Despite big drop in poverty, over 4cr still poor in country: Study  

Around 80% of people in Bangladesh lived below the poverty line in 1972, but according to the latest Household Income and Expenditure Survey data of the Bangladesh Bureau of Statistics (BBS), the rate dropped to 24.3% in 2016.

In a span of half a century, the poverty rate fell by 55.7 percentage points, but the number of poor people fell by only two crore.

The data shows that the number of poor people in the country was 5.92 crore in the year after independence. But around 3.89 crore people are still below the poverty line.

Economists and experts believe that 50 years of success in poverty alleviation disappeared as at least two crore people have moved below the poverty line due to the Coronavirus pandemic as per the projections of various organisations.

They said a significant share of four crore people engaged in informal employment lost their jobs due to the pandemic but before their full recovery, the prices of all kinds of products increased at an abnormal rate due to the war between Russia and Ukraine.

As a result, people's income has decreased and the local currency has also depreciated, pushing many lower and middle-income people below the poverty line.

The Sustainable Development Goals (SDGs) announced in 2016 aim to eradicate global poverty by 2030. And in the given plan, the Bangladesh government wants to eliminate extreme poverty by 2031. This goal is not being met due to various reasons including the effect of the pandemic, the Russia-Ukraine war, and the lack of expected GDP growth due to lower investment revealed by a study by the Bangladesh Institute of Development Studies (BIDS).

According to the study, recovering from the impact of Covid-19 and the ongoing global crisis, Bangladesh has to achieve 8.91% economic growth to eradicate poverty. As the economy is not in line to achieve such growth, the eradication of poverty would not be achieved even in 2035.

The South Asian Network on Economic Modeling (Sanem) Executive Director Dr Selim Raihan conducted a study titled "Macro-economic Outlook for Bangladesh over 2020 and 2035" on behalf of the BIDS.

He told The Business Standard that the economy is at substantial risk due to the global crisis caused by the war between Ukraine and Russia prior to recovering from the impact of Covid-19.

There are also some traditional challenges like lower investment, high cost of business due to the absence of a proper business environment, lack of governance and lower level skills among the labour force.

Dr Zahid Hussain, a former lead economist of the World Bank, said, "As the number of poor people increases with the increase in commodity prices, the extent of poverty of people who are already below the poverty line also increases."

According to the Bureau of Statistics, the poverty gap in Bangladesh in 2016 was 5%. That means the average income of the poor was 5% below the poverty line. Now if the prices of goods increase, the poverty line will go up, further increasing the poverty gap, he said.

"In summary, the non-poor people are getting poorer because of the global crisis before they can recover from the pandemic and the poor are getting poorer," he added.

When asked, Dr M Abu Eusuf, a professor of the Department of Development Studies at Dhaka University and executive director of RAPID, said when the prices of essential goods increase, the rate of poverty also increases.

He said that the number of people who are slightly above the poverty line in our country is very high. The number of poor has increased by 25% due to the increase in commodity prices.

In the Household Income and Expenditure Survey conducted by the Bureau of Statistics in the fiscal year 2016-17, households spending less than Tk1,862 per capita on food per month were classified as ultra-poor and those spending less than Tk2,268 as poor.

As the prices of essential goods have already increased by 40%, the lower poverty line has been raised to Tk2,600 and the poverty line has been raised to Tk3,500. Although the families who were above the poverty line earlier will now be considered poor.

A study by BIDS Director General Dr Binayak Sen found that if the price level rises by 25% for any reason, 16-20% of the country's people will be considered poor again.

If the poverty line is updated in line with middle-income countries, 45% of the people in rural areas and 36% in urban areas will fall into the ranks of the poor, he said.

Binayak Sen told TBS the tentative impact on the number of poor people due to economic shock has come up in this research. However, it will not be possible to find out the number of new poor people based on the research conducted on the basis of the 2017 survey.

Dr Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM) and former director general of BIDS, said, "Due to slower growth of income disproportionate to inflation, many families cannot spend on nutritious food and medical treatment. As a result, the health and nutrition situation is deteriorating."

Again, many are forced to stop their children's education to limit expenses. As a result, the development of human resources is being hindered, he said, adding that it will have a significant negative impact on income and poverty alleviation in the future.

The International Day for the Eradication of Poverty for 2022-2023 is being celebrated worldwide on Monday (17 October) amid the increasing number of poor people. The theme of this year is – Dignity For All in Practice. Apart from Bangladesh, almost all the member countries of the United Nations are taking various programmes to mark the day.