Bangladesh

Situated in a fertile low-lying river
delta, Bangladesh combines high vulnerability to floods,
tropical cyclones, earthquakes, and climate change with one
of the world’s highest population densities, with around 159
million people living in less than 150,000 sq. km. With the
world’s second lowest per capita income in 1975, it was
labeled ‘the test case for development’ in view of the
formidable development challenges it faced. Nevertheless,
Bangladesh has proven to be remarkably resilient, developing
well beyond initial expectations, and has made very good
progress with poverty reduction. GNI per capita has grown
from around US$100 in 1972 to US$1,314 in 2015, and the
country crossed the World Bank threshold for the
lower-middle-income group in 2015. As highlighted in the
Seventh Five Year Plan background paper on ending extreme
poverty, the agricultural labor market in Bangladesh
tightened significantly in the decade of 2000s, which led to
an increase in the real agricultural wage rate. Three main
channels were the primary contributors: (a) relocation of
farm labor to rural non-farm sectors; (b) relocation of
rural labor to urban activities through the ‘pull effects’
of urbanization, creating employment opportunities for the
extreme poor in labor-intensive construction and transport
activities; and (c) jobs for the poor created in the
manufacturing sector. Robust inflows of remittances from
overseas workers contributed to spurring the creation of
non-farm employment opportunities in rural areas.