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Poverty reduction for economic development

Dr. Mohammad Mohiuddin Abdullah
The government should take necessary steps for ensuring participation, social inclusion and empowerment of all sections, groups and classes of people to address the challenge of poverty reduction.***
THE impact of economic growth on the pace and magnitude of poverty reduction depends to a large extent on the nature of inequality of income arising from the very growth process. As such, the concept of propoor growth strategy appears to point out the crucial association of growth and inequality on the extent of poverty reduction. Adaptation of "pro-poor" growth strategy is thus favoured over growth maximisation in Bangladesh's planning documents as a means of achieving faster decline of poverty, thereby reducing income disparity.
With poverty alleviation being an area of major policy thrust of the successive governments, this year's poverty figures for Bangladesh have come as a shocker. The figures show that more than 50% of the population are now living below the extreme poverty level. To measure extreme poverty, the amount of income of a person that the poverty researches agreed upon is equivalent to $1.60 per day. The progress made so far is very poor given the emphasis laid on the issue by the different governments and concern expressed by the donors.
In most of the literature on the issue, poverty is looked upon as a kind of ailment. Poverty is a problem isolated from other social conditions within which the affected ones live. Unsurprisingly, poverty mitigating agencies take the affected the people individually and try to help them out through creating job opportunities for them in a piecemeal fashion. Such interventions hardly make much difference in the lives of the people.
Most countries of South and South-East Asia that are now bracketed with the rich nations did not always have such a glamorous status. Poverty was not a stranger to those societies even a few decades back. International agencies, donor countries and governments were active in those countries to lift them out of the curse of backwardness and poverty. If one looks at the history of development of those countries, it would be found that Bangladesh's status vis-a-vis the more successful countries of South-East Asia was not always like this. It is true that Bangladesh has been handicapped by its huge population packed within a small geographical area with few resources since its inception. But in spite of its high population density, the poverty was never as acute as it is now, specially in comparison with newly rich nations.
Bangladesh's GDP growth averaged 5.8% per annum over FY 2006-2010 period. This growth coupled with a decline in population growth rate from 2.5% in 1980,1.8% during 1990-2005 and 1.6% during 2006-2010 has led to a doubling of annual per capita GDP growth from 1.6%, 2.8% and 3.2% during the 1980s, 2000-2004 and 2008-2010 respectively. The country has recorded some of the developing world's most rapid advances in basic human development indicators.
Due to the successive governments' increasing support to the private sector since 1990s through sound macro-economic management and sustained use of public resources to support technological progress in agriculture, rural infrastructure, health and education, combined with progressive policies to ensure community participation and strong partnerships with non-government organisations to deliver grassroots public services, Bangladesh has made a strong start in meeting the MDGs.
A few decades ago, poverty in Bangladesh was primarily caused by landlessness, vulnerability to natural disasters like flood, tidal surge, cyclone and river erosion, and limited opportunities for employment in subsistence oriented agriculture. Since independence, Bangladesh has implemented five-year plans, one two-year plan, poverty reduction strategy and Perspective Plan. The overarching goals of these plans were to accelerate economic growth and poverty reduction. As an outcome of these, Bangladesh has made some progress in terms of reductions of income poverty and human poverty. Micro-finance initiatives, the RMG sector and continued subsidy to rural education have fuelled the increasing participations of women in labour force and their growing economic empowerment. Urbanisation and repatriation of out-of-country remittances have made a positive contribution to poverty reduction.
The objective of the economic as well as national policy of our country is to reduce poverty so as to gradually lift the vast majority of the people above the poverty line and improve the quality life for the average citizens. But low per capita income and institutional deficiencies as well as borrowing from the banks by the government have kept domestic savings much below investment and import requirements, creating a heavy dependence on external loan/savings and foreign remittances.
Because of the present economic crisis and nonimplementation of developmen programmes Bangladesh's position has deteriorated gradually. Human resources are poorly equipped, and lack adequate health care, nutrition, sanitatior housing, education and transport services. Institutional bottlenecks, an acute scarcity of trained manpower and deteriorating state of physical infrastructure have contributed to Bangladesh's difficulties in achieving sustained socioeconomic development. Various poverty alleviation agencies had been very actively pursuing their models to rid the nation of its socio-economic woes. We could not achieve poverty reduction target due to resource constraint and nonimplementation of programmes. Unfortunately, we are still moving at snail's pace, while our eastern neighbours have beaten us in the race for economic development.
Political leaders, government and development scholars should rethink the entire approach to fighting poverty and achieving overall economic development of the society. They should think of effecting a change in the overall socioeconomic conditions within which the "individual poor" live. The government should take necessary steps for ensuring participation, social inclusion and empowerment of all sections, groups and classes of people to address the challenge of poverty reduction. Promotion of meaningful and effective governance by ensuring transparency, accountability and rule of law, and provision of service delivery efficiently and effectively, particularly to the poor, are necessary for implementing the poverty reduction programmes.
As such, achieving the target of poverty reduction as projected, through significant acceleration in the pace of structural reforms, improvement in domestic resources mobilisation, continued promotion of meaningful and effective good governance, concerted efforts by the public and the private sectors with a growing skilled labour force and an already existing capable network of NGOs, as well as a using the talents of the dedicated elements of the public service, it is widely believed that Bangladesh will emerge as a hunger and poverty free country by 2021.
The writer is a former Joint Chief, Planning Commission. Email: dr.abdullah.bd@gmail.com