Another 4m drop below poverty line
Friday, 29 August 2008

Claims WB official

Desk Report

Some four million more people have dropped below the poverty line in Bangladesh due to the sustained rise in prices of staple foods and other essential commodities, a World Bank official in Dhaka claimed Tuesday.

Vinaya Swaroop, the lender's lead economist in Dhaka, said the Bank had expected poverty to decline by five percentage points over 2005-2008 helped by a 6 percent annual growth.
But abnormal hikes in commodities prices hit the hardcore poor hardest, increasing their number by 3 percentage points or around 4 million, he said presenting what the preliminary findings of a report on the economics of the food crisis in Bangladesh.
World Bank resident representative Xian Zhu, who also spoke at the WB Dhaka office in Sher-e-Bangla Nagar, said the term food crisis "somewhat loosely referred to the availability and price of rice", the staple food of Bangladesh.
Both officials said a bumper boro meant Bangladesh had not faced any supply deficiency but that the poor continued to suffer because of the price tag, which had not fallen below Tk 32 per kg and spiked to Tk 36 in April this year.
Over the last three years (fiscals 2005-06 to 2007-08), the poverty rate in Bangladesh dropped by just two percentage points as a consequence, Swaroop said.
He referred to the last available figures from the Bangladesh Bureau of Statistics which said that in 2005 some 40 per cent people of Bangladesh lived under poverty level. According to the World Bank, at the end of the fiscal year 2007-08, the firgure stood at 38 percent.
In May-June, Bangladesh harvested a record 17.8 million tonnes of boro rice, thanks largely to timely supply of input for farmers.
Xian Zhu said the government should look into why the price of rice was not responding to good supply.
He pointed out that the country had overcome a major food availability problem, and the national food policy (2006) emphasises both short-term and longer term solutions to cope with domestic and external shocks.
In this respect, he praised the present government's expansion of Open Market Sales in urban areas and social safety net programmes in rural areas.
Swaroop also highlighted the government's allocation of $1 billion dollars to food related programmes in the present budget compared to the last budget's $250 million dollars.
The World Bank will provide budget assistance to the government for these programmes, the economist said, alongside technological assistance to boost agricultural production.
According to BBS figures, in 1991-92 some 56.6 percent people of the country lived under the poverty line. In 2000, the figure came down to 48.9 percent. In 2005 it fell further to 40 per cent.
After 2005 there has been no household income and expenditure survey in the country. As a result no government information regarding increase or decrease of poverty has been available.
Private research organisation Centre for Policy Dialogue in a poverty research report, published in June last year, said from 2005 to May 2008 some 8.5 percent people fell below the poverty line mainly due to inflation. The price of rice increased by 80 percent, CPD reported, while the price of other food and commodities also rose.

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