Poverty line needs to be redefined: experts

Bangladesh should redefine the poverty line taking into account the changes that have taken place over times and the improvements in the standard of living, said Wahiduddin Mahmud, an eminent economist, yesterday.

He said: “Our national poverty line income should be changing over time as standard of living improves. It is a moving goal.”

“So, why should we be in the same poverty line when we become a middle-income country?”

Mahmud's recommendation came at the launch of two books -- 'Aiding Resilience among the Extreme Poor in Bangladesh' and 'Extreme Poverty, Growth and Inequality in Bangladesh' -- organised by the General Economics Division of the Planning Commission at the planning ministry.

University Press Ltd Dhaka and Practical Action Publishing, Rugby published the books.

Bangladesh estimates poverty based on its own measurement tools, Mahmud said.

“If we use global estimate, the scenario would be different.”

Since 1995-96, the Bangladesh Bureau of Statistics has been using a method called 'Cost of Basic Need' to measure poverty in the country. It assesses poverty and inequality by the Household Income and Expenditure Survey (HIES).

In this method, two poverty lines -- lower poverty line and upper poverty line -- are measured in three stages, according to a finance ministry document.

Currently, poverty in Bangladesh is estimated by consumption expenditure. But if it is estimated by income, the rate of poverty would be higher, Mahmud said.

At the event, MA Mannan, state minister for finance and planning, agreed with Mahmud and said the poverty line income estimate needs to be done.

“Reality must be faced so that we get the real picture,” he added.

The projection that Bangladesh is nearing eradication of extreme poverty is realistic, Mahmud said.

BBS data show that in 2018 Bangladesh's poverty rate stands at 21.8 percent and extreme poverty rate at 11.3 percent, which was 23.1 percent and 12.1 percent respectively in 2017.

“Once, Bangladesh was seen as a test case -- if we can develop then any country can. Now, it is said that if any country can eradicate poverty, it would be Bangladesh,” Mahmud added.

Extreme poor families cannot be reached easily through generic policy and operational packages, said Geof Wood, emeritus professor of the University of Bath.

“They require much more precise support, calibrated to their particular combination of circumstances.”

Wood went on to suggest developing a new cadre of poverty social worker to give more individualised support to insecure households.

Income inequality is increasing, said Binayak Sen, research director of the Bangladesh Institute of Development Studies.

“We need to think how to moderate income inequality.”

Sen raised the issue of people who are out of poverty but are vulnerable to falling back into the poverty trap for shocks and various other factors.

“It is disturbing,” he said, while suggesting reorganising the delivery system of education and health.

The level of inequality was low in the post-independence period but the rate of poverty was higher, said Abdul Bayes, a former vice-chancellor of Jahangirnagar University.

Over time, inequality has widened and poverty has declined, he added.

It is said that when Gini coefficient, a measure of inequality, is above 0.5 a country remains in the danger zone owing to risks of social unrest, said Prof Shamsul Alam, a member of the GED.

In 2010, the Gini coefficient stood at 0.458, according to the BBS.

“So, we need to think seriously on this issue,” Alam said, while stressing on the need to think how to ensure universal coverage of social protection, voluntary pension scheme and social insurance.