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Remittance reduces poverty, widens east-west divide: WB PDF Print E-mail
Monday, 24 November 2008

Dhaka, Nov 23 (—Bangladesh's rapid growth in remittance, while helping to reduce poverty, has reinforced regional inequalities, according to a World Bank poverty assessment report released Sunday.

The report said Bangladesh could halve the proportion of poor people in the next 6 years, having significantly reduced poverty levels over the past decade.

But, it added, the existing safety net programmes are inadequate, even after considerable expansion of social sector allocation in the budget.

The western part of Bangladesh lags behind the eastern part in poverty reduction, with the Jamuna and Padma rivers, flowing into the Meghna, creating a natural boundary between unequal geographical regions, reads the report 'Poverty Assessment-Creating Opportunities and Bridging the East-West Divide' launched at the World Bank's Dhaka office.
Infrastructure improvements, particularly the Padma Bridge, availability of power and gas and better connectivity to markets are necessary to spread growth to lagging regions, according to the lead authors of the study, Ambar Narayan and Hasan Zaman.

The poverty rate in 2005 stood at 32% in Dhaka division and 34% in Chittagong and Sylhet, but over 45% in the western divisions of Khulna, Barisal and Rajshahi, said the Bank.

However, if regional inequalities can be erased, with current growth rates and continued reduction in fertility, Bangladesh could achieve the MDG of halving poverty by 2015, the study suggested.

"It is encouraging to see that Bangladesh is on track to attain most of the Millennium Development Goals," country director Xian Zhu msaid at the report's launch.

But malnutrition still is unacceptably high in Bangladesh, which might have been worsened by the recent food price shock, he said.

He also pointed out that poverty reduction is not just about improving household income but also about enhancing human capability.

"To protect the vulnerable, existing safety net programmes needs to be more coordinated, like the recent reform in the Philippines to set up a central coordinating body," Zhu added.

The report finds that public spending per capita in education and health is among the lowest in South Asia, and greater progress in these areas would allow the poor to access opportunities in urban centres to reduce the rich-poor and east-west divides.

According to WB, around 2.2 million new jobs per year will also need to be created over the next decade—twice the rate of job creation between 2000-05 as there has been a sharp increase in number of people entering the job market.

The report shows productivity growth in agriculture and job creation in manufacturing is vital for accelerating poverty reduction, as is sustained growth in remittances from overseas employment.


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