Poverty has significantly reduced in five years since 2000 by 8.9 percentage points to 40 percent, but the rich-poor gap has widened further, according to the latest Household Expenditure Survey (HES), posing a new challenge to policymakers to close the gap.

The Income Gini Co-efficient, a measure to assess income inequality, shows an increase from 0.451 in 2000 to 0.467 in 2005, mostly because of increasing rural inequality. A higher Gini Coefficient reflects a worsening situation for poverty.

Rural Gini Co-efficient increased from 0.393 in 2000 to 0.428 in 2005. Although the urban inequality did not get worse, nei-

ther did it improve. Die urban Gini Co-efficient remained static at 0.497 in the five years.

In fact, inequality in Bangladesh also deepened for the decade since 1990. Die earlier HES showed the coefficient was 0.259 in 1991-92 and it reached 0.306 in 2000. This measure was done by assessment in 14 zones of the country. However, the new HES figure was derived by widening the assess-mentareato 16zones.

The other continued alarming trend reflected irfthe survey is that income share of the lower tier people has decreased while the top 50 percent's increased, widening the gap between the richest and the poorest. It is now clear that 50 percent of the population claims only 20.32 percent of total income. Interestingly, the top 5 percent or

therichest of the tiers also lost their share of income and recorded at 26.93 percent as against the previous survey that showed them to have sharply gained their share of income.

Looking at the consumption pattern, it is found that there was no significant change of Gini Coefficient of consumption expenditure between 2005 and 2000. However, the rural people spent more as their share in expenditure increased from 0.279 to 0.284 on the Gini Co-efficient.

A joint study on chronic poverty in Bangladesh by the Bangladesh Institute of Development Studies (BIDS) and Chronic Poverty Research Centre released Sunday has observed: "It appears that there is a growth-inequality-povcrty

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trade-off. The way out of this situation does not lie in undermining the growth of the dis-equalising activities, but in ensuring that poor people can effectively participate in them. The sources of rising inequality are linked with the uneven spread of economic and social opportunities, unequal

distribution of assets, specially in respect of human capital and financial capital, growing disparity between rural and urban areas as well as between developed and underdeveloped areas. "

Dr Zaid Bakth, research director of the BIDS, said 'unearned' income of a segment of the people has increased over the years leading to non-distribution of income. This is a reason for the rising inequality, he suggested. Also the phenomenon rise of the service sector now accounting for about 54 percent of GDP and a declining agriculture contributing only 17 percent to GDP also resulted in the rising inequality.

Between 1999 and 2004, the poor's income increased 4.8 percent, while it increased 19.4 percent for the non-poor, the preliminary report of the Poverty Monitoring Survey 2004 shows. The rural poor are even worse off where income increased by only 0.54 percent for them against the urban's 7.97 percent.

"The widening income disparity in Bangladesh is explained most

convincingly when we compare the income shares of top and bottom quintiles of the population," a CPD report says. "Between 1999 and 2004, national income attributable to the poorest 10 percent of Bangladesh population declined from the miniscule proportion of 1.7 percent to 1.5 percent. Conversely, the control on the national income by the richest 10 percent of the population increased from 33.9 percent in 1999 to 36.5 percent in 2004."

In other words, the income difference between the poorest and the richest increased from 20 times in 1999 to 24.5 times in 2004. Not only this, urban-rural income difference also continually increased up to the mid-1990s, and this trend was only reversed in the later half of the 1990s with strong agricultural growth.

"Overall, it seems that Bangladesh is precariously positioned in the growth-inequality link as in the initial stage of the Kuznets process," Dr Wahiduddin Mahmud told The Daily Star in an earlier interview. "The problem assumes special significance in a situation whereby the very process that brings some initial dynamism in the system, also contains factors that lead to deterioration in the distribution of income.”