50 YEARS OF INDEPENDENCE Poverty reduction goes up, then slows down

The acceleration of gross domestic product lost momentum considerably slowing down the rate of poverty reduction ahead of the golden jubilee of the country’s independence amid the lingering COVID-19 pandemic.

The poverty reduction rate dropped to 1.2 percentage points between 2010 and 2016 from 1.7 percentage points in the 2000s as growth-centric poverty reduction strategies were not working, said experts.

Besides, poverty reduction initiatives under the social safety net whose worth reached Tk 64,200 crore in 2018–19 or 2.5 per cent of the nation’s GDP have been identified as ‘high targeting errors’.

While about 28.7 per cent of the population are benefiting from the social safety net, around 46.5 per cent of the beneficiaries should not have been included in some 114 SSN programmes under 30 ministries and divisions, according to a mid-term review of the National Social Security Strategy released in July 2020 by the General Economics Division.

Many people deserve support but because of the flawed database they could not be covered under any SSN programme, said Bangladesh Institute Development Studies director general Binayak Sen.

Old-age allowance, allowances for the widow, deserted and destitute women, allowances for the financially insolvent disabled, maternity allowance, honorarium for the freedom fighters and pension for the retired government employees are major social safety net heads.

Binayak lamented that leakages in the SSN programmes were additional problems for the government that was failing to transfer more cash to needy people because of resource shortage marked by an average 9 per cent tax-GDP ratio for a decade.

The GED is asking the government to correct the database for a more effective utilisation of the social safety net provisions for poverty reduction.

The Bangladesh Bureau of Statistics has been appointed to work on the issue since 2015 but the task is yet to be completed.

BBS director general Mohammad Tajul Islam hoped that they would be able to ready the list by June this year.

In July 2020 the World Bank withdrew a $50 million fund citing the BBS failure to prepare a fresh list of the vulnerable populations in connection with a project titled ‘Support Programme for the Poorest — JAWTNO’.

Taken up in 2015, the project has been aimed at transferring cash benefits to pregnant women and mothers with under-5 children from the selected poor households.

The fresh list, Tajul admitted, is essential to update beneficiary data for the social safety net.

According to experts, the COVID-19 pandemic, prevailing in the county since March 2020, has pushed up the overall poverty rate as the worst virus attack since the Second World War has seriously affected the informal sector that employs 80 per cent of the country’s workforce.     

The poverty reduction slowdown prevented the government from bringing down the overall poverty to 16.6 per cent from 24.4 per cent within the 7th Five-Year Plan period that ended in July 2020.

The international poverty threshold was revised to $1.90 per day for a person in 2015 by the World Bank as the cost of living for basic food, clothing and shelter around the world increased from $1.25 per day in 2008.

Poverty alleviation has remained a major challenge for the country since its Independence achieved through a nine-month-long war against Pakistan in 1971.

The incidence of poverty in present Bangladesh in 1970 was around 80 per cent, which dropped to 48.9 per cent in 2000.

In the following decade the accelerated GDP growth led to a speedy decline in poverty with the rate falling to 31.5 per cent in 2010.

The government aims to eliminate extreme poverty by 2031, in which 12.09 per cent of the population now live.

As GED member Shamsul Alam said, there is no magic but reducing income inequality, making higher government investment in job-generation schemes, women empowerment and greater spending on health and education to attain the poverty reduction target in the post- COVID-19 period.

The 8th Five-Year Plan that was put in place in December 2020 has discussed all the necessary action-plans elaborately, he said.

Former Bangladesh Bank governor Salehuddin Ahmed praised government policies, saying that those are very good in narrating targets and recommendations.

But he was critical of the poor capacity of the government agencies in implementing the strategy papers —either the five-year plan or the perspective plan.

Noting that poverty reduction efforts should address not only the lack of income but also the lack of access to health care and education, Salehuddin said that income disparity was widening, adversely affecting the poverty reduction rate.

According to experts, a vast investment is needed to overhaul the country’s health system as the COVID-19 menace has highlighted the need for universal health care for all — regardless of millionaires and paupers.

It is unfortunate that no universal healthcare system has grown during the country’s 50 years of independent existence because of too much emphasis on the private healthcare system, they said.

They also said that it was not acceptable at all that the public health sector expenditure in the national budget had fallen to .08 per cent of the GDP from .09 per cent over the years.

Besides, the country’s non-homogeneous education systems have given rise to discrepancies in getting public services and opportunities by citizens at various levels, hurting the poverty eradication efforts.

News Courtesy:

https://www.newagebd.net/article/134451/poverty-reduction-goes-up-then-slows-down