Bangladesh: Reducing Poverty and Sharing Prosperity (2023)

Challenge

Bangladesh is both an inspiration and a challenge for policymakers and practitioners of development. While the income growth, human development and vulnerability reduction efforts to date have been extraordinary, Bangladesh faces daunting challenges with about 22 million people still living below the poverty line. The country is at an important juncture: with the right policies and timely action, it can move up within the middle-income bracket. The World Bank has identified job creation as the country’s top development priority. To do so, Bangladesh will need to remove the barriers to higher growth posed by low access to reliable and affordable power, poor transportation infrastructure, limited availability of serviced land, uncertain and complex business regulation, rapid urbanization and vulnerability to climate change and natural disasters, among others.

Approach

The World Bank has been a longstanding partner of Bangladesh since its independence. The World Bank through its concessional lending arm—the International Development Association (IDA)—has committed more than $28 billion in grants, interest-free and concessional financing credits to Bangladesh. The World Bank has also been the largest external funder of Bangladesh providing over a quarter of all foreign aid to the country. The World Bank has been supporting the government’s efforts in economic development and growth, power, infrastructure, disaster management, climate change, human and social development and poverty reduction.

The World Bank Group’s Country Partnership Framework (CPF) for 2016-2020 supports Bangladesh to achieve its vision of reaching middle-income status by its 50th birthday in 2021. During the period, the World Bank Group’s technical and financial assistance focuses on (i) accelerating growth by helping to remove structural bottlenecks and provide financing to increase electricity supply and improve transport connectivity; (ii) foster social inclusion by building on Bangladesh’s impressive gains in human and social development; and (iii) strengthen climate and environmental management with the aim to enhancing Bangladesh’s resilience to natural disasters, improving water and natural resource management and modernizing agriculture. The framework is anchored in the government’s seventh Five Year Plan which covers the same period.

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Results

Decades of IDA financing has contributed to the achievement of results across a range of sectors as follows:

Education

  • Net enrollment rate at the primary school level increased from 80 percent in 2000 to above 90 percent in 2015, and at secondary school level increased from from 45 percent in 2000 to around 62 percent in 2015.

IDA is the largest external funder in the education sector covering the primary, secondary, and tertiary levels, as well as technical training and vocational training, and education for the hard to reach children. , including 55 percent of poor girls supported by a range of stipend programs.

Health

  • 40 percent reduction in maternal mortality, from 194 deaths per 100,000 live births in 2010 to 320 deaths in 2000.
  • 2.3children per woman in 2014, from around 3.3 children per woman during the 1990s.
  • 13,006 functioning community clinics in 2014.
  • 64 percent of pregnant women receiving Ante Natal Care (ANC) from a medically trained provider in 2014, up from 53 percent in 2007.

The World Bank is aligning its financing and technical support by supporting the government’s fourth Health Nutrition Population (HNP) sector program (2017-2022). The HNP program focuses on strengthening health system governance, management and service delivery capacities, and implemention of essential services package, with a focus on lagging regions — Sylhet and Chittagong Divisions.

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Rural Infrastructure

  • 800 km of new roads paved, 4,500 km rural roads in 26 districts maintained and 47 km of rural waterways dredged.
  • Road safety engineering measures implemented and community road safety awareness-building campaign ongoing.
  • 1.1 million people with access to clean water in rural areas.

IDA support for rural roads have helped people access schools and health facilities with reduced transport costs and less commute time; increased rural non-farm incomes; and created jobs for both women and men. Financing for piped and non-piped resources has improved people’s access to clean water, especially in areas with high arsenic and salinity infiltration.

Energy

  • Addition of 2,147 MW electricity to the national grid, and 100 MW to off grid through solar home systems with IDA support in the last decade.
  • More than 4 million households and shops in remote areas – such as the remote island of Sandwip — have installed solar home systems with support from IDA and other development partners.
  • Expansion in pilot solar irrigation pumps, solar mini grids and other renewable energy options and ione million improved cookstoves installed.

The World Bank is providing $1.66 billion to ongoing activities in the energy sector to enhance capacity, generate clean energy, improve transmission and system operation, reduce technical losses, as well as increase access to both grid and renewable electricity.

Agriculture

  • Over 1 million rural households modernizing farm practices and using new technologies with IDA support.
  • 500,000 households receiving through IDA financed project to increase grain reserve to meet their post-disaster needs, and improvements in the efficiency of grain storage management.

While the country has aving one of the fastest rates of agriculture productivity growth in the world since 1995 (2.7 percent per year, second only to China), this self-sufficiency is continuously threatened by a decrease of arable land by at least one percent per year, an increasing population and stagnating yields.

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Climate Change

  • 240 new cyclone shelters constructed; 387 km of embankment repaired; 501 solar irrigation pumps installed; 17,500 hectares of block plantations and 2,000 km of strip plantations completed in climate vulnerable areas.
  • 40,000 people residing in saline, flood and drought prone areas have received adaptive basic needs (house, water, agriculture, health) and livelihood support.
  • About 6,000 poor and forest dependent households in 200 communities participated in the alternative livelihoods support programs.

The World Bank, with IDA resources is helping Bangladesh build stronger disaster-coping mechanisms – such as schools that double as cyclone shelters – and these have significantly reduced the impact of recent storms, cyclones, and floods in terms of numbers of deaths and economic losses. The 2014 Climate Change Vulnerability Index ranks Bangladesh as the number one economy at risk to climate change. Bangladesh has been a frontrunner in adaptation and disaster preparedness.

Local Governance

  • Since 2006, IDA has been supporting a nationwide program that augments the government’s block grants to the all the Union Parishads (the lowest tier of elected local government, there are 4,504). The block grant enables Union Parishads to decide and spend on local priorities.
  • Since 2006, 130 million people benefited from the discretionary funds that a Union Parishad receives annually, which has grown by more than ten-fold.
  • 30 percent of the funds are managed by female members are managing 30 percent of the funds.
  • More than 35,000 community schemes generating employment for poor people have been implemented, including construction or rehabilitation of rural roads, culverts, drainage and embankment systems; water and sanitation facilities; and schools and clinics.

Local government institutions in Bangladesh traditionally had a limited role in delivering services to their citizens due to limited responsibilities coupled with lack of adequate resources. Under the ongoing third project financed by IDA, block grants are being institutionalized twith the government’s own resources and urban fiscal transfer system is being piloted in 16 municipalities.

Bank Group Contribution

IDA's portfolio in Bangladesh as of October 31, 2018, stands at $11.7 billion in 45 ongoing projects. In addition, there are 11 receipient executed trust funds totalling approximately – with a commitment amount of $74.2 million. IFC’s portfolio as of October 31, 2018 is $1.52 billion.

Partners

Aid coordination in Bangladesh is a crucial function, given the very large number of donors working in the country. The main mechanism for in-country donor coordination is the Local Consultative Group (LCG), composed of 32 bilateral and multilateral donors and the External Relations Division of the Ministry of Finance. The LCG’s goal is to ensure effective and efficient use of external aid in line with the government’s development priorities.

Progress on the ground will ultimately require a collective effort, and the World Bank Group has forged strong partnerships with an active donor community. Harmonized joint funding includes large health and education sector programs, and Multi-Donor Trust Funds (MDTFs). The Strengthening Public Expenditure Management Program MDTF is supporting the implementation of the next phase of the Public Financial Management Strategy 2016-2021. This includes support to the modernization of core business processes, roll out of the Integrated Budget and Accounting System, and the adoption of the new Budget and Accounts Classification System. In this phase of the MDTF, financing is provided by three development partners Department for International Development (United Kingdom), Global Affairs Canada and European Union). Discussions are under way for several development partners to provide parallel financing to support Ministry of Health and Family Welfare, and Ministry of Primary and Mass Education to improve service delivery and to strengthen fiduciary systems. Under a Single-Donor Trust Fund arrangement, the U.S. Agency for International Development provided support to the health sector through the end of December 2017 and continues to support the National Agricultural Technology Program - Phase II Project (NATP2); International Fund for Agricultural Development also provides joint funding for NATP2.

Moving Forward

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Engagements from the previous strategy that promote inclusive growth – notably in health, education, and social protection, as well as in revenue mobilization, financial sector support, and the business environment – will continue. The Country Partnership Framework (FY2016-2010) also gives greater prominence to policy reforms and makes policy dialogue an integral building block in the country program with the potential to create jobs, increase competitiveness, and boost shared prosperity.

Building on Bangladesh’s remarkable achievements to date – in reducing income poverty, improving health outcomes and educational attainment, empowering girls and women, and building the beginnings of a labor-intensive export-oriented economy that can support further gains in the near future – the World Bank will continue to work with this dynamic and resilient country, to reduce poverty and bring prosperity to all Bangladeshis, especially the poor.

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FAQs

What has Bangladesh done to reduce poverty? ›

Shortly after its independence, approximately 9% of the population lived under the poverty line. However, since economic reforms and trade liberalization of early 1990s, along with accelerated economic growth since early-2000s, Bangladesh have experienced a dramatic progress in reducing poverty.

Why is Bangladeshi model for poverty alleviation successful? ›

These initiatives are the prioritized sectoral arrangements initiated and materialized broadly under the social safety net programs (SSNP). These are the set of various programs for uplifting livelihood targeting the socio-economic status of the poor. And this popularizes the Bangladesh model for poverty alleviation.

What are the steps taken to reduce poverty? ›

Direct Attack on Poverty: Special Employment Schemes for the Poor.
  • Speeding up Economic Growth. ...
  • Rural Growth and Poverty Alleviation. ...
  • Quick Development of Infrastructure. ...
  • Speeding up Human Resource Development. ...
  • Development of Non-Farm Employment. ...
  • Admittance to Credit. ...
  • Public Distribution System (PDS)
7 Aug 2022

What are four ways to reduce poverty? ›

Below are eight effective solutions to poverty:
  • Educate children.
  • Provide clean water.
  • Ensure basic health care.
  • Empower a girl or woman.
  • Improve childhood nutrition.
  • Support environmental programs.
  • Reach children in conflict.
  • Prevent child marriage.
3 Nov 2021

What is the success of Bangladesh? ›

ECONOMYNEXT – In the last three decades Bangladesh has recorded the fastest and most stable rate of GDP growth among developing countries and is now recognized as among the top 40 economies of the world.

How does the government of Bangladesh measure poverty? ›

This study suggests using the Multidimensional Poverty Index (MPI) as a more accurate method for measuring poverty in Bangladesh. The MPI represents significant progress in the measurement of poverty in an internationally comparable way.

How can we reduce inequality in Bangladesh? ›

Another important way to reduce inequality is to reform social security programme. It is necessary to increase the coverage of social security for the extremely poor and bring about a major change in the per capita allocation.
...
More about:
  1. Bangladesh.
  2. economy.
  3. inequality.
2 Jun 2022

How government plays an important role in poverty alleviation? ›

Firstly, governments play a key role in helping facilitate private sector involvement in poverty alleviation by ensuring that public infrastructure such as roads and transport systems, communication systems, electricity, water and sanitation systems are established and maintained.

Why is it important to reduce poverty? ›

Poverty is associated with a host of health risks, including elevated rates of heart disease, diabetes, hypertension, cancer, infant mortality, mental illness, undernutrition, lead poisoning, asthma, and dental problems.

Why is it important to reduce poverty and inequality? ›

Growing inequality prevents sustainable development, reduces economic growth and damages social cohesion within societies. There is now an international consensus that reducing inequality is essential to putting an end to poverty by 2030.

Does reducing inequality reduce poverty? ›

If the Gini index in each country decreases by 1% per year, the global poverty rate could reduce to around 6.3% in 2030, equivalent to 89 million fewer people living in extreme poverty.

What is the best way to reduce inequality in the society? ›

Governments can reduce inequality through tax relief and income support or transfers (government programs like welfare, free health care, and food stamps), among other types of policies.

Is Bangladesh a prosperous country? ›

The economy of Bangladesh is characterised as a developing market economy. It is the 35th largest in the world in nominal terms, and 25th largest by purchasing power parity. It is classified among the Next Eleven emerging market middle income economies and as a frontier market.

How has Bangladesh improved their country? ›

Since its founding in 1971, Bangladesh has emerged from overwhelming poverty to be proclaimed by The World Bank in 2020 as 'a model for poverty reduction'. It achieved the highest cumulative GDP growth globally from 2010 to 2020 and is now on course to become a developed country by 2041.

How can Bangladesh solve economic problems? ›

Bangladesh should create awareness on family planning program. As a result per capita, income will increase. The education rate of common people should increase. The government should implement a technical education system, training everywhere.

What is one of the main causes of poverty in Bangladesh? ›

Bangladeshis as well as foreign observers most commonly cite overpopulation as the cause of poverty. Population growth is a cause of present poverty in Bangladesh but is not the only cause of poverty.

Why is poverty a problem in Bangladesh? ›

Although there are many causes of poverty in Bangladesh, some of the main culprits are calamitous weather, weak infrastructure and gender inequality that prevents women from contributing to the economy. One of the factors that generate poverty is the prevalence of natural disasters.

What is Bangladesh's national poverty line? ›

In Bangladesh, the proportion of employed population below $1.90 purchasing power parity/day in 2021 was 4.0%.

How do you promote and reduce inequality? ›

10.3 Ensure equal opportunity and reduce inequalities of outcome, including through eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and actions in this regard
  1. Equality.
  2. Future of Work.
  3. Gender Equality and Non-Discrimination.

What measures can be taken to reduce inequality? ›

Wealth redistribution through steeper inheritance taxes, promotion of broader ownership (e.g., greater worker ownership), and socialization or redistribution of capital and land equally to all citizens are ways to reduce income inequality indirectly, as they will equalize the unearned income that derives from ownership ...

What are three ways to reduce income inequality? ›

12 Tools to Reduce Income and Wealth Inequality
  • Raise wages and other benefits.
  • Make the income tax system more progressive.
  • Cap the ratio of top executive pay to worker's pay.
  • Raise the tax on carried interest.
  • Remove or reduce home mortgage interest deduction.
11 Feb 2021

How government and economic policies can reduce poverty? ›

The earned income tax credit is an effective way to reduce poverty. It raises only the after-tax wage rates of workers in low- and moderate-income families, the tax credit increases with the number of dependent children, and evidence shows that it increases labor force participation and employment in these families.

Which is most important to reduce poverty? ›

Economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries.

How is poverty beneficial to society? ›

The poor make the mobility of other groups possible because the poor are excluded from the competition to get a decent education and job. The poor contribute to cultural activities, such as being a low paid worker for the construction of the monument and other art objects.

What is the impact of poverty in the economy? ›

Lack of economic opportunity leads to impoverishment which then leads to crime. Global unemployment is at a high point. One hundred ninety-two million people around the world are jobless. In some parts of the world, mainly poor parts, unemployment standings will drive this number higher.

How does economic growth reduce poverty? ›

Economists believe that economic growth benefits nearly all citizens of a country and therefore reduces poverty. If economic growth raises the income of everyone in a society in an equal proportion, then the distribution of income will not change.

What are the benefits of reducing inequality? ›

Inequality drives status competition, which drives personal debt and consumerism. More equal societies promote the common good – they recycle more, spend more on foreign aid, score higher on the Global Peace Index. Business leaders in more equal countries rate international environmental agreements more highly.

How can developing countries reduce poverty? ›

Develop and implement rapid and sustained economic growth policies and programs, in areas such as health, education, nutrition and sanitation, allowing the poor to participate and contribute to the growth. Studies show that a 10 percent increase in a country's average income reduces poverty by as much as 20-30 percent.

How does inequality help the economy? ›

At low-income levels, inequality tends to boost economic growth by increasing physical capital investment. As income levels increase, human capital becomes more important than physical capital, and inequality tends to impede economic growth by affecting human capital accumulation.

How government can reduce the inequalities in the society? ›

Redistribution. Redistribution means taking income from those with higher incomes and providing income to those with lower incomes. Earlier in this module, we considered some of the key government policies that provide support for the poor: the welfare program TANF, the earned income tax credit, SNAP, and Medicaid.

How can we improve our society? ›

7 Ways to Make the World a Better Place
  1. Volunteer your time at local schools. Whether you have a school-age child or not, children are the future of this world. ...
  2. Recognize the humanity of other people, and respect their dignity. ...
  3. Use less paper. ...
  4. Drive less. ...
  5. Conserve water. ...
  6. Donate to clean water charities. ...
  7. Be generous.

What are the top solutions to income inequality? ›

Expand Medicaid under the Affordable Care Act. Raise the minimum wage and index it to inflation. States can raise wages for workers at the bottom of the pay scale by enacting a higher state minimum wage and indexing it so that it keeps up with rising living costs. Protect workers' rights.

What are the steps of Prevent for over population in Bangladesh? ›

Top 12 Ways to Reduce Population in Bangladesh (with Pictures)
  • Campaigns to spread the message. ...
  • Counseling for citizens. ...
  • Schemes to motivate people to use birth control options. ...
  • Creating options for child adoption. ...
  • Reducing infant mortality.

Do you think that poverty alleviation strategies in Bangladesh are effective? ›

Bangladesh has done remarkably well in reducing poverty and improving living conditions. The country halved poverty rates in a decade and a half, lifting more than 25 million people out of poverty. Between 2010 and 2016, about eight million Bangladeshi people exited poverty.

What are the 3 methods of population control? ›

Population control may use one or more of the following practices although there are other methods as well: contraception. abstinence. medical abortion.

What is the main solution to prevent overpopulation? ›

Easy, affordable, and reliable access to contraceptives and birth control is a major factor in preventing unplanned births and is one of the stronger overpopulation solutions. Improved education improves the use and efficacy of these but they must be available and accessible.

What are two ways to control overpopulation? ›

5 possible solutions to overpopulation
  • Empower women. Studies show that women with access to reproductive health services find it easier to break out of poverty, while those who work are more likely to use birth control. ...
  • Promote family planning. ...
  • Make education entertaining. ...
  • Government incentives. ...
  • 5) One-child legislation.
10 Jul 2017

What is the most important method of poverty alleviation? ›

Poverty reduction can be attained by stimulating economic growth to increase incomes and expand employment opportunities for the poor; undertaking economic and institutional reforms to enhance efficiency and improve the utilization of resources; prioritizing the basic needs of the poor in national development policies; ...

What are three poverty alleviation Programmes? ›

Schemes like Pradhan Mantri Awas Yojana and Housing for All by 2022 were developed to provide housing to the rural and urban poor. The latest government schemes like Start-Up India and Stand Up India focuses on empowering people to earn their livelihood.

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