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Poverty in Bangladesh: Building on Progress

Bangladesh FY02 PA

Full Report (9.1Mb PDF)

Key Findings:

Trends in the Economy

Good growth performance during the 1990s: GDP growth averaged about 5 percent per year, with per capita GDP increasing by about 36 percent over the decade, twice the average for low and middle income countries over the same period. Industry was the fastest growing sub-sector, with 86 percent aggregate increase over the decade. Output in the services and agriculture sub-sectors increased by 50 percent and 33 percent respectively during this period.

Trends in Consumption-based Poverty and Inequality Measures

The headcount poverty rate in Bangladesh declined from 59 percent in 1991-92 to 50 percent in 2000. Although the poverty gap and squared poverty gap yardsticks also show decline in poverty over the decade, some evidence - conflicting with other data - shows the great bulk of poverty reduction coming in the first half of the 1990s.

Progress in reducing poverty incidence was equal across urban and rural areas, with rural areas performing better in lowering the depth and severity of poverty. Dhaka division had the largest decline in poverty over the decade; poverty rates stagnated in Chittagong division.

Income inequality in Bangladesh rose considerably over the decade. Though all income strata gained, growth benefited the poorest and relatively affluent more than the middle class. Growth in rural areas appears to have been more broad-based than in urban areas. There, faster rates of growth were accompanied by a considerable rise in inequality as a result of which the magnitude of the overall decline in poverty matched that in rural areas. Significant net rural-urban migration over the decade may also have contributed to comparatively lower rates of poverty reduction in urban areas.

Trends in Non-Income Measures of Living Standards

Data on food consumption patterns confirm the fall in poverty during the nineties. Anthropometric data from various household surveys indicate good progress in reducing child malnutrition, and significant improvements in infant and child mortality, as well as in associated measures of life expectancy. Bangladesh's achievements in reducing fertility have been substantial, though there are indications that the total fertility rate may have plateaued in recent years. Progress in increasing literacy and school enrollments during the nineties has been less encouraging, with the quality of education provided in the schools generating considerable and rising concern.

Bangladesh has made commendable progress in reducing vulnerability on several fronts, especially with regard to enhanced food security, and in strengthening disaster coping mechanisms. However, various types of risks of deprivation continue to face the country's population and to pose significant challenges.

Profile of the Poor

The poor in Bangladesh tend to have low levels of education, have limited access to land, and are highly concentrated in low paying, physically demanding, and socially unattractive occupations as casual wage laborers. In both urban and rural areas, where the poor lack much access to modem amenities and services, they also tend to live in houses of inferior quality. While poverty rates do not appear to be strongly correlated with religion or gender of household head, those female-headed that are widowed, divorced or separated have a considerably higher incidence of poverty relative to others.

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