World Bank in its latest update says that if Bangladesh is to come to be a zero poverty level by 2030, it needs to achieve nine per cent GDP growth every year, or to maintain the present growth rate with more inclusiveness. If we try to maintain both, that is enhancing growth and inclusiveness, in the same run of our national efforts, 2030 would seem to be too remote to wait. Track records of our fighting poverty prove our staying opposite to rhetoric, and it is recognised by the world community and lastly by the World Bank boss Jim Yong Kim. The international extreme poverty line was updated in 2015 to reflect new price data, and while most countries reported updated statistics at that time World Bank did not apply the 2011 PPP for Bangladesh; rather it took extra steps to assess that the 2011 PPP accurately reflected the prices of goods for the people in the country. World Bank estimates the proportion of people living below an international extreme poverty line primarily to monitor global and regional poverty, to allow for comparisons between countries and to track progress towards global goals to end extreme poverty set by World Bank, United Nations and others. National poverty rates are the most appropriate for underpinning dialogue or targeting programmes to reach the poorest in a country. World Bank says "The number of poor in Bangladesh is much lower, but the historical trend is the same." The extreme poverty rate of $1.90 per day (2011 PPPs) was 18.5 per cent in 2010, which corresponds to around 28 million poor in that year. In contrast, the international extreme poverty rate measured at the old line of $1.25 per day (at 2005 PPPs) was 43.3 per cent, which corresponds to an estimated 65.6 million extreme poor. Regarding the line used, however, the declining trend of extreme poverty shows strong progress over the last 25 years. The 2011 PPP conversion factor suggests that the Bangladesh Taka's purchasing power relative to the US dollar in 2011 was much stronger than what the 2005 PPP conversion factor suggested (adjusted for inflation). As a result, Bangladesh's GDP and poverty statistics based on the 2011 PPPs show that Bangladesh is better off in USD terms than previously thought. The poorest 40 per cent of the population not only saw positive per capita consumption growth, but also this grew 0.43 percentage points higher than the per capita consumption growth of the total population during 2005-10. Using this indicator, called the shared prosperity premium, Bangladesh outperformed a number of countries in the South Asia Region (including India, Bhutan and Pakistan). If Bangladesh maintains the average real per capita growth and the pace of poverty reduction observed between 2005 and 2010, the extreme poverty rate in 2030 would fall to six per cent. The average real GDP growth needed to achieve an extreme poverty rate of three per cent by 2030 is around nine per cent per year. If the economic growth benefits more people, particularly the poor, sustaining the growth rate of recent years may be enough to get Bangladesh to three per cent or less by 2030. These are the essence of World Bank's latest update. So we have a success story of sustained efforts of conquering poverty. As we told before, our poverty reduction can be attributed to a combination of number of factors that add up to a story of significant social and economic transformation. The economic transformation is closely related to rapid GDP growth and the urbanisation process in recent times manifested in rising returns to human and physical assets, rising labour productivity and wages, the shift from low return agriculture labour to non-farm employment and growth in export industries. There has been also a consistent increasing flow of remittances (though it has now declining trend). The growth of micro finance is also argued to have some contributions. Equally important are some of the forces that have emerged from social transformations occurring over time. A fall in the number of dependents in a household, linked to past reductions in fertility, has been an important contributor in raising per capita incomes. Also increase in labour force participation and educational attainment, particularly among women, have contributed as well. These factors are influencing the reduction of poverty.
So for reducing poverty or taking it to three per cent (mind it three per cent poverty stay is a very normal phenomenon. Country with zero poverty is non-existent) only, what option World Bank poses. Either to ensure growth level at nine per cent a year or ongoing GDP growth should be made more inclusive. That means more inclusive growth stands for more growth without inequality. Fruits of growth must go to more doorsteps. If inequality could be contained, poverty would stand at its lowest ebb. There is considerable concern in Bangladesh about the growing income inequality. Studies show that the distribution of income is much more unequal than the distribution of consumption. Income inequality as measured by the Gini coefficient for the distribution of income has risen substantially. More recent data show a further increase in the income Gini coefficient from 0.452 in 2000 to 0.458 in 2010 due to an increase in rural income inequality. But spreading of safety measures in different kinds have narrowed down the space of inequality recently that negate the previous data. Nevertheless, the growing income inequality is of a major concern for us. Hence it is a latent threat to inclusive growth. There is a need to address the income inequality through a range of measures including creating better access to high productivity, high income jobs, improving farm productivity and incomes, sharpening the focus on equity aspects of public spending on education, health, family planning, nutrition and water supply, reducing the regional disparity of growth and improving the access of the poor to means of production ( fertiliser, seeds, water, electricity and rural roads) and by improving the access of the poor to institutional finance. For a poverty free society, these are to be addressed to ensure inclusive growth. On the other hand, World Bank identifies some domestic risks to growth and fiscal position include setbacks in implementing reforms affecting the allocation of labour, land and capital, such as the removal of impediments to increasing productivity, security, financial and trade shocks are also the key risks. External shocks include market uncertainty and tightening of global financing condition.r Haradhan Ganguly is a freelance contributor is secretary of United Nations Association of Bangladesh-UNAB. Email: gharadhan@gmail.com Either to ensure growth level at nine per cent a year or ongoing GDP growth should be made more inclusive. That means more inclusive growth stands for more growth without inequality. Fruits of growth must go to more doorsteps. If inequality could be contained, poverty would stand at its lowest ebb
