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Analysis of Poverty Dynamics: Bangladesh Perspective

Ershad Ali Ph.D.
Director
CRIE, Auckland Institute of Studies, St. Helens, Auckland University of Technology, New Zealand

Dayal Taiukder
Lecturer
CRIE, Auckland Institute of Studies, St. Helens, Auckland University of Technology, New Zealand

Abstract/ Executive Summary:

Bangladesh has been striving to alleviate poverty since its independence in 1971. Poverty is one of the major economic problems of this country. Recently the government of Bangladesh, the World Bank, IMF and other international development agencies jointly formulated a national strategy for poverty reduction and prepared a Poverty Reduction Strategy Paper (PRSP) in March 2003 with a view to achieving the goal of poverty alleviation drastically. The above analysis suggests that the dynamics and multi-dimensional aspects of poverty in Bangladesh are based on a complicated structure. Similarly, the causes of poverty are not only related to socio-economic factors such as employment, geography, income distribution and education but also natural calamities. Education or literacy is both the cause and effect of poverty. Low level of national literacy rate reflects the high level of poverty. Similarly, natural disasters deteriorate the poverty situation of the country. Although recently the economy has experienced faster growth than ever in Bangladesh's history, the reduction of poverty is really insignificant, thereby leaving a high level of poverty till now. Therefore, alleviation of poverty has been considered a great challenge for the economy. This challenge is not only one of budgetary allocations and targets but also, more importantly, a challenge of better understanding the dynamics and multi-dimensional characteristics of poverty of Bangladesh. Thus in the near future, accelerating economic growth to 7-8 percent annually as well as a sound economic policy to alleviate poverty and reducing the gap of income between the rich and the poor is regarded as a big challenge for Bangladesh's economy to alleviate poverty substantially.

Keywords: Dynamics of poverty, Poverty, Bangladesh, Poor households, Households

Location: In Bangladesh

Start Date:

End Date:

Program Area: Socio-economic and Policy

Non-commodity: Poverty, Analysis and interpretations

Objectives:

The main objective of this study is to investigate and analyze the dynamics of poverty in Bangladesh.

Methodology:

The multi-dimensional characteristics of poverty explore not only its magnitudes such as extreme poverty, upper and lower poverty lines, etc. but also view poverty as a result of a lack or lowness of multiple resource variables. The main objective of this study is to investigate and analyze the dynamics of poverty of Bangladesh. It is an essential aspect for understanding the analytical concept of poverty not only because it helps map out the causes and multidimensional characteristics of poverty but also facilitates resource allocation and policy formulation. Multidimensional characteristics and causes of poverty are significantly linked with various factors such as income, employment, geography, education, health conditions, access to resources and natural calamities such as floods and cyclones. Ahmed argued that geographical location was an important factor to analyze poverty.' Kam and Bose et al. found considerable variation in the incidence of poverty across the regions of the country. They argued that the geographical regions with the highest incidence of poverty were coastal areas, depressed regions of Sylhet division and the northwest districts of Rajshahi division. There are considerable variations and mobility among the poor." Ali and Begtim et al found similar results. They argued that there was some degree of mobility between poor and non-poor. This mobility worked in both directions- from poor to non-poor as well as non-poor to poor. From the evidence of 64 villages, they have revealed a significant fact that a large number of extremely poor households are trapped in poverty for over generations.' Although, some economists, such as Binayak Sen, argued that less opportunity for access to assets made the poor stay in chronic poverty.' However, this argument can present only a partial analysis of the issue. Even geographical variation matters significantly to understand the poverty of Bangladesh. Moreover, factors like natural disasters (such as floods, cyclones, drought etc), illness and insecurity make the poor more vulnerable. Therefore, this paper contributes to the existing literature by drilling further down in analyzing the poverty dynamics of the economy. The causes and dynamics of poverty in Bangladesh are based on complex scenarios. There are considerable variations and mobility among the poor. Similarly, analysis of poverty depends on its measurements. Bangladesh Bureau of Statistics calculated poverty lines during HIES-2005 on the basis of the Cost of Basic Needs (CBN) method. This study analyzed poverty lines on the basis of CBN methods as used by BBS.' In the CBN method, poverty lines are calculated to represent the level of per capita expenditure required to meet the basic nutritional requirements, including an allowance for non-food consumption. Firstly, a food poverty line is established to calculate the amount necessary to meet the basic food requirement. Then a non-food allowance is added. BBS estimated the food poverty line on the basis of expenditure to meet the nutritional requirement of 2122 kilocalories per capita per day. The lower poverty line corresponds to the extremely poor households whose total expenditure on food and non-food is equal to the food poverty line.' Therefore, a lower poverty line represents a smaller food intake than 2122 kilocalories. Similarly, the upper poverty line adds an amount of typical non-food expenditure (close to food poverty line) of households whose food expenditure is equal to the food poverty line.' Therefore, the upper poverty line corresponds to moderate poor households.

Source of Information: Journal of Third World Studies, Vol. XXVU, No. 1, March 2010.

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The above analysis suggests that the dynamics and multi-dimensional aspects of poverty in Bangladesh are based on a complicated structure. Similarly, the causes of poverty are not only related to socio-economic factors such as employment, geography, income distribution and education but also natural calamities. Education or literacy is both the cause and effect of poverty. Low level of national literacy rate reflects high level of poverty. Similarly, natural disasters deteriorate the poverty situation of the country. Although recently the economy has experienced faster growth than ever in Bangladesh's history, the reduction of poverty is really insignificant, thereby leaving a high level of poverty till now. Therefore, alleviation of poverty has been considered as a great challenge for the economy. This challenge is not only one of budgetary allocations and targets but also, more importantly, a challenge of better understanding the dynamics and multi-dimensional characteristics of poverty of Bangladesh. Thus in the near future, accelerating economic growth to 7-8 percent annually as well as a sound economic policy to alleviate poverty and reducing the gap of income between the rich and the poor is regarded as a big challenge for Bangladesh's economy to alleviate poverty substantially.

Knowledge Management: Journal