trends of poverty in bangladesh

Poverty Trends in Bangladesh

Course Title: Sociology of Bangladesh

Course No.: 4207

Prepared By

Md. Saeed Anwar and Babla GolderSociology Discipline

Khulna University

Khulna, Bangladesh

IntroductionBangladesh is one of the most densely populated

as well as the eighth largest country in the world with a population of 149.77 million (BBS, 2011).

Almost half of its people live on less than US$1.25 a day and 80% on less than US$2.00 a day (DFID, 2005).

Around 35% of the population of six major cities in Bangladesh lives in slums and it covers only 4% of the land area with limited or no access to services (World Bank, 2007).

By 2000 this figure came down to 49 percent. Over the period 2000 to 2005, the poverty rate further declined to 40 percent with around six million people lifted out of poverty (GOB, 2011).

Poverty: Definitions

Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity (IMF, 2005).

Jary and Jary (2004) defined poverty as, “the lack of sufficient material and cultural resources to sustain a healthy existence”

Poverty is “a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services” (UN, 1995).

An Overview of Poverty in BangladeshBangladesh is one of the world’s poorest

countries. With the help of international assistance, there has been a declining trend of poverty by 1% each year since 1990s (DFID, 2005).

However, they are unable to escape from extreme poverty, as the data from World Bank found that there is still 40% of the population to be below the national poverty line in 2005.

The population in Bangladesh is predominantly rural, with almost 80% of the population living in the rural areas. Many of them live in remote areas that lack services such as education, health clinics and adequate roads, particularly road links to markets.

They suffer from persistent food insecurity, own no land and assets, are often uneducated and may also suffer serious illnesses or disabilities (Baker and Schuler, 2004).

An Overview of Poverty in Bangladesh

The incidence of Poverty in Bangladesh is one of the highest in the world. Millions of people suffer from the hardship of poverty.

About one-third (31.5 percent) of its population is living below the poverty line (HIES, 2010).

Furthermore, the recent spikes in food prices, causing food inflation, have impact on poverty which may plunge an additional population of 0.04 million under the poverty line(Unnayan Onneshan, 2011).

Population under Poverty LineThe number of population living under poverty line

is still increasing. The number of population living below the poverty line has increased from 51.6 million in 1991-92 to 56 million in at national level (HIES, 2005).

If the current trend continues, the number of population living below the poverty line might stand at 57.3 million and 59.8 million by 2013 and 2021 respectively.

However, in rural areas, it might decrease to 40.2 and 38.1 million by 2013 and 2021 respectively.

Whereas, in urban areas, it might witness an increased population of 17.1 and 21.7 million by 2013 and 2021 respectively living under the poverty line in urban areas (Unnayan Onneshan, 2011).

Factors Affecting Poverty in Bangladesh Characteristics

Unnayan Onneshan, 2011 identified some factors affecting poverty in Bangladesh which are identified below:

1. Food Inflation and Population under Poverty Line: Food expenditure, food inflation and general inflation are positively associated with poverty and inequality. In 2000, 55.8 million people were living under poverty line while food inflation was 2.68 percent. After five years, food inflation has increased to 7.91 percent in 2005 when the number of total population living below the poverty line was 56 million.

2. Household Income and Expenditure: During the period of 1995-96 to 2010, the monthly household income has increased with rates of 10.86 percent, 10.92 percent and 7.10 percent at national, rural and urban regions respectively. At the same time, the monthly household expenditure has also risen with the rates of 11.58 percent, 11.78 percent and 7.57 percent while expenditure on food has increased with the rates of 10.64 percent, 10.63 percent and 8.32 percent at national, rural and urban areas respectively.

Factors Affecting Poverty in Bangladesh Characteristics

3. Unequal Growth and Poverty: In Bangladesh, the number of people living in poverty has increased due to rising disparities in the distribution of resources within this country. Unequal growth pattern has a weaker poverty alleviating effect and has been shown to be harmful to growth.

4. Income Inequality: Gini co-efficient of income has increased from 0.393 in 2000 to 0.430 in 2010 at rural areas with the growth rate of 0.94 percent, whereas it has decreased from 0.497 to 0.452 at the same time period in urban areas with the growth rate of -0.91 percent. 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.

Poverty Trends in BangladeshBangladesh has made strides in the fight against poverty during the

last two decades. Poverty is measured by different methods; but the Cost of Basic Needs (CBN) method. Some terms are used to mention the poverty trends which are given below:

CBN (Cost of Basic Needs): Which means the cost of basic needs method is using as the standard method for estimating the incidence of poverty since 1995-96 in Bangladesh Bureau of Statistics.

Lower Poverty Line: Which means the extreme poor households are those households whose total expenditures on food and nonfood combined are equal to or less than the food poverty line.

Upper Poverty Line: Which is estimated by adding together the food and nonfood poverty lines. The moderate poor households are those households whose total expenditures are equal to or less than the upper poverty.

The Head Count Rate (HCR) of poverty: Which provides the estimate of the percentage of people living below the poverty line as a share of total population.

The Poverty Gap (PG): Which estimates the depth of poverty of the population.

The Squared Poverty Gap (SPG): Which measures the severity of the poverty.

Trends in Head Count Rates of Poverty, 1991-92 to 2010

From the table above it can be depicts that in both national and rural areas head count rates of poverty gradually decreased from 1991-92 to 2010 in both upper and lower poverty line. But, unlike rural and national in the urban areas poverty line also decreased with and exception in 1995-96.

Source: Bangladesh Bureau of Statistics, Various HES/HIES

Trends in Headcount Poverty Rate (%) in Accidence with Five Year Plans

Even in accidence with five year plans in both national and rural areas head count rates of poverty gradually decreased from FY-74 to FY-10 in both upper and lower poverty line. But, unlike rural and national in the urban areas poverty line also decreased with and exception in FY-96.

Trends in Depth and Severity of Poverty in Bangladesh

As like as head count rates of poverty in both national and rural areas poverty gap and squared poverty gap gradually also decreased from 1991-92 to 2010 in both upper and lower poverty line. But, unlike rural and national in the urban areas poverty gap and squared poverty gap also decreased with and exception in 1995-96.


Year 1991-92 1995-96 2000 2005 2010Poverty Gap (%)

National 17.2 13.3 12.9 9.0 6.5Rural 18.1 14.5 13.8 9.8 7.4Urban 12.0 7.2 9.5 6.5 4.3

Squared Poverty Gap (%)National 6.8 4.8 4.6 2.9 9.0Rural 7.2 5.3 4.9 3.1 2.2Urban 4.4 2.5 3.4 2.1 1.3

Trends in poverty (head count rate), CBN method, by division (2005-

2010)


Trends in poverty (head count rate), CBN method, by division

(1995-2005)


Trends in Poverty and Squared Poverty Gap, by division


Household Monthly Income, Expenditure and Food Expenditure

Years of Survey

Household Monthly Income

Household Monthly Expenditure

Household Monthly Food Expenditure

National

Rural

Urban

National Rural Urba

nNation

al Rural Urban

2010 11479 964

81647

5 11200 9612 15531 6031 5543 7362

2005 7203 609

51046

3 6134 5319 8533 3209 3023 3756

2000 5842 481

6 9878 4881 4257 7337 2477 2300 3175

1995-96

4366 3658 7973 4096 3473 7274 2323 2137 3276


Trends in Income Inequality of Bangladesh

Income Inequality/Year

2000 2005 2010

National 0.451 0.467 0.458Urban 0.497 0.497 0.452Rural 0.393 0.428 0.431Source: Bangladesh Bureau of Statistics , Different HIES

The Gini co-efficient is the most popular composite indicator that summarizes the extent of concentration (inequality) of household income. Gini co-efficient of income has increased from 0.393 in 2000 to 0.430 in 2010 at rural areas with the growth rate of 0.94 percent, whereas it has decreased from 0.497 to 0.452 at the same period in urban areas with the growth rate of -0.91 percent. Gini co-efficient of income has increased from 0.451 to 0.458 at national level and the growth rate is 0.16 percent during the same period. The Gini co-efficient of income has decreased at national and urban level over the last five years (2005 to 2010) while it has slightly increased in rural areas during the same time.

Causes of High Poverty Rate in Bangladesh

The Daily Star, 2006) also indentified some causes of high poverty rates in Bangladesh:

Overpopulation: Overpopulation is defined as the situation of having large numbers of people with too few resources and too little space. Poverty can also depend on the country's mix of population density and agriculture productivity.

High birth rates: High birth rates contribute to overpopulation in many developing countries. Children are assets to many poor families because they provide labor, usually for farming. Cultural norms in traditionally rural societies commonly sanction the value of large families.

Illiteracy and lack of Education :Illiteracy and lack of education is common feature of our rural area. Most of the rural people are unable to read and write as a result they are not conscious about modern technology which is very necessary for more production in agriculture.


Sessional Unemployment: Periodic unemployment created by seasonal variations in particular farming which are affected by the weather. As a result the rural people have no work in half of the year like Monga area people of Bangladesh.

Low Wage: In the rural area comparatively the rate of wage is low than urban. A labor can earn about 2000-3000 per month which is not sufficient for a rural family. At present price hike is a serious problem and the rural poor are the victims.

Natural Disaster: Natural disaster is the common picture of our country. Every year our country is affected by the natural disaster. The rural farmers are more affected by the natural disaster like river erosion, cyclone, tidal surge, excessive rain and others.

Death of Chief Wage-earner: Most of the families are one man dependent or wage earner becomes single so when he/she died the family face severe economic problem and at last fall into poverty.


Largeness of Family: Though birth rate is high in rural area than urban so the size of family is large in rural area. Through the sufficient income it is quit impossible to lead a family with 6-7 members. It is one of the major causes of rural poverty.

Dowry: Dowry is a social problem and it is severe in rural area. Especially among the rural poor it is curse. Due to dowry process sometime it needs to sell the property as a result they lost their source of income.

Illness and Injury: Anyone can be affected by illness and injury and if he/she becomes the earning member of the family it will very harmful for the family especially for the rural poor family. And it is very common feature of rural poor because they have less access of medical facilities.

Debt: Debt is curse for rural poor people because they take debt from rural Mahajon or rich person with high interest. When they are unable to pay the debt, the interest of it rises day by day and at a time the amount become double or more and as result they are bound to sell their property.

Causes of High Poverty Rate in Bangladesh Crop Damage: Every year due to natural disaster the

agriculture of rural area are hampered very much. Every year their crops are damaged by the natural disaster or others which are the important cause of rural poverty.

Lack of Land: In our country about 20% people are the owner of 80% land and 80% people hold only 20% land. Most of the poor have no personal land. They cultivate others land with share but they are deprived from their part of profit.

Price Rise of Agricultural Instruments: The continuous and steep price rise of agricultural instruments has added to the miseries of poor.

Low Productivity in Agriculture: The level of productivity in agriculture is low due to subdivided and fragmented holdings, lack of capital, use of traditional methods of cultivation, illiteracy etc in our country.

Shortage of Capital and able Entrepreneurship: Capital and able entrepreneurship have important role in accelerating the growth. But these are in short supply making it difficult to increase production significantly in our rural area as a results they are unable to produce good production in agriculture.

Causes of Poverty Reducing at a Slower Rate in Bangladesh

Social Relationship: Poverty is a part of social relationship. The poor are remaining poor due to the structural reasons. People belonging to the lower class of the society are not allowed to be associated with the upper class in anyway. Hence, even if income poverty scenario may be changed, social poverty remains unchanged due the structural reasons (Unnayan Onneshan, 2011).

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 (Unnayan Onneshan, 2011).

Traditional Agriculture: Bangladesh is a agriculture dependent country and about 80% of rural population are closely related with agriculture but they have very few knowledge about modern technology which is used for more production (Unnayan Onneshan, 2011).


Shortfalls in Public Expenditure for Capabilities Enhancements: The public expenditure in in education, health and housing capabilities has always been less than the required level which has a bearing on the poverty (Unnayan Onneshan, 2011).

Inadequacies in Regulatory Regimes: The system of accumulation in Bangladesh is principally primitive in nature. Such accumulation is omnipresent, particularly in cases of access to, and control over, natural resources, common property resources, and subsidies of state resources. The bias created in favor of rich and powerful could be somewhat lessened by regulatory regimes, giving access to and control over, such resources to the poor (Unnayan Onneshan, 2011).

Policy Incoherence and Lack of Complementarity: Poverty may also increase due to the lack of maintaining coherence and/or complementarity in policies and implementation. For example, the tax system of the country is regressive and bias in favor of rich. While the inflation is cropping up, there are not adequate policies to offset the income erosion of the poor (Unnayan Onneshan, 2011).


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, it remains difficult for the poor to enjoy the basic necessities and graduate out of poverty.

Expanding Population, Failing to Harness Population Dividend: Excessively high population densities put stress on available resources. However, the bulk of the population is of working age, which provides an ample opportunity to harness population dividend (Unnayan Onneshan, 2011).

Environmental Degradation and Climate Change: 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 (Unnayan Onneshan, 2011).

ConclusionThe eradication of poverty and inequality and meeting

of basic needs are the primary goals of the government.

The present government of Bangladesh is very much hopeful in achieving the target of Millennium Development Goals (MDGs) as well as the targets of Vision-2021 related to poverty and inequality.

Although Bangladesh has achieved progress in poverty reduction, there is widespread poverty at the national and regional levels and there are variations in poverty levels between rural and urban Bangladesh.

So, NGOs and other welfare organizations must come beside the government to reduce both rural and urban poverty from the country finding out sources of foreign grants and aid as well as multidisciplinary action planning.

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