Poverty in Bangladesh

Poverty in Bangladesh has declined remarkably since the early-2000s, as result decades of accelerated economic growth. The remarkable progress in poverty alleviation has been recognized by international institutions.^[1] According to the World Bank, Bangladesh's poverty rate fell from 82% in 1972, to 18.5% in 2010, to 13.8% in 2016, and below 9% in 2018,as measured by the percentage of people living below the international extreme poverty line.^[2] Based on the current rate of poverty reduction, Bangladesh is projected to eliminate extreme poverty by 2024, as well becoming the only upper-middle income economy in South Asian region, according to the World Bank.^[3][4][5]

General overview of Bangladesh

Bangladesh's economic reform started with re-establishment of liberal democracy during early 1990. Implementation of investment friendly economic policies, privatization of public industries, budgetary discipline, and liberalization of trade were among the key elements behind acceleration of Bangladesh's economy. Since then, Bangladesh has been among the fastest growing economies in the world, exceeding 6 percent growth annually between 2004 and 2015. The GDP growth further accelerated exceeding 7 percent mark since then, and is projected to gradually exceed 10 percent growth until 2030.

Among Bangladesh's many economic and social achievements, dramatic reduction in poverty in often considered a phenomenon among international organizations such as IMF and The World Bank. Between 1972 and 2018, Bangladesh's population living on less than $1.90/day is estimated to have fallen from 82% to 9%. Between 2008 and 2018, The per capita income in the country increased 149%. ^[6]

Poverty among the Key Asian Nations

Economic data is sourced from the World Bank, current as of October 2018, percent(%) of population living below $1.90 per day.

Country	1970	2000	2010	2016	Present (2018-19)
Bangladesh	82	48.90	18.50	13.80	8.5
China	88	40.5	11.2	6.5	2.0
India	54.9	45.3	29.8	21.9	12.4
Pakistan	47	57.9	36.8	29.5	24.3
Myanmar	n/a	48.2	42.4	32.1	n/a

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.^[4]

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.^[7] 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.^[8] 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.^[8] 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.^[9] 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."^[9]

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.^[10]

Causes of rural and urban poverty

One of the main causes of poverty is the remnants of colonialism, followed by civil war. What the British did for a number of centuries was systematic disassembling and crippling of the national economy, ensuring Bengal never rises again. In the modern age, poverty is attributed to 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 diarrhoeal diseases such as dengue and malaria which will affect them physically and lower their productivity levels.^[11][12][13]

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, bad housing and sanitation. The urban poor hold jobs that are labour demanding, thus affecting their health conditions. Therefore, the urban poor are in a difficult situation to escape poverty.^[13]

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.^[14] 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.^[15]

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.^[15] Property prices also tend to be lower the higher the risk of flooding,^[16] 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^[17] 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.^[18][19]

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 labour, harvest or part of their land^[19]

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).^[20] 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.^[21] 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.^[22] 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.^[23] 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.

See also

• Bangladesh
• Economy of Bangladesh
• List of companies of Bangladesh
• Bangladesh Academy for Rural Development
• Electricity sector in Bangladesh
• Automotive industry in Bangladesh
• Bangladeshi RMG Sector
• Natural gas in Bangladesh
• Steel industry in Bangladesh
• Bangladesh textile industry
• Leather industry in Bangladesh
• Executive Magistrate of Bangladesh
• Index of Bangladesh-related articles
• Outline of Bangladesh
• Shipbuilding in Bangladesh
• Foreign relations of Bangladesh
• Tourism in Bangladesh
• Dhaka Stock Exchange
• Chittagong Stock Exchange
• 3G (countries)
• List of slums in Bangladesh

References