Bangladesh - Poverty Assessment for Bangladesh : Creating Opportunities and Bridging the East-West Divide

Bangladesh represents a success story
among developing countries. Poverty incidence, which was as
high as 57 percent at the beginning of the 1990s, had
declined to 49 percent in 2000. This trend accelerated
subsequently, reducing the poverty headcount rate to 40
percent in 2005. The primary contributing factor was robust
and stable economic growth along with no worsening of
inequality. Respectable GDP growth that started at the
beginning of the 1990s continued into the new millennium and
averaged above 5 percent annually between 2000 and 2005.
Inequality, as measured by the Gini coefficient of
consumption, remained stable between 2000 and 2005. Recent
shocks to the Bangladeshi economy in the form of natural
disasters and rising food prices have partially dampened the
rapid progress in reducing poverty. The year 2007 saw two
natural disasters, floods and a devastating cyclone within a
few months of each other. Another significant shock has been
the steep rise in food prices, including the main staple,
rice, which has revealed the risk posed by global price
volatility for a net food-importing country like Bangladesh.
Estimates in this report suggest that the impact of the food
price shock has likely negated some of the reduction in
poverty brought about by economic growth between 2005 and
2008. Specific areas for policy focus which are elaborated
in the report include measures to: (i) promote growth by
sustaining increases in labor productivity and job creation
in manufacturing and services; (ii) expand opportunities in
lagging regions by improving connectivity with growth poles
and investing in human capital; (iii) facilitate migration
from poor areas given the poverty-reducing impact of
remittances; (iv) stimulate women's participation in
the labor force (v) sustain Bangladesh's past successes
in reducing fertility; (vi) improve poor households access
to and quality of education, health, and nutrition services;
and (vii) strengthen the coordination, targeting, and
coverage of safety net programs.