Bangladesh's extreme poverty rate has dropped to 12.9 percent in 2015-16, according to a new estimate of the World Bank.
This 12.9 percent accounts for two crore people.
The revised poverty rate is based on the new international poverty line of $1.90 a day and 2011 purchasing power parity (PPP) conversion rate. PPP provides a measure of price level differences across countries.
Under the new international poverty line, 2.80 crore, or 18.5 percent of Bangladeshis lived in extreme poverty in 2010, the most recent year for which a household survey is available for Bangladesh.
In contrast, the extreme poverty rate at the now retired line of $1.25 per day was 43.3 percent or about 6.55 crore people in 2005 PPP.
The rate reconfirms the impressive pace of poverty reduction in the past three decades, said the Washington-based lender yesterday in its latest Bangladesh Development Update.
“There is a lot for Bangladesh to celebrate,” said Qimiao Fan, country director of the bank for Bangladesh, Bhutan and Nepal, while releasing the report to the media at his office in Dhaka.
“This is a huge reduction and truly astonishing,” he said.
Because of Bangladesh's impressive gains on poverty alleviation, World Bank Group President Jim Yong Kim plans to travel to Bangladesh as part of a global End Poverty Day campaign. His visit is intended to draw attention to Bangladesh's impressive record in dramatically reducing extreme poverty, said the bank in a statement.
“I'm very much looking forward to seeing firsthand Bangladesh's progress in improving the livelihoods of tens of millions, empowering women, and enhancing the quality of education,” Kim said in a statement of the WB.
“Many developing countries in the world can learn important lessons from Bangladesh to reduce extreme poverty and to promote sustainable development.”
Two new reports -- Bangladesh Development Update and Poverty and Shared Prosperity 2016: Taking on Inequality -- find that Bangladesh is making sustained progress in poverty reduction and increasing opportunities.
Qimiao said Bangladesh is a glaring example to the rest of the world on how to overcome poverty. “Now it is time for Bangladesh to build on the success” to pull the extreme poor out of poverty, he said.
The international extreme poverty line was updated in October 2015 from $1.25 a day at 2005 PPP to $1.90 a day at 2011 PPP for most countries, to reflect new price data.
While most countries reported updated statistics at that time, the WB did not apply the 2011 PPP for Bangladesh.
“Rather we took extra steps to assess that the 2011 PPP accurately reflected the price of goods for people in Bangladesh,” said Zahid Hussain, lead economist of the bank for Bangladesh and the author of the report.
He said in the last one year, the WB worked with the Bangladesh Bureau Statistics (BBS) and the Asian Development Bank to scrutinise the data so they can reach a credible poverty rate. In doing so, the WB has revised the entire series of estimated poverty rates from 1991 to 2010 for Bangladesh.
Zahid also acknowledged that the new rate came at a time when the BBS is carrying out field level survey for the next Household Income and Expenditure Survey (HIES).
“Once we get data from the BBS, we will get the right picture. Still, whatever number you believe, Bangladesh's achievement is commendable.”
The 2010 HIES came up with the poverty rate based on the 2005 PPP but it underestimated the purchasing power of the taka.
The PPP exchange rate of taka relative to the US dollar in 2011 was Tk 24.8 per dollar as per the 2011 PPP, but it was Tk 52.4 per USD according to the 2005 PPP.
Still, Bangladesh is currently the 64th poorest nation out of 154 countries and much remains to be done, said Qimiao.
The development update stresses increasing resilience to security, financial and trade shocks along with weaker than expected global trade and growth.
Achieving the goal of reducing extreme poverty to less than 3 percent of Bangladeshis by 2030 will require economic growth becoming more inclusive with the poorest 40 percent of society receiving greater benefits from development.
The BBS calculates poverty line based on calorie intake. Those consuming below 1,805 calories a day are bracketed as extreme poor.