New ideas for poverty eradication

The theme for this year's International Day for the Eradication of Poverty was "Decent Work and Social Protection: Putting Dignity in Practice for All.  Trade has expanded due to increasing global economic connectivity. As a result, people’s employment opportunities have increased in many countries, like Bangladesh.

Their income has increased a lot. Therefore, the poverty rate of lower-class people has reduced significantly. The International Day for the Eradication of Poverty is already uniquely important to Bangladesh because of its incredible success in poverty eradication over the past 14 years.

However, considering our overall socio-economic reality, the theme for this year's International Day for the Eradication of Poverty carries additional significance because we have already become a low-middle-income country. Bangladesh is going to be recognised as a developing country from a less developed country within a short period of time. In this context, it is required a radical change in our thinking, philosophy, and practice for our poverty eradication.

So the issues of decent work, universal social security, and dignified life are no longer mere slogans for us. Undoubtedly, many entrepreneurs have been produced in the country's economy. They are creating job opportunities for many people. If they can be given more flexible work opportunities, easy financing opportunities, and market facilities for the goods and services they produce, then the rate of poverty can be reduced more quickly.

15 years ago, when the process started with the aim of making 'Digital Bangladesh', the poverty rate in this country was about 32 percent. And lastly, it fell below 19 percent (over the same period, the extreme poverty rate fell from around 18 percent to below 6 percent).

This achievement has come with the allocation of social protection and overall economic development-friendly investment in the national budget, keeping in mind the goal of poverty reduction. In this regard, the country's non-governmental organisations and international development partners have played a very effective supplementary role.

The private sector has also gradually come out of urban concentration and started playing a role in increasing the economic opportunities of marginalised people. As a result, as agriculture has been greatly developed and modernised, so too in rural areas, a large part of the people's income is now coming from the non-agricultural sector (more than two-thirds).

National policies on the economic protection of rural and urban people are thus entering a new era. Most of the targeted social security we have seen is undergoing positive changes due to digitalization. Besides, we are also seeing the start of work on universal security programmes like pension schemes.

The poverty eradication practices that we have seen succeed so far have been 'graduation focused', i.e., bringing marginalised people up from below the poverty line is the key. But now, apart from lifting people from below the poverty line, programmes must also be thought of to ensure that those above do not fall back into poverty due to any economic downfall.

It is known that 2.5 million families around the world are falling into poverty every year due to health costs. As people in Bangladesh bear nearly two-thirds of the total health expenditure in the country, it can be said that due to this, a large number of people in our country again go below the poverty line.

If this is not prevented, it will not be possible to sustain the momentum achieved in the last decade in poverty eradication in the next decade. Not only health costs, but any major economic downfall pushes many people just above the poverty line back into poverty. We have seen this happen during the Corona period.

We must acknowledge our success in all human development indicators, such as the increase in per capita income, education rate, average life expectancy, reduction in infant mortality, and maternal mortality. It is also undeniable that we have created a possibility to improve these indicators in the coming days. But there is no room for complacency now. Rather, thinking about the achievements of this time and future possibilities, one should be confident enough to face the challenges.

The global economic instability and our own macro-economic managerial crisis have created many challenges. Remember that the poor and marginalised people are under the most pressure due to macroeconomic crises such as the dollar crisis, an increase in import costs, investment, and emigrant's incomes slowing down.

Therefore, macroeconomic management and planning should also be taken seriously in the policy discussion of poverty eradication. Especially the rate at which people's real income is decreasing due to inflation should also be given importance in the discussion of poverty eradication.

The agriculture and SME sectors should be emphasised to bring down the poverty rate to a desirable level in this country’s huge population within the next 10 years. As per our experience, it has been seen that our poverty eradication has a very significant positive correlation with the development of the agricultural sector.

In 2017, BRAC's survey-based research showed that if the agricultural income in this country increased by 1 percent, it would reduce poverty to 0.39 percent. Therefore, agriculture should be given priority in macro-planning to reduce poverty.

The hope is that our policymakers are walking that path. That’s why, in spite of multi-faceted challenges, record boro crop production (2.07 million tonnes) for the sixth consecutive year has been reported recently from the Bangladesh Bureau of Statistics report.

So, we need to focus on MSME to ensure a source of income for the poor. Already, 30 percent of the country's labour force is engaged in the MSME sector, and one-fourth of the country's GDP is also coming from this sector. Hence, there is no alternative to ensuring more effective development of the MSME sector to make poor people entrepreneurs and ensure sustainable employment for them. And if that is done, the number of women entrepreneurs will increase, as well as reduce poverty.

Above all, future poverty eradication should focus on addressing the impact of climate change. If global warming increases by 1 degree Celsius, about one-fifth of this country will go under the sea, and 550 million people will be displaced. As a result, unless effective adaptation to climate change is ensured, it will not be possible to sustain our achievements in poverty eradication.

In short, we are about to enter a new phase of reducing poverty. In this new era, the roles of government and non-government stakeholders need to be redefined. Similarly, the objectives and implementation strategies of poverty reduction programmes should be changed.

The Writer is Emeritus Professor of Dhaka University and former Bangladesh Bank governor.