Recent revelations related to our surge in economic growth have underlined its inter-active engagement with poverty reduction. We have emerged out of the darkness that prevailed post-1972, when nearly 80% of our population lived below the poverty line. We can stand today with our heads held high, having made significant progress in all areas -- social, economic, education, health, and culture, as reflected in the fulfillment of our MDG goals.
On October 25, the Bangladesh Bureau of Statistics (BBS) announced that our GDP in fiscal 2015-16, had grown by 7.11%. This was a significant step forward when compared with FY-14 when it was 6.06% and in FY-15 when it was 6.55%. It may be recalled that the last time GDP growth crossed the 7% mark was in fiscal 2006-07 when 7.06% growth was logged in. Economists at that time however had credited the growth figure to the change in base year.
It has also been disclosed that our per capita income at the end of this financial year 2015-16 stood at $1,465 -- which was $1 less than the provisional data. This lower figure has been attributed to the difference in exchange rate. In fiscal 2014-15, Bangladesh’s per capita income was $1,316.
The Bureau also revealed several other interesting statistics about last fiscal based on constant prices. The agricultural sector has registered 2.79% growth last fiscal, the industrial sector growth was 11.09%, the growth in the services sector was 6.25%, the growth in the fisheries sector was 6.11%, the growth in the mining and quarry sector was 12.84%; and in the electricity, gas, and water supply it was 13.33%.
A financial analyst has pointed out that this increase has been possible because of certain factors:
(a) Increase in growth in wages in the service sector, especially in public administration, education, and health.
(b) Growth in large scale manufacturing, construction, and transport. It may be recalled that industrial activity had earlier suffered due to supply disruptions which weakened consumer confidence in 2014-15.
The BBS disclosures also indicated another significant aspect. During 2015-16, overall imports for the industrial sector grew about 6.5% in dollar terms, mainly due to import of capital machinery required for Power plants, the construction of the Padma Bridge, flyovers, and expansion of industrial units, especially in the garment and textile sector.
Economists have also opined that relative political stability and a decline in the prices of different types of capital machinery in international markets appear to have encouraged entrepreneurs to involve themselves in new ventures and in expanding the paradigm of their existing businesses.
A World Bank report has also pointed out that in fiscal 2015-16, real estate, renting, and associated business activities have played instrumental roles in this context. Property price corrections and lower interest rates on home loans have contributed positively in this exercise.
Bangladesh today, despite isolated scepticism from some economists, on the basis of purchasing power parity (PPP) and these statistics, now stands at the 33rd position among the world economies.
There were also two other revealing reports that were disclosed in the third week of October. The first related to the Global Hunger Index (GHI) which stated that despite improvement in other human development indicators, the International Food Policy Research Institute (IFPRI), in its latest report had ranked Bangladesh 90th among 118 countries.
In 2008, Bangladesh’s score was 32.4 but now it had marginally improved to 27.1. According to this Report Bangladesh is ranked behind Nepal (72), Myanmar (75), and Sri Lanka (84). We are however ahead of India (97), Pakistan (107), and Afghanistan (111).
In Bangladesh, those earning less than Tk1,300 per month are considered to be extreme poor
It may be pointed out here that the GHI score is based on measures of undernourishment, the prevalence of stunting among children and the prevailing child mortality rate. It is clear that we have started to ascend the ladder but our efforts need to be not only more coordinated but more inter-active at the grass roots level, particularly within our Rangpur Division.
The other report issued by the General Economic Division (GED) in Dhaka on October 16 mentioned that despite some improvement, 37.6 million people, almost 23.5% of the total population still live under the poverty line in Bangladesh. Out of them, nearly 19.4 million are extremely poor. This meant that that the rate of poverty has reduced by 1.3% in the last year.
It needs to be understood that poverty is a multi-faceted concept, which includes social, economic, and political elements. Poverty may also be defined as either absolute or relative.
While absolute poverty or destitution refers to the lack of means necessary to meet basic needs such as food, clothing, and shelter -- relative poverty takes into consideration individual social and economic status compared to the rest of society.
In Bangladesh, those earning less than Tk1,300 per month are considered to be extreme poor. This is almost similar to the World Bank’s figure of Tk1,297. It may be added that those who earn less than Tk1,600 are considered to be moderately poor. In 2009, there were about 50 million below the poverty line and that included about 28 million extremely poor people.
Bangladesh has undertaken several initiatives to reduce the manifestation of poverty within the country. In this context, it has also addressed the issue from the point of the rural and urban divide.
The World Bank President JY Kim, during his recent visit to Dhaka, spoke about this matter on October 17. He praised Bangladesh regarding measures undertaken to bring forth accountability and reduction of poverty and then observed that if Bangladesh is to reach the goal of becoming a middle-income country by 2021 and be free of extreme poverty by 2030, it has to sustain its economic growth and also focus on developing energy and transport infrastructure, improve the quality of health care, education and governance, and also strengthen anti-corruption measures.
According to him, this would improve the investment climate. He also reiterated that investment in people was as significant as investment in infrastructure. He then also referred to the fact that Bangladesh was vulnerable to natural disasters and was also having to overcome the challenges of climate variability through adaptation and mitigation. These factors needed to be addressed to overcome the poverty trap. His advice was obviously pertinent for us.
It is clear that we are moving forward -- our upgraded OECD ranking, our record remittance earnings, our soaring foreign exchange reserves, our keeping inflation relatively under control, our surge in export earnings, our decline in dependence ratio, our successes in human development, our augmenting of social protection -- through better education facilities, gender empowerment, and health care opportunities.
However, we also must focus on food security and lifting the quality of life of the poorest of the poor from the many upazillas in our rural areas -- in Kurigram, Barisal, Chandpur, and the Jamalpur Districts and help create a greater balance by removing growing income inequality in our urban areas.
If we can do that, we will definitely be able to meet our 2030 goal of eradicating poverty from Bangladesh.
Muhammad Zamir, a former Ambassador and Chief Information Commissioner, is an analyst specialised in foreign affairs, right to information, and good governance.
