Thursday, August 18, 2011

Poverty declined in Bangladesh from 40% to 31.5% in five years

Absolute poverty in Bangladesh dropped to 31.5 per cent in 2010, reflecting an 8.5 percentage point decline in the last five years, according to Bangladesh Household Income and Expenditure Survey (HIES) 2010. This is lower that in Nepal where absolute poverty declined to 13 percent of total population, down from 31.5 percent in 2003/04—an incredible 18 percentage point decline in poverty, or three percentage point decline each year.

According to the HIES 2010 data, poverty in the rural areas shrunk by 8.60 percentage points to 35.2 per cent in 2010 from 43.80 per cent in 2005. The last HIES survey in 2005 showed that 40 per cent of the people of Bangladesh, out of its total population, lived below the poverty line. According to the last survey data, the 43.80 per cent of the total rural population was poor while 28.40 per cent people in the urban areas lived below the poverty line.

One of the main factors is attributed to remittances, which was also the most crucial factor in reducing income poverty in Nepal. The Bangladeshi authorities attribute to this remarkable feat to increased remittances, spread of modern agricultural method, improvements in rural infrastructure and flow of micro-credit to the ultra-poor.

The present report is based on the final data sets of HIES 2010. The sample size was
12,240 households where 7,840 were from rural area and 4,400 from urban area.

South Asia continues to reap the benefits of remittances. The question is: can this be sustainable and can the money be channeled to productive sectors?

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