|World Bank insiders looking in on Bangladesh poverty
“...governance cannot be narrowly about structures and rules. It is equally about process, outcomes and the agency potential of the citizenry. From the vantage point of the poor, there is a necessity to combine four critical goals within the governance agenda, namely, development outcomes, behavioral norms, process efficiency and ethics. A uni-dimensional pre-occupation with a narrowly deterrent-centric anti-corruption agenda misses the point that, unless desired economic outcomes such as the price control of essentials and ensuring minimum livelihoods are simultaneously addressed, social support for governance reforms may wither.” Sanctimonious stuff, this, considering that the reality of governance in Bangladesh is that the structures and rules are so often abused by those in authority, including by the particularly devious and disastrous last caretaker administration, of which the writer of the piece (Chapter 10, “Poor and the Governance Process in Bangladesh”), Hossain Zillur Rahman, was a part. The process, outcomes and agency potential that indubitably are critical to good governance are themselves in an unsatisfactory state, and it would be an interesting debate trying to figure out if the narrow set is hampering the healthy development of the broader set, or if it is the other way around.
The ten chapters making up Breaking Down Poverty in Bangladesh have been written, both singly and collectively, mostly by World Bank (WB) insiders (eleven in all), two Dhaka University Economics department faculty members, a UNESCO senior policy analyst, and Zillur Rahman of PPRC. The period from 2000 to 2005 has been taken as the time span for studying poverty in Bangladesh in almost all the articles. The editors explain the background to the book and its objective: “This book is an edited compilation of select background papers produced for the World Bank (2008) report “Bangladesh Poverty Assessment: Creating Opportunities and Bridging the East-West Divide.” These papers cover a range of areas related to recent trends, patterns and determinants of poverty reduction in Bangladesh, each aiming to contribute to the debate on policy directions for the country.” The articles end with policy directions all right, but several could conceivably be hotly contested on grounds of simply carrying social engineering agenda of WB (and bilateral western donors) without taking into consideration certain deep-rooted social and cultural realities of this country.
Marcin Sasin in “Making Work Pay: Growth, Employment and the Labor Market in Bangladesh” (Chapter 4) advances the rationale for focusing on the period 2000-2005: “...this was the period in which Bangladesh witnessed a spectacular decrease in the extent of poverty, in which the labor market, employment and productivity played an important role. In addition, relatively good data was available for this analysis.” Interestingly, an elected government, pronounced serious dysfunctions and all, was in office during that time, reinforcing a general wisdom that, in a democracy, an elected government, rather than any concocted potpourri like the caretaker system, has better credentials and latent capacity for delivering the development good, even if the path taken may be strewn with self-made craters, and the process of democracy twisted, very likely for an extended period. Almost all the chapters begin with a rephrasing of the mantra set in the Preface: “Bangladesh represents a success story in poverty reduction among developing countries, particularly since the early 1990s.” Not a few specialists in the field of economics qualify this encouraging assessment with cautionary notes pertaining to it, and a couple of these will be taken up in due course. Before doing that, however, let us find out what the editors have to say: “The primary contributing factor behind the reduction in poverty was robust and stable economic growth along with no worsening of inequality.”
But the inequality factor is serious, grave enough for the editors to acknowledge: “For all its progress, however, Bangladesh remains a poor country --- with...wide disparities in incomes and human capabilities across income and occupational groups, gender, and regions.” In Chapter 1, “Trends and Patterns of Poverty in Bangladesh in Recent Years”, Ambar Narayan, Nobuo Yoshida and Hassan Zaman believe that labor-intensive manufacturing, particularly RMG, micro- and small-scale non-farm enterprises, and remittances from migrant workers have been the driving forces behind economic growth. This has led to reduction in consumption poverty, a phenomenon “also mirrored by substantial improvements in living conditions --- including housing characteristics, and access to sanitation facilities, electricity and communications” (Chapter 2, “A Profile of Poverty in Bangladesh: Household Attributes, Location Effects and Changes Over Time” by Aphichoke Kotikula, Ambar Narayan and Hassan Zaman). The inequality factor within Bangladesh is exacerbated by regional inequality, with attendant problems cropping up for the entire country, one aspect of which is explored by Forhad Shilpi in “Infrastructure, Migration and Regional Inequality in Bangladesh” (Chapter 5).
The debate regarding higher growth leading to greater inequality has long been a familiar one, with the book under review generally echoing the WB line on going for economic growth. Mirza Azizul Islam, in an op-ed piece in The Daily Star (3 September 2009) concludes that “increased inequality is an inescapable consequence of growth, if not a precondition.” A number of economists, other social scientists and policymakers have strongly made a case for the kind of growth that takes reduction of inequality into consideration. Nonetheless, Islam passionately advocates the growth strategy: “Bangladesh needs to accelerate growth in order to alleviate poverty at a faster rate. At the present stage of development, poverty alleviation should receive the highest priority, not inequality of income distribution.”
And Breaking Down Poverty in Bangladesh holds that the percentage of Bangladeshis living in poverty fell significantly from 57 percent in 1991-92 to 49 percent in 2000 to 40 percent in 2005 (Chapter 9, “Are the Poor Protected?: Vulnerability and the Role of Safety Nets” by Shaikh Shamsuddin Ahmed, Ambar Narayan and Hassan Zaman). However, the authors note, by the 1990s, it became clear that the microfinance programs were not able to reach a large proportion of the poorest of the poor, an unsatisfactory situation that has led them to advocate “a comprehensive social protection strategy.” Others have noted the limitations of microfinance in poverty alleviation. Alistair Orr, et al, in Pathways from Poverty: The Process of Graduation in Rural Bangladesh have found that microfinance has inbuilt limitations as a graduation tool. “Although microfinance was useful in climbing the ladder from poverty,” they conclude, “small loan size and weekly repayments limited the number of rungs that households could climb. Graduation needed bigger investments with higher returns. This meant relying on formal sources of credit that demanded collateral.”
Bazlul H. Khondker and Selim Raihan's “Poverty Impacts of Remittances and Garments: A Computable General Equilibrium Analysis” (Chapter 6) is both interesting and instructive. They find that “...almost a quarter of the poverty decline between 2000 and 2005 in Bangladesh is attributed to the combined impacts of growth of RMG export and Remittance.” Furthermore, “...remittance growth might have played a greater role in reducing poverty in Bangladesh over this period than the growth of RMG exports.” So, if remittances were to go down, it stands to reason that poverty alleviation would at least be badly affected. But remittances have been increasing at a record pace over 2008-09, as given out by Bangladesh Bank, alluding to a promising future in poverty alleviation. However, the number of Bangladeshi workers in foreign countries has also been retrenched in worrying numbers over the same period. Could it be, then, that the increased remittances represent the money of the retrenched workers who had no option but to sell all their properties in those countries lock, stock and barrel, and remit the returns before returning home? That would mean a monetary reserve situation flattering to deceive, and the imperative for the government to explore new places for this country's migrant labour force.
In “Bridging Gaps Across the Health Sector” (Chapter 8), Tania Dmytraczenko, Tahrat Shahid, and Nistha Sinha come up with a judicious statement that should be applicable to governance in general, beyond that of the specific area that it alludes to: “If the political commitment remains strong to introduce further reform while sustaining effective policies from past experiences...the country may well overcome...challenges on its path towards better health and nutrition outcomes across the Bangladeshi population.” If one can look beyond the obvious WB agenda advocated throughout the book, particularly those that one does not particularly care for, Breaking Down Poverty in Bangladesh is worth reading, not the least for insights into various aspects of poverty afflicting the country.
Dr. Shahid Alam is Head, Media and Communications Department, Independent University Bangladesh (IUB)