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Saturday, December 20, 2014

Sunday, November 28, 2010
OP-ED

The great escape

The poorest 10% of the population lack the human and social assets to escape poverty. The drivers of growth have by-passed such groups over an extended period of time and households that remain in poverty today, suffered from poverty 20 years ago. A multitude of multilateral, bilateral, GOs and NGOs will praise the successes of Bangladesh, to reduce income poverty from its zenith of 74% in 1973-74 to less than 40% in 2005. This is, to all intents and purposes, a significant achievement and one which should be lauded. Not for the efforts of any one institution, or the placebo of policy prescription by global institutions, but as an evolving understanding on what will lift people from poverty.

The poverty faced by Bangladeshis today involves two types of disadvantages -- "social" and "spatial." The social reflects the face of specific groups of chronic poor embedded across class, caste, ethnicity and religion. The spatial highlights the inability of households in geographical areas with reduced capabilities to access economic growth centres, or benefit from the drivers of change. These households remain mired in the monotony of a single livelihood, and are often dependent on climatic benevolence or the philanthropy of chance for daily survival.

Over the past four decades, land holdings have gradually become smaller, and between two agricultural censuses of 1983-84 and 1995-96 the total availability of agricultural land has declined by about one million hectares. Conversely, productivity by output has improved. This has not directly impacted on a reduction of income poverty. Studies have repeatedly revealed the inability of farm-based activities to solely impact on a long-term sustainable reduction of poverty as well as ensure national food security.

In a new publication, "Global poverty and the new bottom billion: Three-quarters of the World's poor live in middle-income countries," the Institute of Development Studies in the UK reveals that the majority of the world's poor live in Middle Income Countries (MIC). While this finding may not be revelatory it reflects the aspirations of once poor countries to race towards industrialisation, creating immense wealth disparities and social inequalities. The government has set the milestone of 2021 for Bangladesh to join this club. Can Bangladesh do it differently?

The expansion of cities remains a global trend, with an expected growth of more than 50% of the populations of least developed countries living in cities by 2045; urbanisation, and more pertinently, industrialisation, remains the locus of the argument for a re-orientation of the understanding of poverty reduction.

The imagery of a lush green-golden field encapsulated by amar shonar bangla (my golden Bengal) used in the process of nation-building in the early years of independence, reflected an era of socialisation where independence, freedom and progress were seen through the lens of self-sufficiency, emancipation and nationalism. This was a bold era of centralised planning and idealism! Does this real sense of agrarian nationalism correspond with virtual world of "Digital Bangladesh"?

In an interconnected world (hastened by the internet superhighway) where the demographic explosion (across Asia) has created a pyramid of expectations added with changes in human, physical, financial and natural assets of the poor, Bangladesh lies at the doorsteps of change. The MDGs sharpened the focus for poverty reduction practitioners and galvanised protagonists in the theatre of change, however, least developed countries are not satisfied with merely playing the bit part; they want the lead.

Escaping poverty remains elusive for 30 million Bangladeshis constituting the bottom 20% of the population in 2005. Binayak Sen, in his 2003 article, "Drivers of Escape and Descent: Changing Household Fortunes in Rural Bangladesh," identified human capital as a key source of income growth and an important trigger for economic and social well-being.

Human capital has the strength to facilitate movement from lower-wage agricultural activities to higher wage non-agricultural activities where skill requirements are higher. Sen also argues that the accumulation of non-agricultural assets has played an important role for households that successfully escaped poverty.

Households suffering from chronic poverty do so, centrally, as a result of a lack of access to resources. This includes both cultivable land as well as value-added skills towards non-farm activities. Sen's study also revealed that the proportion of the workforce engaged in non-agricultural activities has increased from 38% in 1987-88 to 56% in 2000 for households escaping poverty, households suffering from continuous poverty, 23% to 38%, and households descending further into poverty lay at 26% to 35%.

The trend amongst all three groups highlights that escape from poverty is dependent on occupational diversification, especially the capacity to switch from lower-productivity agricultural activities to higher productivity non-agricultural activities.

The government has placed important emphasis on digitalising Bangladesh as well as instituting "ekti bari ekti khamar" in the future five-year plan (replacing the PRSP). One needs to decipher the policy narrative from the political rhetoric. Digitalising places Bangladesh at the foothills of the global charge towards improved cyber connectivity, a trend first started in South Asia by Indian Prime Minister Rajiv Gandhi when he modernised the telephony network.

Gandhi's plan ensured that India was able to capitalise on major corporations transferring call-centres in the '90s and also creating the space for success stories such as Infosys. Similar plans are already underway in Bangladesh. Upgrading telephony services and cyber connectivity bode well for inward investment but also reflect the undercurrent of modernisation or more pertinently, industrialisation.

The growth of intra-country and inter-country migration clearly identifies the need to re-orient government policy on creating job opportunities in the secondary and tertiary sectors. The growth of major conurbations and industrial centres, combined with a burgeoning population, highlights the need to depart from an exclusive farm-centred rural development policy to one which focuses on an industry oriented urbanising master plan.

Donors and the government will do well to learn from countries within the region on the route to building the industrial superstructure, cementing the cracks within the governance framework and creating an educated work-force in order to ensure double digit economic growth. However, the merits of such efforts will be judged not by the skyscrapers which adorn cities such as Bangkok, Kula Lumpur, Mumbai or Shanghai, but on their ability to insure the very poorest benefit from such drivers.

The catalysts of change are multiple and multifaceted and the government needs to be creative and open in order to ensure that economic drivers support pro-poor growth, so that those below the bottom of the ladder can discover an escape route out of poverty.

Sanjan Haque works at shiree. E-mail: sanjan@shiree.org

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