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OP-ED: Where does Bangladesh stand on the poverty and inequality front after 50 years of independence?

  • Published at 12:32 am February 26th, 2021

While the poor have benefitted from growth, did they benefit as much as the rich?

A Bangladeshi today is about three times as well off than their grandparents were on the eve of the Liberation War. But have the poorer sections of the society benefitted from the economic growth of recent decades?

The World Bank considers people living on less than $1.90 a day (measured in 2011 prices, after accounting for price differences around the world) as being in extreme poverty. 

Two less acute measures of poverty are daily incomes of less than $3.20 a day and less than $5.50. 

Whichever measure is used, Chart 1 shows that after rising in the 1980s, the share of people living in poverty declined steadily between 1990 and 2016.  

Chart 2 compares Bangladesh with a number of neighbours in the south and southeast Asia with respect to the evolution of the share of people in extreme poverty in the vertical axis with GDP per capita (measured in purchasing power parity) in the horizontal axis. 

Two things stand out. First, as one would expect, the incidence of poverty declines as average income rises. 

Second, while Bangladesh has reduced poverty at a lower level of per capita income compared with some of the neighbours, it remains a relatively poverty-stricken land.

While the poor have benefitted from growth, did they benefit as much as the rich? Has the rising tide lifted all boats equally? 

Gini coefficient is a measure of inequality. A co-efficient closer to zero signifies a more equal society, whereas the closer the value is to 100, the higher the inequality. 

Compared with the 1980s, Bangladesh has become a more unequal place in recent decades (Chart 3). Nonetheless, compared with many of the neighbours, Bangladesh remains a relatively more egalitarian place.

That Bangladesh may not be as unequal as other countries in monsoon Asia is no cause for complacency. 

This is particularly highlighted by the most recent Household Income and Expenditure Survey of the Bangladesh Bureau of Statistics. This survey reports the average monthly income per household where the households are grouped according to income ranges. 

According to the survey, the average monthly income hardly moved for most households between 2010 and 2016, except for two groups. 

Over that period, the richest households saw their monthly income increase by nearly a quarter to over Tk 77,000. In contrast, the poorest households saw their monthly income decline by a third to less than Tk 700. 

For all the progress made since independence, Bangladesh was still a regressive land in the 2010s.

Jyoti Rahman is an applied macroeconomist

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