Ending Extreme Poverty in Bangladesh:
Actions Needed in the Context of the Seventh Five
Year Plan of Bangladesh
Binayak Sen, BIDS (binayak71@yahoo.com)
Zulfiqar Ali, EEP/Shiree (zulfiqar@shiree.org)
Presentation prepared for the conference on
Towards Sustained Eradication of Extreme Poverty in Bangladesh
NEC Conference Room, Planning Commission
8-9 April 2015
Ending Extreme Poverty:
Can We Do IT?**
• Extreme poverty (as per the national extreme poverty line or “lower
poverty line”) decreased quite dramatically in both rural and urban
areas: from 44% in 1991/92 to 21% in 2010.
• The rate of extreme poverty reduction has been faster in the decade
of 2000s compared to the 1990s: 1.8% in the 1990s compared to
4.8% in the 2000s.
• Not only there is a declining trend in extreme poverty but also the
“structure of poverty” has undergone evolution: The proportionate
share of extreme poor in total poor at the national level has
diminished with time.
• The poorest are now better equipped in human development:
improvements have been noted in the areas of literacy, infant and
child mortality, and reproductive health services.
• Spatially poorest areas have also exhibited significant progress with
significant targeted programs and political voices in these areas.
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Trends in Extreme Poverty
Extreme Poverty Head Count
National
50
41.3
40
34.4
33.7
25.1
30
17.6
20
10
0
1991-92
1995-96
2000
2005
2010
Year
50
45
40
35
30
25
20
15
10
5
0
Urban
43.7
38.5
37.4
28.6
21.1
1991-92
1995-96
2000
2005
2010
Extreme Poverty Head Count
Extreme Poverty Head Count
Rural
25
23.6
19.1
20
14.6
13.7
15
10
7.7
5
0
1991-92
Year
1995-96
2000
2005
2010
Year
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Poor-Rich Ratio in Education
Share of Households with "No Formal Education" (%)
Poor-Rich Ratio in Education
5.00
4.50
4.38
4.39
4.00
3.64
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2004
2007
2011
Year
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Poor-Rich Ratio in Infant Mortality and
Under Five Mortality
Poor-Rich Ratio in Infant Mortality
Poor-Rich Ratio in Under Five Mortality
2.00
2.10
1.83
1.80
1.72
2.00
2.00
1.40
1.38
Under Five Mortality
Infant Mortality
1.60
1.20
1.00
0.80
1.90
1.80
1.73
1.70
0.60
0.40
1.68
1.60
0.20
0.00
1.50
2004
2007
2011
2004
Year
2007
2011
Year
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Is Growth Enough for “Zero Extreme
Poverty”?**
• The projected figures are encouraging, but…
• Projections based on historically observed “Growth
Elasticity of Extreme Poverty Reduction” suggest that
Bangladesh would reduce its extreme poverty to 4.5%
percent by 2021 under a constant real GDP growth
scenario of 7 percent per year (the likely realistic target
for the Seventh Plan).
• This however still leaves a population of 7.45 million in
extreme poverty!
• To reach near the elimination of extreme poverty,
Bangladesh should eventually realize higher level of
real GDP growth rate above 7 percent.
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Extreme Poverty under Different Growth Scenario
Extreme Poverty Headcount: National, 2021
20
Extreme Poverty Headcount
18
17.6
16
14
12
10
8
6.54
6
5.77
4.49
3.46
4
2
0
2010 (Base)
5.5
6
7
8
GDP Growth
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Spatial Dimensions of Extreme Poverty
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Contd….
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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HOWEVER, Growth Conditions themselves Can Change:
Three Caveats in Extreme Poverty Projections
(1)
(2)
(3)
(4)
The net growth elasticities are based on past trends on inequality of consumption
expenditure observed between 2005-2010 (which has been very favorable) and it is further
assumed that it will exhibit similar pattern until 2021! This may be unrealistic due to
growing (a) urbanization, (b) skill differences, and (c) governance risks.
Net growth elasticities also implicitly assume that pressures of downward sliding down the
extreme poverty ladder would not aggravate during the next decade. This assumes that
there would not be further deterioration of health, governance and environmental risks (or
the “falling propensity” remains the same)
For the extreme poverty projections, growth elasticities statistically treat all extreme poor
groups equally. This disregards the varying contexts for social reproduction of diverse
category of extreme poor groups. Some extreme poor are socially more marginalized than
others and hence may be more difficult to address.
Even though the extreme poverty gap index is only 3% (as per the lower poverty line), it is
not easy to eradicate because of complex heterogeneity of the group (apart from imperfect
targeting problem)
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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SO, We Need Additional Interventions to
Achieve Zero Extreme Poverty?**
• Need “Mini-Big Push” by way of nationally replicating
successful pilots of livelihood interventions. This pillar is to
lift them out of extreme poverty.
• Need “major re-orientation of public services” especially
health, education, transport and justice to meet the needs
of the extreme poor (it will also benefit other poverty
groups). This pillar is needed to prevent fall into extreme
poverty.
• Need “major re-casting of existing social protection
programs” to ensure better transfer and vulnerability
reduction for the extreme poor. This pillar is needed to
reduce the pressing need of the present and immediate
vulnerability.
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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A Case for Mini Big-Push
• Mini big-push through replication of micro successes
in eradicating extreme poverty:
– there were quite a few such programs that have been
successful in lifting the beneficiary households from
extreme poverty.
– the size of the needed transfer is reckoned to be around
450-500 US dollar per beneficiary spread over about 2
years of program intervention.
– the total costs of such replication will not exceed 2-3% of
GDP annually - this amount of money, if properly executed,
can lift an extremely poor household from severe poverty.
– HOWEVER, GoB buy-in and increased involvement as well
as linking them with other GoB institutions and services
are important to make them more effective and
sustainable.
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Contd.
• Substantive and Inclusive Social Protection Schemes to
Support Extreme Poverty Reduction:
– Current allocation is claimed to be in the range of 2.2% of GDP,
which in reality is about 0.77% for “core social protection
programs”, and would be even less for the extreme poor (when
purged from confounding influences) – further injection of
money for the core social protection programs is required.
– Currently, the SP programs are marked by extreme tokenism of
monthly transfer per beneficiary (not exceeding 2-3 days of farm
labor wage). This needs to change.
– Renewed emphasis on the social protection along life-cycle
approach is a welcome move, but it needs to ensure that it is
not sidelining the extreme and chronic poverty agenda.
– There should be a meeting of minds in the dialogue between
extreme poverty reduction and social protection strategies.
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Contd.
• Addressing the Growing Human Development Needs of the
Extreme Poor:
– There are areas of deprived pockets in overall progress in human
development that tended to bypass in the past the extreme and
chronic poor.
– As income of the extreme and chronic poor grows, their demand
for human development needs will also increase - this relates to
the demand for education, especially quality education; the same
holds for the quality of the curative health care as well. Equal
access to educational opportunities is crucial for intergenerational mobility for the extreme poor.
– Some of the human development targets require social actions and
cannot be addressed by policy alone; making breakthroughs in
these areas require longer time and creation of innovative normschanging institutional interventions - high prevalence of dowry, for
instance, leads to early marriage thereby influencing high maternal
and child malnutrition, etc.
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Is Middle Income a Panacea?
• Reaching Middle Income is possible and feasible
in Bangladesh before poverty or extreme poverty
eradication
• However, it may sideline the policy emphasis on
poverty eradication (the problem of “growing
amnesia”)
• India, Pakistan and Nigeria—all are Middle
Income Countries with persistent poverty and
social MDG/ SDG problems
• Hence, policy emphasis should be “Reaching
Middle Income with Zero Extreme Poverty”
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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Final Points
• Need to tie in with Seventh FYP, Vision 2021,
SDGs, and the NSSS.
• Ensure needs of EP recognized in policy and
practice and EP ends by 2021.
• Role of DPs in rolling Policy Dialogue: signal to
Planning, Finance that DPs will actively support
GoB EP policy and practice in Five Year Plan and
ADPs.
• A Permanent Secretariat for Extreme Poverty
Eradication in GED supported by DPs.
Binayak Sen and Zulfiqar Ali
Extreme Poverty Conference, 8-9 April 2015
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