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Poverty Alleviation
Poverty wanes, but pace not
enough to meet goal
UNDP study shows the poverty decline by 1 percentage point a year
 The population living below
the poverty line declined by one percentage point a year in the 1990s
and came down to 40 per cent by 2000, but it is not enough to achieve
the millennium development goal (MDG), a UNDP study said. "The reduction
of poverty that took place in the 1990s -- at the rate of about one
percentage point per year -- was certainly modest by the standards of
East and South-East Asia in the last few decades," the study said,
urging policy-makers to support growth in non-tradable sector. Finance
and Planning Minister M Saifur Rahman launched the study, the
Macroeconomics of Poverty Reduction -The Case Study of Bangladesh, at
the IDB Bhaban in Dhaka yesterday. The pace of poverty reduction
accelerated in the 1990s compared to the 1980s, the United Nations
Development Programme study said. The population living below poverty
line dropped from 52 per cent in 1983-84 to about 50 per cent in
1991-92, but then fell relatively sharply to about 40 per cent by 2000,
it explained.
The proportion of population
living below the poverty line was as high as 71 per cent in 1973-74, the
earliest survey year after Bangladesh's independence. If recent gains
in poverty reduction are to be consolidated in Bangladesh, policy-makers
must support growth in 'non-tradable' sectors like small industries and
invest in opportunities for the rural poor, the study added.
The report found most of the incremental growth in the 1990s originating
from what economists call the 'non-tradable' sectors, mainly services,
construction and small-scale industry, a fact confirmed by the changing
composition of the labour force -- from farm activities to 'non-farm'
activities. The driving forces behind this growth were acceleration in
crop production, readymade garment industry and workers' remittances.
Crop was by far the biggest driving force.
"Bangladesh has done well in growth, poverty alleviation and in social
sector development. Poverty reduction by one percentage point is good,
but not enough," said Wahiduddin Mahmud, professor of economics at Dhaka
University and a member of the study team at a briefing.
"If it continues in this pace, it would not be possible to achieve the
millennium development goal (MDG)." "In human development, Bangladesh's
position was second next to China. We have done well in dissemination of
the ideas of immunization, birth control and child mortality," he added.
"We have to improve our poverty alleviation and social indicators
further to sustain at this level."
Governance is a big problem in many areas, he said. Citing the example
of child mortality rate, Prof Mahmud said: "If we want to reduce the
rate further, we have to improve the health sector and it is not
possible to bring about a qualitative change without good governance."
Jorgen Lissner, UNDP resident representative in Dhaka, and Binayak Sen,
senior research fellow at the Bangladesh Institute of Development
Studies (BIDS), were also present at the briefing. In order to benefit
the poor -- who comprise nearly 40 per cent of the Bangladesh population
-- the incentive structure generated by macroeconomic policy must strike
a balance between tradables (such as export production) and non-tradables
(such as services and construction), the study said.
Otherwise, the demand-driven pattern of growth that succeeded in
reducing poverty during the 1990s will come to a halt, to the detriment
of the poor, it added. The poor must be equipped with adequate human
capital, especially in terms
of education and health, if they are to take advantage of the
opportunities to be opened up by pro-poor macroeconomic policy.
Budgetary spending must be increased, it added. The study was prepared
by a group of eminent national and international economists and is part
of a regional initiative between national governments and UNDP to seek
alternative policies for poverty reduction.
In Bangladesh, the study analysed the impact of macroeconomic (fiscal,
monetary and exchange rate) and adjustment policies (trade, finance and
privatisation) on growth and poverty. Binayak Sen said expenditures in
health and education were stagnated. He called for greater investment in
agricultural research to provide more technological support
Source:
The Daily Star
September 30, 2003 |
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