Poverty Reduction: Optimism reflects in pessimist’s eye
The shocking reality of life is that abject poverty denies human beings the minimum of decent living. No one hopes of ending poverty in the life of the present generation. The world population numbers 6 billion now, of whom half are poor. Dividing the poor into absolute or extreme poverty, moderate poverty and relative poverty, the experts concentrate on 1.1 billion people who get by on an income of less than US $ 1 dollar a day and belong to the extreme poverty category. These are the poor who cannot meet basic needs for survival. They remain continuously hungry and have no or little access to health care, safe drinking water, sanitation, education for their children and rudimentary shelter. The extreme poverty is that that kills.

The World Bank estimates, the total number of people living in extreme poverty was down to 1.1 billion from 1.5 billion in 1981. The one sixth of humanity in extreme poverty are victims of AIDS, drought, civil wars and is thereby trapped in a vicious circle of deprivation and death. The situation in Africa is being the worst in the crucible of poverty and the situation is worsening.

After reviewing the history of economic development and the concomitant growth of poverty that divide the world, experts point out that there is no single factor that explains the poverty in the developing countries and considers sayings like “people are poor because they are poor,” . The failure of the Third World to grow as rapidly as the First World is the result of a complex mix of factors, some geographical, some historical and some political. The brutal forms of exploitation of the poor during colonial era as much as the misguided policies of rulers in newly independent countries worked as the causes. Many regions that get left behind have faced special obstacles like killer diseases, drought-prone climate, isolation that hinder contact with developed parts of the same country, absence of energy resources and other handicaps that have kept them outside the mainstream of global development. The impediments faced by poor countries to market access in the developed countries are also a prominent factor that works behind poverty.
The present generation, in the US and around the world, can choose to end extreme poverty by the year 2025. The development economics needs an overhaul in order to be much more like modern medicine. This involves looking at each poor country from the point of view of its resource endowment and special circumstances. Like a medical doctor there is the need to prepare case histories of each country and zero in on its ailment and cure. There is nothing new in this approach. The Country Strategy Report (CSR) prepared by the World Bank does exactly that routinely.

Getting capital either through aid or trade is necessary but not sufficient to lift the extremely poor countries out of their present morass. The sources of poverty are multi-dimensional and so are the solutions. The rich countries will be more interested to help the poor because of enlightened self-interest. But so far there has been no sign of a change of heart on the part of rich countries to be convinced of this. In the Summit held in New York in September America said bluntly that it did not believe in quantifying aid. The target of 0.7 percent of GDP of rich countries to be given as aid is dead.

The other side of poverty
Taken below $ 1 per head per day income as the demarcation line for extreme poverty, Bangladesh with its population of 140 million has above 72 million people who on average command more than one US dollar as income per day, leaving some 68 million below the poverty line.

The present market size of over 72 million people with reasonable purchasing power is not a small one. The demand for various types of goods and services generated by the number of people not suffering from poverty in the country is huge and provides ample opportunities for businesses, local and foreign. But the demand situation could be far higher if some 30 or 40 million more people could be helped to climb out of poverty at an early date.

The point is that people not in poverty have considerable purchasing power which they translate into demand for goods and services. The businesses can attempt to satisfy that demand with more production, distribution and consumption. It stimulates the entire cycle of economic activities, economy spins faster when more people create demand. The resulting increases in production activities, job and income creation all help boosting the GDP size of the country to increase cumulatively its individual and national wealth. Poverty reduction makes preeminent sense from the perspectives of economic growth, business expansion and rise in the overall standard of living of people and these are expressly the reasons for the high desirability of poverty reduction at a faster pace.

There has been notable success in poverty reduction since the pre-independence era when the population was smaller but the preponderant majority lived in absolute poverty. The situation has changed appreciably with the greater number in the population seemingly judged to be out of the throes of poverty. But, as stated, the number of 68 million living on less than a dollar a day -- the UN benchmark for determining poverty -- is still a vast one and points to the formidable goal faced by Bangladesh in achieving substantial progress and decisive victory in the struggle against poverty. Poverty reduction is ultimately linked to economic expansion or economic growth. Bangladesh is often pointed at as a lucrative market as it has so many people living in it.


The Inequality Predicament
It is conventional to measure progress through per capita gross national product and its year-over-year growth. It was believed that the trickle-down effect would take care of income distribution and poverty with time. This has not come to be. As a matter of fact, in the wake of free market and globalization, disparity has been accentuating both globally and within nations. Inequality has been sharply increasing.

Consequently, poverty reduction is now the buzzword at the World Bank and the IMF, regional development banks, and other international and regional organizations. The Millennium Development Goals (MDG) of the United Nations focus upon poverty eradication and most developing countries have prepared or are preparing their national poverty reduction strategy papers (PRSP). Only time will tell, if the poverty levels of 1990 will be halved by 2015 as the Millennium Development goals of the United Nations envisage..
Regarding income inequality, it is estimated that one billion people living in the developed world own 80 per cent of the world's gross domestic product, while the overwhelming majority, a total of 5.4 billion, living in the developing countries have to make do by sharing the remaining 20 per cent. More than one billion people in the world live on less than US$1and another 2.7 billion on less than US$2 per person per day.
With regard to Bangladesh, the country's average per capita gross national income is very low at US$ 466 (2004-05) with income distribution highly skewed and worsening. The national income share of the richest 5 per cent is estimated at almost 40 per cent at present. By comparison, the poorest 5 percent have an abysmally small share of 0.60 per cent. After decades of effort at development, the reality is, and pardon the cliché, the rich have gotten richer and the poor poorer.

It is often argued that this is not the whole truth and that the common people are better fed, clothed and housed than they were, say, 30 years ago. However, it remains a fact that the disparities in incomes have accelerated during the same period. Unemployment is growing and incomes including of those employed in the readymade garments industry are very low. The rich, by contrast, are making a lot of money through their market power and through shady deals and black market operations.

The situation in Bangladesh vis-à-vis South Asia and Low-income economies as shown below is quite encouraging on many fronts particularly in the areas of primary school enrollment and life expectancy at birth. Clearly, the matter of concern is poverty. One can only hope that the Bangladesh PRSP addresses this issue successfully.

Poverty & Social	Bangladesh	South Asia	Low Income
Population, mid-year (millions)	140.5	1448	2338
GNI per capita (Atlas method, US$)	430	590	510
GNI (Atlas method, US$ billions)	60.9	860	1184
Average annual growth, 1998-04
Population (%)	1.7	1.7	1.8
Labor force (%)	2.2	2.1	2.1
Most recent estimate (latest year available, 1998-04)
Poverty (% of population below national poverty line)	50	..	..
Urban population (% of total population)	27	28	30
Life expectancy at birth (years)	62	63	58
Infant mortality (per 1,000 live births)	46	66	79
Child malnutrition (% of children under 5)	52	48	44
Access to an improved water source (% of population)	75	84	75
Illiteracy (% of population age 15+)	59	41	39
Gross primary enrollment (% of school-age population)	96	97	94
Male	94	105	101
Female	98	92	88