Ending poverty depends on how we value people and the planet

The International Day for the Eradication of Poverty is an opportunity to not only acknowledge the difficulties the poor face worldwide but also to make the concerns on poverty heard by all, particularly the policymakers. The United Nations (UN) at its General Assembly in December 1992 declared that October 17 would be observed annually as the International Day for the Eradication of Poverty. All member states were invited to promote activities towards poverty eradication in their respective national contexts.

Since the early 1990s, the world has progressed significantly on all fronts—economically, socially, technologically and much more. However, there are still a large number of people living in poverty without income and basic facilities of life. During the period of the Millennium Development Goals (MDGs) of the UN between 2000 and 2015, the world managed to reduce poverty by a large number. But the world still has a huge population of people living in extreme poverty. In 2015, the member countries of the UN pronounced their commitments towards poverty eradication once again through a much more serious announcement in 2015 and committed to implement the Sustainable Development Goals (SDGs). It set the target to eradicate extreme poverty for all people everywhere, currently measured as people living on less than USD 1.25 a day by 2030 (SDG no. 1.1). SDGs also urge for the eradication of all dimensions of poverty.

The theme of this year's International Poverty Eradication day is "Building Forward Together: Ending Persistent Poverty, Respecting all People and our Planet". Clearly, in the context of the ongoing Covid-19 pandemic that has shrunk the global economy significantly, leading to higher poverty, this day is even more significant. Various studies reveal that millions of people have been pushed into poverty and a new set of poor has been created. Most of the new extreme poor are located in South Asian and Sub-Saharan countries (World Bank). 

Indeed, even before the pandemic, despite the world experiencing impressive economic prosperity, there were still a large number of people living without an income and the basic necessities of life. They are facing multidimensional poverty—not only just less income and consumption but are being deprived of all entitlements as a human being. They live in poor housing conditions with unsafe water and sanitation, have limited access to healthcare and education, and are exposed to risky work conditions. They are not covered under national social protection and are vulnerable to shocks such as natural disasters and pandemics. These poor also have unequal access to justice and do not have political power. While the concentration of the poor people has historically been in the developing and least developed countries, other advanced countries also face the challenge of poverty.

Bangladesh has been able to reduce poverty over the decades due to its high economic growth. The share of people living under the poverty line has come down from 48.9 percent in 2000 to 24.3 percent in 2016. In case of extreme poverty, the share of people living in extreme poverty has reduced from 34.3 percent in 2000 to 12.9 percent in 2016. Unfortunately, the success of higher growth and poverty reduction is not reflected in the case of reduction of inequality. Between FY1992 and FY2016, the income share held by the richest five percent of households in Bangladesh increased from 18.85 percent to 27.89 percent (Bangladesh Bureau of Statistics). Also, the income share held by the poorest five percent of households fell from 1.03 percent in FY1992 to 0.23 percent in FY2016. It is apprehended that the pandemic may worsen the inequality situation as the people just above the poverty level have fallen into poverty due to job losses and exhaustion of all their savings. In fact, the pandemic has created new poor who have lost their jobs—which has been the case globally.

For the coming years, Bangladesh has set targets to reduce poverty further. The Eighth Five Year Plan (8FYP) of Bangladesh targets to reduce incidence of poverty from 23 percent in FY2021 to 15.6 percent in FY2025. It targets to reduce extreme poverty from 12 percent in FY2021 to 7.1 percent in FY2025 (8FYP, Planning Commission). Of course, the achievement of the 8FYP targets will depend on how the economy recovers from the Covid-19 pandemic and whether the projected growth of GDP of the country will be on track soon. In the 8FYP, the annual GDP growth rate is projected to be eight percent on average. If this growth is translated into higher and better job creation, increased income, improved productivity, and availability of universal and better public services, achieving SDG1 could be possible by 2030. 

Given that the world during the pre-Covid period was not poverty free and equitable, the post-Covid world should look to "build forward better" instead of "build back better". This forward-looking building of the world will be economically, socially and environmentally equitable and just for every citizen of the world. Unfortunately, poverty is the result of a policy and regulatory framework that is designed to be discriminative against the poor. During the pre-historic period, lack of resources was the main cause of poverty, while in modern days, it is the lack of efficient use of resources and inequality in the distribution of resources. Hence, policymakers have to consider these aspects along with working for achieving accelerated growth while taking initiatives for poverty eradication. Higher growth will only be meaningful in the real sense when each and every person will have access to equal opportunities and can utilise her or his potentials.

The world leaders should plan for economic development by considering multi-dimensionality of progress that covers both quantity and quality. We must not forget that along with better living standards, people also need improved self-esteem, freedom from oppression, and availability of opportunities and greater choice. And, of course, growth cannot be sustainable if it is based on endless extraction of the resources gifted to us by the planet. The sustainability of growth will depend on how we take care of nature and use natural resources.

Therefore, as we celebrate this year's International Day for the Eradication of Poverty and commit to building forward better, the perspectives on economic growth should be transformed into economic development. The real respect to people and the planet can only be shown through charting out a new path of economic development.

Dr Fahmida Khatun is the Executive Director at the Centre for Policy Dialogue.Views expressed in this article are personal.