Bangladesh Reduced Number of Poor by 16 million in a Decade
June 20, 2013
DHAKA, June 20, 2013: Bangladesh has made remarkable progress in reducing poverty from 2000 to 2010. The country witnessed steady and continuous decline in the number of poor people over the decade—from nearly 63 million in 2000 to 47 million in 2010. Despite a growing population, the number of poor people declined by 26 percent in 10 years. Poverty declined by 1.7 percentage points per year. The series of external shocks that affected Bangladesh in 2007 and 2008 did not significantly slow down the speed of poverty reduction.
A new World Bank report ‘Bangladesh Poverty Assessment: Assessing a Decade of Progress in Reducing Poverty, 2000-2010’ launched today says during the period 2000-2010 poverty reduction was closely linked to the growth in labor income and changes in demographics. Labor income, both formal and informal, was the dominant factor in higher incomes and lower poverty rates. Fertility rates have been steadily dropping over the last several decades which have resulted in lower dependency ratios and more income per-capita. The second half of the 2000s saw an escalation of real rural wages but the growth of urban real wages was lackluster.
‘Against the odds, Bangladesh lifted 16 million people out of poverty in the last 10 years and also reduced inequality; that is a rare and remarkable achievement.’ said Johannes Zutt, World Bank Country Director for Bangladesh. ‘Bangladesh now needs to help a growing population of young adults to obtain the skills and education needed to find productive work and to participate fully in Bangladesh’s social and political life. The World Bank remains committed to working with the Government to help all Bangladeshis escape poverty and share in the country’s growing prosperity.”
The living conditions of the poor also improved in the first decade of 2000. Between 2000 and 2005, a large number of households saw an improvement in terms of the materials used in the constructions of their homes and access to services. Between 2005 and 2010, while the poor continued to improve the quality of their homes, the largest improvements for all households were in terms of the amenities households owned such as television sets and cellular phones.
While overall improvement in wellbeing can seen across all regions, poverty continues to be a daunting problem with about 47 million people still living in poverty and 26 million people in extreme poverty. Poverty in rural areas continues to be more pervasive and extreme than in urban areas, whereas urban areas remain relatively more unequal.
“For sustained poverty reduction, Bangladesh needs coordinated multi-sectoral action. To maintain steady growth in income, it will be necessary to promote investments to raise agricultural productivity and also to promote more jobs in manufacturing and service sector.” said Dean Jolliffe, Senior Economist, World Bank and co-author of the report.
From 2000 to 2005, the East (Chittagong, Dhaka and Sylhet) was rapidly improving, while the West (Barisal, Khulna and Rajshahi) had been lagging behind. The poverty pattern changed in the next five years. Between 2005 and 2010, Western divisions experienced larger reductions in poverty and also managed to reach levels of poverty that are closer to those of their Eastern counterparts.
A growing share of women in the labor force contributed to poverty reduction, but further increasing their participation remains a challenge. The labor force participation rate of women, though increased from 25 percent to about 35 percent over the decade, still remains low by international standards.
“Bangladesh spends over 2 percent of its GDP on safety net programs but reaches only a third of the poor. Bangladesh needs to focus on improving the linkage between safety nets and poverty reduction through improved design, targeting and timing of safety net responses. For example, the large number of cash allowances could be linked to human capital formation and targeted to the poor. ” said Iffath Sharif, Senior Economist, World Bank and co-author of the report.