Poverty Reduction in Bangladesh: Executive Summary
The Constitution of the People’s Republic of Bangladesh makes sure formulating pro-people development policies. In fact, the constitutional guidelines proceed in a structure that aims at raising the quality of life through equitable growth. That’s why Bangladesh, in the past two to three decades, undertakes a number of planned strategies and policies in order to Poverty Reduction in Bangladesh from the country. Consequently, to lift up the poor section in society, Bangladesh is now enhancing the social protection actions which would impact on poverty reduction.
Bangladesh welcomes nearly 162.70 million population (Bangladesh Economic Review-2018). People live in under the poverty line is 24.3% while 12.9% of people live under the extreme poverty line. As a result, the severity of poverty is the real fact. Poverty Reduction in Bangladesh, therefore, gets a high emphasis on its development activities. For a long time, Bangladesh has been fighting against poverty with a view to improving the living standards of the impoverished people. That’s why Bangladesh has recently made significant progress in poverty reduction. The progress has been possible due to government serious actions, strategies and policies. The present government aims to eradicate hardcore poverty as it aims to make Digital Bangladesh.
Poverty Reduction in Bangladesh: Recent Status
In recent times, Bangladesh regards globally as “The Land of Impossible Attainment” for eradicating poverty and extreme poverty. Bangladesh has already achieved the Millennium Development Goals (MDG) targets in poverty eradication. The international community has been appreciated highly for success in this respect. In 2009, in Bangladesh, where nearly 50 million people were poor. 28.8 million people of which were living in under hardcore poverty. In the past term of the present government, the number of poor and hardcore poor were decreased by about 38.05 million and 15.07 million respectively. A number of hardcore poor have lifted up from the poverty line over the last 22 years. In fact, there is a landmark success that 45% of hardcore poor were pulled out from the poverty line within the last five years.
Government Actions, Policy & Strategy
Bangladesh government, during the last three decades, undertakes a large number of actions, policies and strategies to address the country’s poverty. The government also do best to remove the inequality from the country. Therefore, they operate “Social Safety Net Programme”, put greater importance on education. Moreover, improving voice and access to information, social protection, poverty reduction in Bangladesh, direct and indirect services etc.
Social Safety Net Programmes
Safety net programmes are very operational. That’s why the developing countries show interest in Social Safety Net Programmes. Bangladesh operates safety net programmes in two contexts. Firstly, food rations. Secondly, post-disaster relief. Not only that but also there is a third factor in where Bangladesh address informal safety nets. For example, in the issues of the demographic and social shocks at family and community level. There also has a pension scheme for government employees.
Household Income and Expenditure Survey 2010 reported that the Bangladesh government covers 24.57 per cent of families in social safety net programmes. These programmes also provide with benefits for 30.12 rural areas families.
To eradicate poverty, programmes group the spending area into two services. Firstly direct services and second, indirect services. Safety net Programmes are designed in such a way that the poor would benefit the best. Thus, poverty reduction in Bangladesh will get a speed.
Poverty Reduction Policy & Strategy
Bangladesh puts a special emphasis on the Social Safety Net Programmes to accelerate the poverty reduction process. At present, the country is very close to the “National Social Protection Strategy” (NSPS). During the same time, Bangladesh has been preparing a list of extreme poor as well as a “National Population Registrar” to identify accurately the beneficiaries of Social Safety Net Programmes. Recently, the Bangladesh Government follows the four basic principles to formulate different Social Safety Net Programmes:
- Enhancing the capacity of the ultra-poor to face poverty by providing them with special allowances
- Creating employment and self-employment opportunities for the hardcore poor through micro-credit operations
- Ensuring food security for the hardcore poor by providing food assistance free of cost or at a nominal cost
- Creating capacity for the hardcore poor to deal with poverty by providing them with education, training and healthcare services
Struggling with Poverty & Vulnerability Through Social Protection
The root causes of poverty in Bangladesh include vulnerability, social exclusion, want in assets and Income Inequality in Bangladesh etc. The major problems in Bangladesh for the mass people is life risks and vulnerability. The government try to meet up the basic needs of the people through social safety net programmes with a view to poverty reduction in Bangladesh. For example, food, housing, education and health. The most important programmes under SSNPs are Vulnerable Group Feeding (VGF), Vulnerable Group Development (VGD), Food for Works (FFW), Old-Age Allowances and so on. Women, children and disabled people get priority under these programmes.
The SSNPs go broadly into two categories.
(1) Social Protection
(2) Social Empowerment
Programmes are implemented through both the development budget and non-development budget. Social protection mostly encompasses cash transfer allowances; cash transfer (special), food security, new funds for programs. On the other hand, social empowerment includes stipends, housing and rehabilitation, micro-credit, miscellaneous funds, development programs etc.
In fact, the Government of Bangladesh maintains a variety of social safety net programmes designed to address basically transient food insecurity stemming from shocks. The most prominent Social Safety Net Programmes of the Bangladesh Government include;
- Vulnerable Group Feeding (VGF)
- Open Market Sales (OMS)
- Cash for Work (CFW)
- Food for Work (FFW)
- Vulnerable Group Development (VGD)
- Gratuitous Relief (GR)
- 100 days employment guarantee scheme.
In addition, for better-combating poverty, the budgetary allocations for the SSNPs have shown an increasing trend, the percentage shares of SSNPs in the national budget and GDP have been declining since 2010-11.
|% of Budget||
% of GDP
Income Distribution & Inequality
Indeed, the growing income inequality is a considerable concern for Bangladesh. Above all, results show that the distribution of income is much more unequal than the distribution of consumption. Though not so much, there is an inclination towards addressing the income inequality problem through a range of measures including creating better access to high productivity, income-generating jobs; improving farm productivity and incomes; sharpening the focus on equity aspects of public spending on education, health, family planning; nutrition and water supply; reducing the regional disparity of growth; and improving the access of the poor to means of production (fertilizer, seeds, water, electricity and rural roads); and by improving the access of the poor to institutional finance.
Direct and Indirect Services
As per the policy of The Ministry of Finance Direct Services address income poverty. Direct Services would include the social safety net programs, income and employment generating programs that directly target at the poor. In other words, the services will benefit the poor the most. Direct services are designed and targeted at the poor and, hence easy to identify and prioritize to poverty reduction in Bangladesh.
- Old-Age Allowance Scheme (OAAP)
- Allowance Scheme for Widowed and Distressed women
- Rural Maintenance Program (RMP)
- Rural Infrastructure Development Program (RIDP)
- Food/Cash for Works
- Test Relief (TR)
- Gratuitous Relief (GR)
- Vulnerable Group Feeding (VGF)
- Vulnerable Group Development (VGD) programs for the hardcore poor
- Food Security Enhancement Initiative (FSEI)
- Rural Social Service (RSS): micro-credit and training program
- Urban Social Service: small credit and training program
- Rural Mother Centre (RMC): microcredit and training program
- Programs for Acid Burnt Women and the Physically Handicapped
- Funds to assist victims of natural disasters
- Honorarium scheme for insolvent freedom fighters
- Funds for retraining/reemployment of voluntarily retired or retrenched workers
- Funds for programs to generate employment for people in extreme poverty
- Salaries and benefits paid out to Grade IV employees
- All micro-credit programs
- Spending on programs to generate employment for unemployed youths
- All programs/activities providing cash assistance, housing for the homeless, etc.
- All programs/activities targeted at poor women and children
Direct Services: Address Human Poverty Reduction in Bangladesh
- Primary Education Stipend Program (PESP)
- Female Secondary Stipend
- Secondary School Assistance Project (FSSAP)
- Targeted Social Investment Spending
- Programs promoting primary and mass formal/informal education
- Programs promoting vocational/technical training/education
- Spending for sanitation and safe water supply including arsenic mitigation
Indirect Services: Growth-Oriented
Services will include spending on overall infrastructure development including roads/highways, electrification, modern agriculture etc. These services are not directly pro-poor in appearance but, rather pro-growth in nature.
- Building on roads/highways/bridges/structures for public use, including link roads
- Allocation to local governments for development programs
- Construction/expansion of building facilities for school
- Developing/building/maintenance of rural infrastructure
- Spending on railroads/bridges/culverts
- Flood rehabilitation programs
- Development of rural/cottage industries
- All agricultural development expenditures including in agro-forestry, flood protection, high-yield varieties of food grain, char development and horticulture expansion programs, etc.
- Allocations as development assistance to Upazilas, and Zila-Parishads
- Construction/repair/rehabilitation of river ports/terminals/ferry ghats
- Development of ICT infrastructure
- Construction/expansion of building facilities for schools
- Construction and repair of water and sanitation facilities, etc.
Indirect Services: Address Human Poverty Reduction in Bangladesh
- Spending on construction, repair/renovation of primary/secondary schools
- Flood rehabilitation programs
- Programs to combat not-communicable diseases
- Programs to enhance administrative/institutional efficiency and capacity
- Allocations as development assistance to Upazilas, and Zila Parishads
- Spending on disease control activities
- Bangladesh Economic Review (2017). Economic Advisers wing, Finance Division, Ministry of Finance
- Household Income and Expenditure Survey (2016). Bangladesh Bureau of Statistics, Ministry of Planning
- BBS (2015). Statistical Yearbook of Bangladesh. Bangladesh Bureau of Statistics, Ministry of Planning