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Dhaka Tribune

Covid-19 shatters Bangladesh's dream of eradicating poverty

South Asian Network on Economic Modeling (SANEM) says Bangladesh's poverty rate may rise to 40.9% due to Covid-19

Update : 16 Jul 2020, 12:13 PM

Experts say the Covid-19 pandemic has dashed hopes of achieving the UN’s 2030 agenda to eradicate poverty through Sustainable Development Goals (SDGs).

 The pandemic has hit Bangladesh’s economy hard and threatens to derail the country’s impressive achievements in poverty reduction.

Economists say it will not possible to achieve the index of SDGs by 2030 amid the slow economic activities in the wake of the pandemic, which has left millions without jobs. 

They called upon NGOs and the rich to come forward alongside the government to stand by the poor to help them cope with the rough situation. 

Millions of new poor

South Asian Network on Economic Modeling (SANEM) says Bangladesh's poverty rate may rise to 40.9% due to Covid-19. In addition to 34 million existing poor, there are another 36 million people who are ‘non-poor’ but can be categorised as vulnerable in case of uplifting the poverty line income by 1.25 times, according to government figures. 

Bangladesh Economic Association (BEA) said nearly 36 million people have lost jobs between March 26 and May 30 during the general holidays. Around 61 million people are currently working in the country’s job market. Nearly 59.5 million people moved into different class structures during this period, of which 25.5 million people became extremely poor, it said. 

According to the latest survey of Bangladesh Institute of Development Studies (BIDS), Bangladesh will have 16.4 million new poor in 2020 as the income of working-class in urban and rural areas has fallen sharply. 

About 13 percent of people have become unemployed due to the pandemic. Under a post-lockdown optimistic scenario, the country’s overall poverty will increase by 25.13%, where rural poverty will be 24.23% and urban poverty will be 27.52%, it said.

 BIDS Research Director Binayak Sen said they ran several scenarios - representing successive severity of lockdown - under the “wealth plus labour status” approach. In a scenario where there is an 80% percent drop in income for the labour class in urban areas and 10% drop in income for the labour class in rural areas in the ‘hard lockdown’ exercise, there would have 16.4 million new poor. 

“If we consider a 25% higher poverty line, then an additional 16 to 20% of the population would be in poverty in rural and urban areas. If we update our age-old poverty line accordingly, it will result in a much higher poverty where rural poverty would be 45%, and urban poverty would be 36%,” he added.

The economist said: “We have two kinds of vulnerability in poverty - one relates to the risk of slippages of the near-poor into poverty, and the other pertains to the risk of slippages of the moderate poor into extreme poverty.” 

Extreme poverty rate rising

According to a recent UN report, Covid-19 has pushed more than 250 million people to the brink of starvation and dashed hopes of eradicating extreme poverty by 2030. The pandemic has ended hopes of poverty eradication by 2030. 

Covid-19 will push 176 million more people into extreme poverty, compounding long-standing neglect of low-income people, including women, migrant workers and refugees. 

Executive Director of the Policy Research Institute of Bangladesh (PRI) Dr Ahsan H Mansur said the poverty rate went up vastly in the country as millions lost jobs. 

“The extreme poverty rate doubled from the existing 10.5% while the poverty rate went up 30 to 35% from the 20.5% as millions of people in the country lost jobs amid the Covid-19 fallout,” he said. 

Dr Mansur said the government must take necessary steps to tackle the situation. Otherwise, it won’t be possible to overcome the situation in the next two years. 

SANEM Executive Director Dr Selim Raihan suggested undertaking some ‘politically feasible’ policy reforms in the areas of trade, tax, banking sectors; explore ways for generating resources (domestic and external) to support the fiscal stimulus and ease monetary policy measures; suspend LDC graduation target by at least three more years; raise voice at the global level to push the SDG target year from 2030 to 2035. 

According to the announcement of the UN, the decline of global extreme poverty continues, but it has slowed. The deceleration indicates that the world is not on track to achieve the target of less than 3% of the world living in extreme poverty by 2030. 

‘Implementing SDG indexes tough’

Talking to UNB, Dr Shamsul Alam, senior secretary and member of the General Economics Division (GED) of the Bangladesh Planning Commission, said several crore poor people can’t work following the Coronavirus fallout. 

“So, obviously, an impact fell in poverty rate temporarily,” he said. 

Citing 2015 data, he said, 25% of the 50 million poor are at risk all-time in Bangladesh because of climate change and other reasons.

 “Now it must further increase in the situation. The number of poor people maybe 60 or 65 million and the percentage will be more than 30,” he added. 

Dr Shamsul Alam said it’ll be very tough to implement SDGs indexes by 2030 due to the impact of Covid-19. 

“Bangladesh is committed to bringing its poverty rate under ‘zero’ level and that means 3% to achieve SDGs by 2030. But it’ll be very tough now to implement due to the impact of Coronavirus,” he said. 

The Ekushey Padak-2020 recipient urged the NGOs and rich people to come forward to help people affected by the pandemic. 

“The government can’t tackle the existing impact of Coronavirus alone. So, NGOs and rich people have to come forward to help the affected the people to overcome the situation,” he said.

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