4
Chittagong 5.1 1.5
Dhaka 6.2 1.8
Khulna 6.4 2.0
Rajshahi 6.2 1.9
Rangpur 11.0 3.5
Sylhet 4.7 1.3
Source: BBS, HIES (2010)

The Poverty Gap (PG) estimates the depth of poverty of the population. The HCR of poverty
gives only the percentage value of poverty incidence, but it does not measure the distance of
the poor households from the poverty line. Using the upper poverty line, at the national
level recorded the PG at 6.5 percent in 2010. The same was highest for Rangpur division
at 11.0percent in 2010.The Squared Poverty Gap (SGP) measures the severity of poverty.
Using the upper poverty line, at the national level has recorded the lowest SPG which was 1.3
percent in 2010.
Income and Expenditure of Households

The highest average monthly household nominal income was recorded at Tk. 14092
for Chittagong Division followed by Dhaka Division at Tk. 13226 and Sylhet Division at
11629 and all of these exceeded the national average of Tk.11479 in 2010. The four
Divisions, which recorded monthly household income below the national average, were
Barisal Division at Tk.9158, Khulna Division at tk. 9569 and Rajshahi Division at Tk.9342
and Rangpur division Tk.8359 (Table 3).

Table- 3: Monthly Household Nominal Incomes and Consumption Expenditures by

Divisions- 2010

Division Income (Taka) Consumption

Expenditure(Taka)
National 11497 11003
Barisal 9158 9826
Chittagong 14092 14360
Dhaka 13226 11643
Khulna 9569 9304
Rajshahi 9342 9254
Rangpur 8359 8298
Sylhet 11629 12003
Source: BBS. HIES (2010)

The highest average monthly consumption expenditure was recorded in Chittagong Division
at Tk. 14360 followed by Sylhet division at Tk. 12003 and Dhaka division at Tk. 11643 and
their income exceeded the national average of monthly household consumption
expenditure at tk.11003 in 2010. On the other hand, the average monthly household
expenditure of Barisal Division, Khulna Division and Rajshahi division and Rangpur
Division fell well below the national average and were estimated at Tk. 9826, Tk. 9304 Tk.
9254 and 8298 respectively.
RESULTS AND KEY FINDINGS

Bangladesh has a very small economy in terms of per capita gross domestic product (GDP)
and gross national income (GNI). Since 1991-92, the incidence of poverty has decreased to
31.5 percent in 2010 at the national level with an annual average reduction rate of 1.32
percent. It is evident that the incidence of poverty is higher in rural areas than that of the
urban areas and the rate of decrease of poverty is also higher in rural areas (1.24 percent) than
that of the urban areas (1.13 percent) (HIES, 2010). Gini co-efficient of income has increased
from 0.451 to 0.458 at national level with a growth rate of 0.16 percent during the same
period. Furthermore, general inflation and food inflation are positively associated with
income inequality of population. This indicates an increase in both general inflation and food
inflation which has been contributing to rising income inequality in Bangladesh. There is a
strong argument that persistent and fair economic growth helps in poverty reduction. The
poverty situation in Bangladesh has seen a little different scenario, as the country had a
steady growth since 2000, but the poverty situation has not improved as it should be.
In Bangladesh, the number of people living in poverty has increased due to rising disparities
in the distribution of resources within the country. Unequal growth pattern has a weaker
poverty-alleviating effect and has been shown to be harmful to growth. Therefore, reduction
of poverty is hard to pin down without addressing inequality. In Rajshahi and Rangpur
division poverty is higher than other divisions of Bangladesh. It has also seen that Rangpur is
poorer division than Rajshahi or any other divisions.

GOVERNMENT POVERTY REDUCTION POLICY, PROGRAMS & PROGRESS

A. Government Action Plan for Key Sectors

1. Human Development: The GOB emphasized in its program for human capital
development providing quality of education and ensuring equal access to affordable basic
health and education services. The GOB intends to utilize internal resources as well as the
help of IDB and other development partners to develop a comprehensive health and
education facilities. Through its Health, Nutrition and Population Sector Program (HNPSP)
(2003-2011), the Government will ensure access to quality health services for all, mother and
child health care, and implementation of family planning. The GoB is committed to achieve
Education for All (EFA) by 2015 and attaches highest priority to education sector. Hence, it
intends to utilize internal resources as well as the possible assistance from IDB and other DPs
to develop a more comprehensive health and education facilities. The GoB has also
revitalized the micro-credit programs to further expand the social safety net programs for
poverty reduction.

2. Energy & Power: Energy and Power are prerequisites for higher economic growth,
poverty reduction and social development. It has since declared its vision for power to make
the country free from load shedding beyond 2010 and to make electricity available for all by
year 2020. It has also given emphasis to energy sector (oil, gas and natural resources) by
substituting imported energy by indigenous fuel, mainly natural gas, to encourage private
sector/PPP to initiative in exploration, production, and distribution of oil and gas, thus
attaining energy security by 2021.

3. Agriculture, Food Security and Water Resources: Agricultural production is

inextricably linked to nation's water resources management that has been playing a major role
in food production by way of irrigation during the crucial crop production system. The GoB
has since adopted the National Agriculture Policy (NAP) with the aim to make the nation
self-sufficient in food through increasing production of all crops especially by using
appropriate technology. Hence, reaffirm its commitment to make the country self-sufficient in
food by 2013.

4. Environment & Climate Change: Disasters such as flood and cyclone have been a major
hindrance for secured and safety life of people of Bangladesh. Global climate changes have
since exacerbated the livelihood of the farmers and population living on the coastal areas.
Land degradation, biodiversity loss, contamination, air and water pollution have created
unprecedented pressure to the Government to adopt necessary but intelligent measures such
as clean and renewable energy, effective farming/cropping tolerance technology to help
alleviate the pervading effects treating to lives, food security and economic growth. The
government has vigorously taken part in the international negotiations such as Copenhagen
Accord for Climate Change and help to realize the goals under the Bali Action Plan.
5. Transport & Communication: Bangladesh is densely populated country with population
of 1,000 person/sq km. Geo-strategically, its location is very significant in terms of Asian
continental surface connectivity, facilitating land transport across the continent. The
Bangladesh Road Master Plan Study 2007 estimated the freight and passenger transport to
grow at 6.4% per year for 2010-2015. The government via NSAPR II has since identified
about 127 projects to implement within the next 5 years with a total cost of US$6.2 billion, to
be further assisted with the coordination and participation of DPs.

6. Digital Bangladesh & ICT Development: The Digital Bangladesh vision 2021 require
immediate and constant partnering with DPs to help shape a proper landscape of IT and
multimedia super-corridor to help boosting income generating activities and connecting
Bangladesh to the world. The government realized the importance of "Humanware"
knowledge development using ICT platform to further equip its institutional capacity. Under
its ICT Policy 2009, it has committed to provide enabling environment for citizen
information access and ecommerce, a network of pro-active and ready changed agents in the
ministries, districts and Upazilas, hence, guidance and assistance from DPs can accelerate
this journey.

B. Governments Poverty Reduction Agenda

The favorable impact of Bangladesh’s limited economic intervention aside, the pace of
poverty reduction in Bangladesh remains much lower than in faster-growing East Asian
countries like China, Thailand, and Vietnam, which underscores the importance of higher
growth for achieving even faster reduction in poverty.

Since 2002, GOB initiated the PRSP to pursue development objectives. The first full blown
PRSP, titled ‘Unlocking the Potential’ was implemented during 2005-08, while the second
PRSP ‘Moving Ahead: National Strategies for Accelerated Poverty Reduction (NSAPR II)
FY 2009-11’ was approved by the Government in October 2008.

The previous Government’s national poverty reduction strategy (NPRS) reaffirms that
reducing poverty and accelerating the pace of social development are the most important
long-term strategic goals. Built on the policy triangle of growth, human development, and
governance, the NPRS aimed to make progress in (i) employment generation, (ii) nutrition,
(iii) maternal health, (iv) quality of education, (v) sanitation and safe water, (vi) criminal
justice system, (vii) local governance, and (viii) monitoring of results.
Good governance was to be fostered by reforming the criminal justice system, strengthening
public administration, combating corruption, promoting local governance, and improving
public expenditure management. This was envisioned by fostering partnerships between
government, private sector, and civil society organizations to improve service delivery.
Environmental management was an integral component of the NPRS. The NPRS includes
specific measures to address the problems of air and water pollution in Dhaka and secondary
cities and towns, reverse land degradation and salinity, preserve biodiversity, promote
afforestation, and mitigate arsenic contamination of the groundwater supply.

As a result of vastly improved transport and communication networks, rural labor has become
more mobile; farming has become more market-oriented; and the poor are now able to draw
their livelihoods from a continuum of farm, off-farm, rural, and urban activities.

The current government, which came in office in January 2009, according to its election
manifesto, seeks to speed up economic growth and poverty reduction while adapting to the
impacts of climate change to transform Bangladesh into a middleincome country by 2021, the
50th year of the country’s independence. Aligning the strategy with its election mandate, the
government’s policy framework under NSAPR II puts poverty reduction as the central issue
of its development agenda as it prepares a long term Perspective Plan for 2010-2021 to
reduce poverty to a "tolerable level" propelled by high growth and social justice. This vision
is to be implemented initially through the NSAPR II, followed by two successive five year
plans.

The five priority areas of the revised NSAPR II are maintaining macroeconomic stability and
stabilizing commodity prices, continuing effective actions against corruption; ensuring
adequacy of power and energy; achieving significant reduction of poverty and inequality; and
establishing good governance.

Sector highlights in the NSAPR II regarding Reducing Poverty and Inequality include: a.
Pursuing labor intensive economic growth for accelerated poverty reduction; b. promoting
decentralized growth with broad public participation, growth of rural towns and semi-urban
areas; c. reducing population growth and reaping the benefit of demographic dividend; d.
focusing on women’s advancement and rights; e. Investment in infrastructure, creation of
employment opportunities in the lean (i.e. post-harvest) periods, bringing vibrancy in
agriculture and rural life; f. Expanding and strengthening safety nets programs for the poor.
Resource requirement for the totality of expanded activities and programs in the NSAPR II
are estimated at US$4.16 billion/year, which exceeds the usual level of foreign assistance
($2-2.5 billion a year) that the GOB receives from development partners;

The Government plans to continue its efforts to increase tax-GDP ratio by expanding the tax
net and the revenue administration system would be overhauled, restructured and broadened
to raise revenue flow.

Financial Sector Reform will continue and an enabling environment will be created to
encourage PPP and FDI.

The government unveiled on August 30, 2009 the first stage of their strategy to alleviate the
power crisis. The government will reportedly invite bids by September 10 for the installation
of 17 diesel and furnace oil-run plants to generate 1,330 megawatts of electricity on a fast-
track basis. The initiative to fast track solutions to the crisis is welcome, but an over-reliance
on rental power solutions will ultimately prove to be costly. There are significant
opportunities in replacing the old government owned power plants in Bangladesh. Also, the
National Coal Policy needs to be finalized as soon as possible. Bangladesh’s long-term
energy policy must rely on rapid and efficient extraction of domestic coal reserves.8

C. Progress in Achieving MDGs

The government is currently preparing a long-term Perspective Plan (20102020) to lay out its
development vision. To realize this vision, the government has begun implementing the Sixth
Five Year Plan (2010-2015). Bangladesh’s second Poverty Reduction Strategy Paper – “Steps
towards Change: National Strategy for Accelerated Poverty Reduction II (NSAPR II)” –
provides a framework for implementing the government’s agenda during FY09-FY11. While
the timeframe is too narrow for comprehensive evaluation of progress toward the NSAPR II,
using the 2005 Household Income and Expenditure Survey (HIES), the strategy provides
evidence that Bangladesh made progress in reducing poverty and identifies three main
challenges: poverty of women, regional inequality, and extreme and chronic poverty.

Regarding the Millennium Development Goals, the current trend indicates Bangladesh is well
on track in achieving the MDG targets in the areas of hunger (Goal 1), net enrolment in
primary education (Goal 2), gender parity in primary and secondary education (Goal 3),
reducing child mortality and improving immunization coverage (Goal 4), rolling back malaria
and controlling tuberculosis (Goal 6), and improved drinking water supply (Goal 7). The
areas that remain in need of attention are poverty reduction and employment generation (Goal
1), increases in the primary school completion rate and adult literacy rate (Goal 2), creation
of more wage employment for women (Goal 3), reduction of the maternal mortality ratio and
increase in the presence of skilled health professionals at delivery (Goal 5), increase in
correct and comprehensive knowledge of HIV/AIDS (Goal 6), increase in forest coverage
(Goal 7), and coverage of Information and Communication Technology (Goal 8).9

Progress was reported since the implementation of the first NSAPR in 2005. All available
projections point to a decline in poverty during this period. In the area of human
development, having attained gender parity in primary and secondary education, Bangladesh
is on track to achieving the targets of halving the number of people living below the poverty
line. This progress was accompanied by substantial narrowing of the gender gap in neonatal,
infant and child mortality (since 2003, infant and child mortality declined by 20 and 25%
respectively, outstripping progress in other South Asian countries).10 Reversing past trends,
women now live longer than men. The total fertility rate has been more than halved.

Maternal mortality and under-nutrition rates, though still high, are registering decline. The
development of countrywide network of healthcare infrastructure in public sector is
remarkable.11 Health, nutrition and population are intimately related and complementary to
other sectors of the economy. Improvements in health and nutrition would translate into
higher incomes, higher economic growth and decline in poverty. Moreover, increase or
decrease of population size and change in the age composition has direct bearing on socio-
economic development. It is noteworthy that Bangladesh has made significant progress in the
health outcomes and some of the major gains have been achieved through low-cost solutions.

Hence, it is crucial for the Government to tackle the poverty as one spectrum of engagement
which has direct spill-off effects towards better education and healthcare services by
employing a proper but relevant mechanism while effective on current scenarios facing the
poor both in rural and urban areas as concerned. In other words, active community
participation is key for all implementable projects to kick-offs smoothly and it is the
government to ensure the assistance received from DPs and NGOs are fully triggered down to
the needy by cutting unnecessary bureaucratic procedures along the delivery cycles.

Doing Business indicators have also shown improvements since 2005, and progress was
recognized in global governance rankings and a recent National Public Perceptions survey.
Political turbulence gave way to elections in December 2008 leading to a peaceful transfer of
power. Key reforms during 2005-09 include: improved public financial management through
adoption of a medium-term budget framework (MTBF) and generally sound public
procurement regime; passage of a Right to Information Act; corporatization of state-owned
banks; gains in regulatory reform; and increased local accountability through strengthened
local government capacity and the revival of elected local councils. 12

D. Enhancing Human Capital & Capacities

1. Human Capital: For Bangladesh, progressive social and human developments are the
subset of good standard of living and instrumental to economic development. Access to
affordable, high quality health care and education are not only essential to increase stock of
human capital, but form an integral part of key performance indicators of the government
policies towards country’s poverty dynamics.

There is general agreement that the number of institutions and enrolments have grown at all
levels, but the quality of education has deteriorated, especially in institutions attended by the
children of poor families. The declining quality of education reduces the employability of the
learners creating a disincentive for the poor people to send their children to school. The
commitment of the government is to achieve 100% literacy by 2014.13

The government has taken multi-faceted actions in accelerating the pace of providing primary
and mass education. The compulsory primary education programme now covers the whole
country. The government has moved to improve the quality of education through the
introduction of primary school quality level standards, increased access, participation and
completion of the primary education cycle. One of the important election pledges of the
government is to enrol all children of 6-10 years age by 2011. The government also started a
school feeding program under which a child is provided with 75 grams of fortified biscuits in
eight poverty-stricken upazilas of three selected districts.14

Secondary education is provided through collaboration between the government and non-
government providers within a regulatory framework. Poverty is a deterrent to secondary
school access because, in addition to the tuition fees, there are high additional costs for
transportation, uniforms, books and materials and private tutoring.

Retention of the students in secondary education is one of the major challenges. A positive
development, as noted above, has been the closing of the gender gap in secondary school
enrolment with 52.3% share of girl students. Stipends and exemption of tuition fees for girls
in rural areas have made a difference.

The technical and vocational education and training (TVET) programmes offer courses of
one to four years duration after the junior secondary level (class VIII). Vocational training
institutes, polytechnics, commercial institutes, technical training centres and specialised
institutes offer such courses. Stated government policies and goals are to increase the
proportion of participants in TVET to 20% of the students enrolled in the secondary stage by
2020 from the present proportion of around 3%. The objectives of TVET are to expand it for
the poor, particularly for adolescents, young adults, adults, males and females and make
provision for TVET after class VI, VII and equivalent grades.15

2. Human Capacity 4.30 Health, nutrition and population (HNP) are intimately related and
complementary to other sectors of the economy. Improvements in health and nutrition would
translate into higher incomes, higher economic growth and decline in poverty. Moreover,
increase or decrease of population size and change in the age composition has direct bearing
on socio-economic development. It is noteworthy that Bangladesh has made significant
progress in the health outcomes and some of the major gains have been achieved through
low-cost solutions.

Three criteria are prerequisites to determine the accessibility to proper and adequate health
services namely the physical access (remote areas facing delays when admitting patients to
hospitals located in urban areas), ability to pay (for care and transport) and most importantly,
the level of knowledge and information that could have reach the poor on the availability of
healthcare services.16

It is fully noted that public health service (primary level) is still under-funded in Bangladesh
at this juncture. As the cost of medical bills and ancillary costs are deterrent to the poors’
good heath care needs, it may have reflected lower attainment based on some of the NSAPR
II key objectives to eliminate all kind of contagious diseases, increase life expectancy of
citizens and reduce maternal mortality.17

E. Governance & Poverty

Better governance in central and local public administration is critical for higher growth and
faster poverty reduction. More-accountable, more-transparent, and more predictable local
government offers a better vehicle for economic and social progress. The governance reforms
begun under the caretaker government must be sustained.

Although the overall governance setting is marked by poor law and order, systemic
corruption, and a decline in civil service quality, several positive aspects of governance
explain Bangladesh’s success in accelerating growth and reducing poverty over the past
decade. Since the 1990s, the Government has increasingly supported private sector
development through sound macroeconomic management and measures to open up the
economy. The sustained use of public resources to support technological progress in
agriculture, rural infrastructure, health, and education, combined with progressive policies to
ensure community participation have helped Bangladesh make a strong start in meeting the
Millennium Development Goals (MDGs).

A dynamic private sector, a growing skilled labor force, a capable network of NGOs, and
dedicated elements of the public service are drawing on their respective resources, talents,
and capacities to address the tremendous array of constraints that are keeping the country
from realizing its full economic and social potential. But Bangladesh faces even formidable
challenges: the urgent need for improved law and order, better infrastructure, sound financial
markets, quality social services that are accessible and affordable, clean urban habitats, and
an enabling environment for private sector development.

Economic growth and poverty reduction continue to be frustrated by a lack of accountability,

transparency, and predictability in the way government operates. In addition to corruption and
poor law and order, key governance issues include excessive centralization of decision-
making authority, lack of judicial autonomy, weak enforcement of contracts and inadequate
access to commercial justice, rigid administrative orientation of the public service, scant use
of modern governance technology (e.g., e-governance), and dearth of opportunities for
ordinary citizens to participate in public decision making.18

Albeit slow, the Government is making steady progress in addressing some broad governance
issues, including improving fiscal management, financial management, project
documentation and processing, public sector management efficiency, and corporate
governance in key sectors. Recent measures by the Government to address core governance
issues include the creation (and recent reorganization) of the Anti-Corruption Commission
(ACC), strengthening of law enforcement agencies, establishment of regular courts in the hill
districts where the majority of the country’s indigenous peoples reside, initial steps to
separate the judiciary from the executive, and various civil and criminal justice reforms. The
United Nations Convention Against Corruption (UNCAC) has been ratified, ACC legislation
amended in line with the UNCAC, asset declaration made a requisite for public servants and
lower-court judges, and grievance handling made part of line-agency procedures. The new
Right to Information Act should result in a more transparent and accountable government.19

The Government has initiated a national integrity strategy aimed at combating corruption in
the Government. A broad consultation process has commenced for this purpose with the
support of Bangladesh’s development partners.

The needs of the poor are well met in areas that have a diversity of service providers, more
local decision-making, and active efforts to empower the weak and excluded segments of
society. Creating space for private sector and NGO service provision, commercializing public
sector activities, fostering public-private partnerships, and gradually decentralizing
responsibilities to local governments have helped transform many poorly performing and
unresponsive central government services into competitive, accountable, and demand-driven
services that reach the poor and provide good value for money.

The civil service comprises over 1 million staff in 37 ministries, 11 divisions, 254
departments and 173 statutory bodies. While the size of the civil service has doubled over the
past three decades, the quality of public administration has declined, as has the real
purchasing power of salaries paid to civil servants. Weaknesses in public sector capacity stem
from politicization of the civil service, poor quality of intakes, a generalist approach to
administration, bureaucratic centralization, a culture of secrecy resulting in low
accountability, lack of results orientation with an emphasis on process over efficiency,
inadequate training and capacity building efforts, limited performance incentives, and weak
performance monitoring. Technical and administrative constraints, combined with inadequate
resources and limited authority, hamper efforts to build local capacity.

F. Civil Society and their Contribution towards Poverty Reduction

Forging robust public-private-NGO partnerships is essential to ensure that capacities to serve

the poor are in place. Bangladesh has a flourishing civil society, including some of the
world’s most innovative NGOs and community-based organizations, and a diverse free press.

Strong partnerships with nongovernment organizations (NGOs) to deliver grassroots public

services are clearly critical in filling the gaps in the existing poverty reduction agenda.
While labor-intensive manufacturing and services have boosted poverty reduction in urban
areas, more progress was made in addressing absolute deprivation in rural areas, as measured
by the improving trend in the rural poverty gap, due in large part to microfinance and other
NGO supported initiatives targeted to poor rural women.

The microfinance sector in Bangladesh is one of the world’s largest. Bangladeshi MFIs are
best known for their pioneering, large-scale provision of microfinance services, principally
tiny collateral-free loans to poor women (using social collection). In the macro context,
micro-credit loans constitute around 5.5% of total private sector credit in the economy in
2005.20

The government also supports the microfinance industry through its own microfinance
programs as well as through strengthening of the regulatory framework relating to
microfinance institutions. The Microcredit Regulatory Authority Act 2006 was introduced in
July 2006 which has come into effect from 27th August 2006. The rules and procedures for
regulating Microfinance Institutions have also been drafted but are pending finalization.

The four largest MFIs; Grameen Bank, BRAC, ASA, Proshika account for 86% of the
currently 20 million active borrowers. The total current market size in terms of loan portfolio
is Tk 138,625 (US$ 1,980) million that includes Tk 36,336 (US$ 519) million from Grameen
Bank, Tk 36,116 (US$ 516) million from BRAC and Tk 24,704 (US$ 353) million from
ASA. The market share of portfolio of Grameen Bank is the highest (26.21%) followed by
BRAC (26.05%) and ASA (17.82%).

Grameen Bank, established in 1983, provides microfinance to the poor, particularly the
women who form a group with 5 likeminded persons having almost same socio-economic
conditions. Loans are given to individuals and 97% of its 7.97 million borrowers are women.
Over Tk 498 billion (US$8.74 billion) have been disbursed as of January 2010, with 2,562
branches operating in 83,458 villages. The borrower can use the credit in any productive
activity of her choice. However, field interviews with rural poor generates consistent
misgivings related to high effective interest rates 20% officially, though reportedly reaching
up to between 24% to 36% on average) and borrower testimony reveals very low amount of
job creation (accelerating local economic growth) resulting from micro-credit activities. 21

The private sector has also grown rapidly, and foreign investors, while a small force in the
total landscape, are growing in number and influence, particularly in the labor-intensive
manufacturing, energy, and telecommunications sectors.
CHALLENGES, ISSUES & RISKS TO POVERTY REDUCTION

1. Infrastructure investment needs to be boosted for faster economic growth and poverty
reduction. Underinvestment over the years has resulted in acute deficiencies, especially in
power and gas, ports, and roads, which are restricting business opportunities and access to
public services. Consequently, the government has to substantially raise project
implementation capacity in public sector agencies, lift ADP utilization, and carry out PPPs in
infrastructure. To launch the PPP scheme, the legal framework for setting the responsibilities
of stakeholders, for cost recovery provisions, and for compensation and redress mechanisms
needs to be put in place quickly.

2. A combination of cheap labor and a supportive policy environment helped Bangladesh

emerge as a major exporter of garments over the past two decades. However, overwhelming
dependence on one industry has made the country’s export earnings acutely vulnerable to a
global slowdown. Recent experience underscores the urgency of diversifying into other
promising industries such as ceramics, pharmaceuticals, food processing, leather products,
and spare parts for machinery and shipbuilding. An important requirement for such an export
transformation is the necessary utility services such as power, gas, and water. Streamlining
the export duty drawback system and improving customs and bonded warehouse facilities are
also required.

3. Climate-induced disasters are endemic in Bangladesh, ruining the lives and livelihoods of
millions of people, damaging infrastructure, and harming the physical environment. Climate
change multiplies these inherent risks, undermining development prospects and eroding the
gains in poverty reduction. Major efforts need to be mounted for mobilizing funds for
adaptation measures, putting in place the right policy frameworks, and building institutional
capacity.

A. Education

The quality of secondary education remains a major challenge. The curriculum does not
relate to prospects of employment, entrepreneurship and practical skills. Examinations mostly
test ability to recall information and do not test the ability to reason, or apply, analyze and
synthesize information. Expansion in enrolment has not been matched by increase in physical
capacity and human resources. Students both per class and per teacher are around 60. Almost
half of the teachers do not have any professional training. Academic supervision of secondary
schools is weak and almost non-functional.
The main issues regarding access to tertiary education are two-fold: (a) equity of access to
universities and prestigious institutions leading to potentially high private return from higher
education, and (b) the balance of enrolment in different fields. Gender disparity in higher
education persists, despite progress at the primary and the secondary levels. In tertiary
education, increase of enrolment of male and female students in professional degree
education may be improved in accordance with the domestic needs and also according to the
needs of the countries importing human resources.

B. Health, nutrition and population

There are major differences in health conditions and health care consumption between
different groups. Improvements in some areas are relatively more difficult to sustain while
there are indications of stagnation in others. Though maternal mortality is declining, it is still
one of the highest in the world. So is neonatal mortality. Bangladesh’s current challenge is to
improve effective service delivery, health sector governance (especially in primary and
maternal health services), and increase the number of trained birth attendants.

Though diarrhea has been managed quite successfully, still it is a great killer. Threats of
HIV/AIDS, particularly from injectable drug users, pockets of malaria, kalazar and filaria and
multi-drug resistant TB are also emerging as challenges. Meeting the health needs of the fast
growing urban poor including the slum dwellers will continue to pose major challenge. The
development of appropriate strategies to handle the large number of informal semi or un-
qualified health care providers (village doctors, drug sellers, kobiraj, totka, herbalist, faith
healers, untrained traditional birth attendants etc.) catering to the needs of majority of the
population particularly of poor and women poses some challenge. Centralized management
system of the government health services and prevalent practices at the facility levels result in
absenteeism of service providers. These are emerging as major obstacles to effective and
efficient utilization of the countrywide health care infrastructure network.

Population pressure is a related concern. It is straining ecosystem services, such as safe water
supply and habitat as well as other natural resources, and pressuring the government in terms
of providing infrastructure, utilities, and other services. Although Bangladesh has made
progress over the past two decades in nearly halving the total fertility rate to slightly above
the population replacement rate, further progress is needed—by raising investment in family
planning and reproductive health—to push the fertility rate to below the replacement rate. Job
opportunities will also need to be created for the large number of youths entering the job
market each year.22

C. Agriculture

The gain in poverty reduction may have eroded to some extent because of the sharp increase
in the prices of rice and other essential commodities especially during the early months of
2008. Given the relatively high weight of food in the consumption basket (nearly 61% in
rural areas and 45% in urban areas), high food prices during 2008 may have made the poor
poorer and pushed some above the poverty line into poverty. Although the impact of the
present global economic crisis in Bangladesh is relatively low, the growth of the real
economy has been adversely affected including exports. The sensitivity has been heightened
by the export led growth strategy that Bangladesh follows thereby affecting export related
production and investment as well as softening of domestic demand. The GDP growth rate
has fallen in 2009 leading to increased fiscal stress, unemployment, poverty, and deprivations
especially for the vulnerable groups.

In addition, while approximately 90% of food stock is distributed by the private sector, once
government stock is threatened, collusive behavior resulting in price increases and gouging
takes place. Therefore it has been noted that keeping government/ public food grain
replenished remains important due to such serious effects.

DONOR COORDINATION

1. Current contribution levels in Bangladesh by major donors ranges between $2 billion- 2.5
billion a year.

2. To further harness its commitment to the nation, the government and its development
partners (DPs) via Joint Cooperation Strategy Group (JCS) (of which IDB is currently not a
member) are blending efforts to coordinate and harmonies all actions and initiatives in
support of the government to come up with proper poverty alleviation strategies that are
critical for effective implementation throughout the nation.

3. It is also recognized that a lot more has to be done to improve the way the DPs can work
together to increase the effectiveness of aid in Bangladesh. Despite some improvement
perhaps on bilateral coordination/arrangement with the government, collectively, but among
DPs, it posed significant challenge to deliver on the PARIS and ACCRA aid effectiveness
commitments to date. In many sectors, most program activities such as field missions are not
well coordinated and there are varieties of funding mechanisms with many DPs operating
separately. This fragmentation leads to overlap, duplication and high transaction costs for
both Government and DPs.

Nonetheless, it is very important that the government to assume ownership and while the DPs
are critically enhancing the capacity support to the Government, periodical assessment should
be made available and, as such, the establishment of JCS is seen prerequisite to provide a
platform to discuss strengths and weaknesses as far as the harmonization of activities and
reporting of results are concerned.

For the stakeholders among DPs, enhancing the use of country systems is a key commitment
taken in PARIS.23 This would include among other things, strengthening country
procurement and public financial management system more effectively to better address the
probable delays in delivery channels to the poor. In return, this would reduce transactions
costs resulting from uncoordinated development activities, a multitude of different
programming and implementation mechanisms, as well as fragmented aid/programs
budgets24.

In that context, it is time for DPs and Government to choose the right ways (as in line with
PARIS and ACCRA Declarations) to re-look at establishing mechanism to strengthen mutual
accountability and inclusive partnership altogether. 6.7 Taking cognisance from the
Bangladesh Development Forum (BDF) that was held in February 2010 in Dhaka, it has been
agreed that the forum to provide necessary technical analysis and exchange of feedback to
further harness the existing revised NSAPR II (2009-2011) into an effective implementation
of NSAPR II (2011-2015). This in turn would be reflected into its Vision 2021 to turn
Bangladesh into knowledge-based middle income country graduating from poor level
undeveloped nation.

Key Targets (Vision 2021) People’s Republic of Bangladesh: Followings are some of the
key targets based on Pro-poor Vision 2021 for Bangladesh:

 Secure and sustain annual level of GDP growth of 8% by 2013 and raise it to 10% from
2017;

 Bring down the% age of disadvantaged people living below the poverty line to 15% by
2021;
 Ensure a minimum of 2,122 k. cal/ person/ day of food to all poor people and standard
nutritional food to at least 85% of the population by 2021;

 Ensure 100% net enrolment at primary level by 2010, provide free tuition up to the degree
level by 2013, attain full literacy by 2014, and ensure that Bangladesh is known as a country
of educated people with skills in information technology;

 Achieve self-sufficiency in food by 2012;

 Ensure living accommodation for the entire population by 2015, supply of pure drinking
water for the entire population by 2011, and bring each house under hygienic sanitation by
2013;

 Eliminate all kind of contagious diseases and increase life expectancy of citizens to 70
years by 2021;

 Reduce maternal mortality to 1.5%, raise the use of birth control methods to 80%, and
bring down infant mortality to 15 per 1000 live births by 2021;

 Change the sectorial composition of output with the share of agriculture, industry and
services standing at 15%, 40% and 45% respectively in 2021;

 Reduce underemployment rate to 15% along with changing employment shares of

agriculture, industry and services to 30%, 25% and 45% respectively in 2021;

 Generate 7,000 megawatt of electricity by 2013, raise it to 8,000 megawatt in 2015 and
make provision to meet the expected demand for power of 20,000 megawatt in 2021.
CONCLUSION

The eradication of poverty and inequality and meeting of basic needs are the primary goals
for any government. However, achieving a reduction in poverty and inequality is a
fundamental challenge in Bangladesh. Despite considerable trust on poverty alleviation in all
plan documents since the independence of Bangladesh, a significant number of people are
still living below the poverty line. Most of the labor force is engaged in informal low
productivity and low-income jobs. The access to secondary and tertiary education is limited
and the quality of education at all levels is deficient. The poor group of the population is
severely disadvantaged in terms of ownership of assets and has inadequate access to
institutional finance as well as to basic services including quality education, healthcare, water
and sanitation. High price of food and high food inflation bring miserable sufferings to its
population especially those who have no or little income. Along with focus on economic
growth and employment, substantial attention needs to be given to reduce the growth
of population. Inequality emerges from a combination of greatly unequal distribution of
physical assets as well as human capital.

Broadly speaking, the Divisions of Rajshahi and Rangpur show higher poverty and lower
income growth than the Divisions of Chittagong, Dhaka and Sylhet. Bangladesh needs
adequate state intervention programs and strategic policies to improve the current poverty
situation. Theoretically, there are some of the strategic documents and policy papers are
seemed to be implementable to reduce the poverty situation in Bangladesh. However, without
proper monitoring and evaluation, the implementation of all these policies, strategies and
programs seems useless.

To stimulate investment facilities and employment opportunities in the Rangpur division

special incentives will not be enough. Along with these support in the form of adequate
infrastructure, access to utilities, services and other forms of support will be required to be
provided to the Rangpur division. A comprehensive plan for exploitation of natural resources
such as coal resources of the Rangpur division is needed.
Higher rate of public expenditure and extended coverage of social safety net programs in the
Rangpur division should be the norm. Ownership of productive assets by low income and
landless households will need to be supported and opportunities will need to be created for
them to take part in income generating activities. Micro- credit facilities should be expanded
to the sharecroppers in the Rangpur division. Construction of gas transmission line to the
Rangpur division would be expedited.

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