Poverty is a curse for a country. The GDP growth rate, industrialization and per capita income are developing in our country but poverty as the anathema still exists in our country. Around two crore people in Bangladesh are living below the extreme poverty line. The GDP growth rate of Bangladesh is 7.86% and per capita GDP is $1,751(FY2017-18). But only GDP growth could not help a country to graduate from poverty. We need an equal distribution of wealth.
In Bangladesh, income inequality gap is increasing between rich and poor. According to a report from New York-based research firm Wealth-X, Bangladesh has topped the rank of countries in the quickest growth of the number of ultra-wealthy people between 2012 and 2017. The number of ultra-high-net-worth (UHNW) individuals in Bangladesh rose by 17.3 percent during the period. Gini coefficient—an economic term to measure income or wealth inequality on a scale of 0 to 1, in which 1 represents perfect inequality and 0 signifies perfect equality—the Gini coefficient of Bangladesh for income inequality is 0.39 (2016).The Gini coefficient shows that income inequality rate between the rich and poor citizens are high in our country. Rich become richer day by day but the poor people become poorer and confine themselves in the poverty trap.
To quote Rabindranath Tagore, “The village has fallen into the medieval period; the city is in the modern era, the gap between the two is large”. Exactly, the difference between urban and rural areas in our country is too much high. Technological advancement, industrialization, Hospitals, educational institutions, etc. all development projects have taken place in urban area. Rural areas are always deprived of all development projects such as technological advancement, industrialization, etc., although 80% populations of Bangladesh live in rural areas.
Without knowing the actual cause, it is not possible to solve the problem. There are many reasons for the uncontrolled poverty rate. One of the reasons is the top-down approach of the economy. The main purpose of this approach is; When Economic growth or GDP growth increases at center or core, it leads to developing economic growth on the periphery like trickle-down-effect. In reality, trickle-down-effect does not work in the long run. On the other hand, Trickle-down-effect creates problems of ensuring income equality and inclusive growth because it causes of rising income inequality in the economy. The urban-centric development project is another reason for the high rate of poverty in Bangladesh. Around 80% of people of the total population live in rural areas. Lack of job opportunities or industrial settlements, the unemployment rate is also high in rural areas. There is a positive relationship between poverty and unemployment. If they have no employment opportunities, they will inevitably become poor. According to HIES 2016, the Poverty rate is also the higher in rural areas (26.4%), rather than urban poverty rate (18.9%). Poor people cannot afford basic needs for their families. Many people have not an adequate diet and food; they suffer from starvation. According to World Bank report 2016, “Achieving the goal of reducing extreme poverty to less than 3 percent of Bangladesh is by 2030 will require more economic growth.”
Jeffry Sachs mentioned in his book “End of poverty” that extreme poor people lack the major six capitals: Human capital, Business capital (the machinery, facilities used in agriculture and industry), Infrastructure, Natural capital, Public institutional capital and Knowledge capital (the scientific and technological know). If a country wants to graduate his people from extreme level poverty, the country has to prioritize those six capitals at first. The six capitals are interrelated and each capital is compulsory for graduation. For developing countries, it is quite hard to ensure six capitals in a body. In the case of Bangladesh, the Government should give first priority on Human capital, Business Capital, Infrastructure and Public institutional capital for reducing the extreme poverty rate in the country.
Inclusive development ensures the improvement of the standard of living and economic sustainability of every single individual in the country as well as ‘leaving no one behind’. Economic growth is not sufficient for reducing the poverty rate. The government and policymakers have to give more priority to inclusive development rather than economic growth. Inclusive growth or development is the most important factor for the alleviation of poverty rate of our country. Inclusive development can only reduce the disparity between poor and rich in society.
Micro-level development or rural development is another condition for elimination of poverty. The poverty rate and percentage of the population both are the highest in rural areas rather than in urban areas. More than 80% of people in the rural region depend on agricultural productivity for their survival. Besides, farmers are not familiar with modern technology; so the rate of agricultural productivity is also low. On the other hand, unemployment and underemployment rate are also high in the rural community. The low standard of living, scarcity of health care, lack of educational opportunities and scarcity of job opportunity; all are usual for farmers of their everyday lives. The poverty rate in the northern part is also higher than the southern part. Starvation is a common and daily companion for farmers. Many farmers confine themselves in the vicious circle of poverty. The government should increase investment in the rural sector and enlarge job opportunities for unemployed people by building new industrial zones in the rural area. It can encourage foreign investors or multinational companies to invest in rural areas. Micro-level development is more effective and efficient rather than macro-level development for breaking the vicious circle of poverty. Inclusive growth and micro-level development approach can reduce the poverty rate and help to build new Bangladesh without poverty.
The author is an undergraduate student at the University of Dhaka.