Understanding Poverty in Bangladesh

Considering the importance of poverty reduction, the United Nations targeted ending poverty as the number one goal out of its 17 Sustainable Development Goals (SDGs). Many countries and development partners aim to fight against poverty in all its dimensions, putting poverty reduction as their central goal.

Despite notable achievements in reducing poverty, Bangladesh is still the home of 40 million poor people.

A person with inadequate income for meeting his/her basic needs, such as food, clothing, shelter and other necessities is largely treated as poor.

Yet, poverty is not always only associated with income.

As Sen(2001) has reiterated that poverty needs to be examined from the perspective of deprivation of basic capabilities, which complicates in ensuring one's well-being. Capability deprivation is often more important than the reduction of income in understanding the complex process of poverty (Sen, 1983).

Poverty is a multi-dimensional phenomenon. In order to address multi-dimensional aspects of poverty, poverty reduction programmes or projects should be context-specific, need-based and demand. In Bangladesh since 2005, the Cost of Basic Needs (CBN) is used to calculate the rate of poverty where "a poverty line can be defined as the minimum level of household income that can enable the purchase of a bundle of goods and services to satisfy the basic needs of the household" (BBS 2011).

Under the CBN method, two poverty lines, ie, "upper poverty line" and "lower poverty line" are used to determine "poor" and "extreme poor" respectively.

However, for sustainable poverty reduction, poverty needs to be analysed not only from the perspective of income, expenditure and consumption, but also from the perspective of empowerment, equity, perception and values of an individual putting human being at the centre of all activities. Putting intergenerational equity at the heart, necessary data need to be generated for better monitoring.

It might not be possible to achieve the target of sustainable poverty reduction if the programmes are not economically efficient, socially justified and environmentally sound.

The long-term trends in poverty show notable progress of Bangladesh since independence. According to the nationwide "Household Income and Expenditure Surveys (HIES)", the proportion of population living below the poverty line was as high as 71 percent in 1973/74, the earliest survey year after the country's independence.

By 2015, it had come down to 24.8 percent.

It is to be noted that different methods of poverty calculation were used in different surveys. However, the evidence on long-term decline in income-poverty based on national-level data is also confirmed with slight differences by a number of longitudinal studies with small sample size.

By most estimates, Bangladesh has achieved a poverty reduction rate of around one percentage point a year since the early '90s. An estimate based on the HIES of the Bangladesh Bureau of Statistics (BBS) shows poverty declining from 58.8 percent in 1991/92 to 24.8 percent in 2015 using upper poverty line, and from 42.7 percent in 1991/92 to 12.9 percent in 2015 using lower poverty line.

There are some interesting features in the journey of poverty reduction in Bangladesh. First, the trend in terms of the ratio of poor people and the absolute number of the poor is encouraging. Before 2000, the ratio of poor people as a percentage of total population declined to some extent, but the absolute number of poor people continued to increase.

Recently, the rate of poverty reduction has been faster than the rate of population growth. That means, the actual number of absolute poor people declined over time, particularly since 2000. The increasing trend of poverty reduction and, at the same time, decreasing trend of population growth both contribute to bringingthe aforesaid result.

Secondly, the rate of poverty has decreased over time both in rural and urban areas. The decreasing rate in urban areas is a bit faster than rural areas. That means, the urban poor move out from poverty quickly than rural areas.
Thirdly, the number of poor people has declined from 58.8 percent in 1991 to 24.8 percent in 2015 and the number of the extreme poor has declined from 42.7 percent in 1991 to 12.9 percent in 2015. The incidence of extreme poverty has reduced faster than the incidence of moderate poverty.

Fourthly, the regional difference in terms of incidence of poverty is visible. There is a large difference among administrative divisions in terms of incidence of poverty, which is expressed as "Head Count Ratio (HCR)".
Every division has some positive changes in the rate of poverty, but the pattern of poverty reduction has changed over time. Household Income and Expenditure Survey 2010 reveals that Barishal division has the highest incidence of poverty, which is 39.4 percent.

The second largest incidence of poverty as percentage, ie, 35.6 percent has been found in Rajshahi division, followed by Khulna division, ie, 32.1 percent.

On the other hand, Chattogram division has recorded the lowest HCR at 26.2 percent. The other two divisions, Sylhet HCR with 28.1 percent and Dhaka HCR with 30.5 percent have ranked 4th and 5th positions respectively.

Apart from being income poor, a lack of access to basic services like education, health care, safe drinking water, sanitation facilities and electricity etc put people at a disadvantage and prevent them from living a decent life. A lack of access to basic services exacerbates income poverty by generating a poverty trap where people cannot improve their living conditions due to being uneducated and sick.

When a lack of access to basic services is also a consequence of being income poor, this creates a vicious cycle.

In this respect, governments have a responsibility for providing these basic services. If the provision is left solely to the private sector, inequalities in access is likely aggravated. State interventions, therefore, primarily influence the poverty reduction efforts in a country.

The government is pursuing various programmes and policies to reduce poverty and improve the quality of life within the shortest possible time. The government in the light of the Sustainable Development Goals (SDGs) has prepared 7th Five Year Plan and undertaken a number of initiatives.

Global change, whether it is climate, political or economic, creates risk and puts people in danger. Sustainable poverty reduction requires reducing vulnerability and building resilience. For those who have been able to move out of poverty, progress is often temporary: economic shocks, food insecurity and climate change threaten to rob them of their hard-won gains and force them back into poverty.

It is also important to understand who are at the stage of vulnerability to slidedown into poverty if any setback occurs in their life. The progress in poverty reduction in Bangladesh that has been achieved over the years cannot be sustained without addressing its multidimensional aspects and building resilience of its people, particularly those who are vulnerable to poverty.

It reveals from the existing documents that Bangladeshgovernment is significantly contributing towards poor people's access to different types of services through different interventions, such as establishing supportive macroeconomics to ensure rapid growth, selecting critical sectors to maximise pro-poor benefits from the growth process, provisioning appropriate safety net measures to protect the poor, promoting good governance through improving implementation capacity, improving service-delivery in the areas of basic needs and caring for environment and its sustainability, and improving Disaster Risk Reduction and Climate Change Adaptation.

The government also works, along with other organisations such as the PKSF, to expand the horizon of access to financial and non-financial services for the marginal people to increase productivity by promoting appropriate technology and value chain intervention. So that, the poor can get out from the low technology trap.

The PKSF, putting people at the centre, is working along with the government to protect the poor from any loss of assets and empower them so that they can participate in decision-making processes to enhance human dignity at all levels. Most importantly, the PKSF creates conducive environment so that a number of pro-poor institutions can be emerged at the local level. Those pro-poor institutions are supported by the PKSF, subject to adherence of some specific standards.

Creating conducive environment for emerging pro-poor institutions is a unique contribution of the PKSF in the field of sustainable poverty alleviation.Coordination between those actors is needed to avoid overlapping, to maximise resource utilisation and to promote better understanding about the complexity of poverty.

A shortage of necessary data often hampers policy formulation for poverty reduction.

AKM Nuruzzaman is the General Manager of PKSF