Poverty Reduction: Pandemic eats away 30 years’ progress

Poverty steadily reduced for 30 years until 2019. Then came the pandemic.

Achievements made in three decades have almost been wiped out in just one year and three months after the first cases of Covid-19 were detected in Bangladesh in March 2020.

Different organisations working on poverty alleviation and economists have repeatedly demanded wider social safety net programmes (SSNPs) and expanded direct cash support that reach the new poor.

But the demands are hardly reflected in the proposed budget for the coming fiscal year.

The government, however, has plans to reduce the poverty rate to 12.3 percent by fiscal 2023-2024, but has yet to announce how that target will be reached.

According to the Bangladesh Bureau of Statistics, the country's poverty rate was 20.5 percent in 2019, down from 21.8 percent the previous year.

In 1991, the rate was 56.07 percent, and in 2010, it was 31.5 percent.

The World Bank's "Bangladesh Development Update: Moving Forward: Connectivity and Logistics to Strengthen Competitiveness" released in April estimated that the poverty rate has jumped to 30 percent.

The proposed budget allocates Tk 1,07,614 crore to materialise the SSNPs in the coming fiscal, up from Tk 95,574 crore in the 2020-2021.

This plan will bring around 14.27 lakh more elderly citizens, widows, and people with disabilities under the SSNPs.

A survey by the Power and Participation Research Centre and the Brac Institute of Governance and Development revealed that the pandemic's economic shock pushed 2.45 crore people into poverty even before the second wave of the pandemic.

It is quite obvious that the proposed additional allocation for the SSNPs will not make a major impact on the lives of the new poor.

In 2020 and 2021, the government twice provided Tk 2,500 in direct cash support to each of 35 lakh poor people. But there is no such plan this time.

Aktarujjaman Khan, president of the Bangladesh Hotel, Restaurant, Sweetmeat, and Bakery Workers' Union, said that the proposed budget would bring no good to the people in the informal sector.

"Many of us have been struggling to buy food amid the pandemic, and the crisis will further deepen in absence of budgetary measures," he said.

Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue, said the previous cash support initiatives were inadequate in terms of the fund and the number of beneficiaries.

The government's proposed budget should have aimed to provide cash support to reach out to more workers in the informal sector.

According to the Bangladesh Bureau of Statistics, there are 6.08 crore employed labourers in the country and 85.1 percent of them work in the informal sector.

The majority of the new poor are in the informal sector which was hit hard by the pandemic, Mustafizur said.

Moreover, there is no database of informal workers, which creates a challenge in detecting the urban poor who have been largely deprived of government assistance, he said.

The allocation for the SSNPs in the proposed budget is inadequate and funds for the retired government employees have been included under the programmes.

The government allocated Tk 23,000 crore for the retired government employees for this fiscal year, which is 24 percent of the total SSNPs fund.

The allocation for the retired employees should not be considered SSNPs, Mustafizur said.

Referring to a 2016 BBS household survey, Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies, said the previous allocations for the SSNPs were inadequate, considering the number of poor people.

There were around 3.70 crore poor people before the pandemic and the number has increased profoundly, she said.

"It will be difficult for us to regain our achievement in reducing poverty, because the government has not clearly mentioned anything on how to address the issue," Nazneen said.

The government also should have rolled out a special stimulus package to mitigate the crisis facing the micro enterprises, she said.

Many unemployed people would have got back their jobs, had the micro enterprises rebounded their businesses, she said.