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Poverty eradication-MDGand Bangladesh
OF the.eight Millennium Development Goals (MDGs), the principal goal is to eradicate extreme poverty and hunget The other goals are its concomitants and facilitators. In this article I intend to examine what the poverty and hunger eradication MDG implies and what are the prospects of the targets set under it bgifM. realised in Bangladesh.The 'fin^Sht are to: (a) halve between 1990 and 2015. the proportion of peoplewhoseincorneisless thanSl a day. and (b) halve, between the 1990 and 2015, the proportion of people who suffer from hunger The dollar used here is US dollar, adjusted for purchasing power disparity (PPP). The PPP US$1, as estimated for a country, has the same purchasing power in the concerned domestic economy in this case Bangladesh.asUSSl has in theUnitedStates.
In Bangladesh,as reported in the UNDP Human Development Report 2005,thepercapitaGDPinPPPUS$ is 1,770 as of 2003, against a per capitaGDPinUS$of376inthatyear. Accordingly the PPP USS 1 is equivalent to US$0.21, i.e. 21 US cents for Bangladesh. Given the current exchangerate between theUSdollar and the Bangladesh taka at about taka65toonedol!arin that year, the taka value of 21 US cents, or of PPP USSl.is 13.5. Therefore, thepoverty reduction target of halving the proportionofpeoplewhoseincome is less than PPP USS 1 a day implies that the proportion is on less than Tk. 13.5 a day. What proponion of Bangladesh population was at that levelofpovertyin 1990?The Bangladesh Progress Report on the MDGs, prepared by the Government of Bangladesh and UN Country Team in Bangladesh in February 2005, talks of 59.8 per cent of tire population being below. PPPi US31 as of 1991/92, with the proponion targeted for 2015 being 29.4. This poverty ratio as of 1991/92 was estimated by Bangladesh Bureau of Statistics and World Bank on the basis of cost-of-basicneeds (World Bank, Bangladesh: Development Policy Review2003).
I don’t know if it reflects the PPP
US$l-based poverty ratio as well. Anyway in order to achieve the target of 29.4 per cent by 2015, it would have been necessary to reduce poverty by 2.2 per cent per annum during 1991/92-2015. But, so far the achievement has been about one percentage point or about 1.7 per cent per annum. Therefore, a backlog has accumulated. Assuming that the one percentagepoint poverty reductionper annum achieved during the 1990s has continued up to 2005, the poverty ratio in 2005 would be 46 per
cent. In order to achieve the poverty target of 29.4 per cent by 2015, an average annual reduction of 3.6 per cent would be needed for the remaininglOyears.
Ifwetakethefigureof40percent, as shown in the 2005 Bangladesh Economic Review of the Ministiy of Finance, being poor in 2004 on the basis of inadequate calorie intake (i.e. those not accessing 2,122 Kcal/person/day on average) and set the target of reducing this pro-portiontohalfor20percentin2015, the required annual reduction rate would be 4.5 per cent during 2004-2015. The proportion of those who do not have access even to 1,805 Kcal per day, which is an extremely debilitatinghuman experience: has beenfoundtobe 19pcrcentin2004, and reducing it to half (i.e. 9.5 per cent) by 2015 would require an annual reduction rate of 4.5 per cent.
World Bank's World Development Indicators 2004 shows that 36 per cent of the population of Bangladesh was living on less than PPP USS 1 perday in 2000. If the target set for 2015 is to reduce this proportion >by. half (Ee to 18jper rhe lannudl averagd' reduction' rate ‘ Iwould work out at 33 per cent during 2000-2015. But. given the failure to achieve that kind of poverty reduction between 2000 and 2005, the required rate for the remaining years hasgoneupsignificantly
Thelatestavaiiabiedraft (asof 12 January 2005) of the Poverty Reduc-tion Strategy Paper (PRSP),
Unlocking the Potential uses 2000 povertyratiosasthebenchmaikand uses two poverty ratios for that year at 50 per cent (accoiding to BBS-World Bank estimate) and 40 per cent (according to Household Income-Expenditure grouped dktribution data), setting the targets for 2015 at 25 per cent and 20 per cent respectively. The implied average annual rate of poverty reductionin both the casesis 3.3 per cent during 2000-2015. But, the failure to achieve that rate during the past five years has caused the
required rateduring2005-2015to go up significantly. The PRSP also indicates a third target of reducing anothermeasure of poverty, labeled extreme poverty which may be considered a measure of hunger to reduce from 19 per cent in 2000 to 5 per cent in 2015, at an annual average rate of4.9 percentduring 2000-2015.This rate has also goneup for the period 2005-2015 due to poor performance over the past five years.
Given all the above mentioned and other available poverty measures from different sources Boating above, it is crucial that a consensus is reached by all concerned, certainly within the government as to what is the target for poverty reduction against what benchmaik value and year. Even the PRSP and the Progress Report referred to above, both government documents talk of different benchmaiks and different targets.
Depending on which poverty ratio with reference to which year, outof thoseindicatedabove, is used as the base, the poverty reduction rate varies between 3.3 percent and 4.9 per cent per annum for the remaining years to 20i5. Even the lowest, 33 per cent, is well beyond the past achievements in Bangladesh. Prospectsofachievingsuch an acceleration in poverty reduction look bleak as economicgrowth does not look like accelerating due to resource and governance (corruption, inefficiencies) constraints and
because the distribution of the growth achieved will continueto be highly inequitable given that neo-llberal free market rules and no effective efforts are afoot to reverse that trend and establishan inclusive society The UN's The Inequality Predicament on the World Social Situation Report-2005 has shown thatdisparityhasbeenaccentuating globally (i.e. between nations) and within nations around the world in the wake of the free matket and globalizationparadigm.
Let us now see what, in Bangladesh, a per day income of Tk. 13.5 means for a person in concrete terms This amount lias to cover the person's food, shelter, cooking facilities, clothing, healthcare, transportation, and other absolute minimum basic necessities. The price of the ordinary variety of rice, the staple food in Bangladesh, is now aboutTk. 18 per kg. Assuming that an average person needs as a basic minimum, 100 grams of rice a day, the cost of rice would be Tk. 7 per day. Then, the person would also require such items as salt, cooking oil. onions, lentils, and at least some vegetables if not fish or any kind of meat or poultry. Fuelwood or kerosene is needed to cook the food. The remaining Tk. 6.5 cannot be sufficient for these items. Obviously, no money is left for any of the other basic minimum needs. Therefore, one PPP US$1 fixes the income per person per day for poverty reduction purposes at an ignominiously low level. And, yet over four million people of Bangladesh (about a third of the total population) are today in that category of poor. The target is to raise half of them to a per person/day income of above PPP US$ 1 or above Tk.13.5 by 2015, assuming that Tk.13.5 remains valid in real terms ft>rtheperiodto2015.
. The question is: by how much above? If one is able to secure four, five, or even ten taka more a day to spend, would that make a difference in respect of their poverty? Hardly. They will in fact remain virtually in the same rudimentary plight. Therefore. the target setting with reference to PPP US$1 k meaningless to the concerned people, to say the least It is in reality an irrelevant, even cruel proposition; and yet it seems clear that even the target so set will not to beachieved in Bangladesh.
Where do we stand and whereto the society may head is a million dollar (not a PPP one dollar) question under the circumstances, whichwemayignore but only to our peril.
Of. Qari Wioiiquzzaman Arimad is Presdent. Bangladesh Economic Association (BEA), and Chairman, Bangladesh Unnayan Parishad (BUP)