Routledge Handbook of Contemporary Bangladesh by Riaz Ali; Sajjadur Rahman Mohammad;

Author:Riaz, Ali; Sajjadur Rahman, Mohammad;
Language: eng
Format: epub
Publisher: Taylor and Francis

Beneath the macro picture: micro-level ups and downs

The macro data presented in the earlier sections, while illuminating, do hide an important part of the reality. They do not tell us that during a particular period, when many people escape poverty, many non-poor households may simultaneously descend into poverty. An escape from poverty today is no guarantee of a life free of poverty; reversals are part of the harsh reality for many Bangladeshis living at the margin.

Sen (2003) provides a fascinating portrait of such dynamics based on a panel data-set for two points in time, 1987–1988 and 2000. The 21-village study, covering 379 rural households, suggests a drop in the poverty headcount ratio from 57 to 49 percent over this period. This is consistent with the macro-level findings from the HIES data for the same period.

However, as Sen observes, ‘While the incidence of poverty in general has declined there are winners, losers, and “break-even” households.’ Some 119 households (about 31 percent of the sample) were poor in both time periods; this is the ‘always-poor’ category. At the other end of the spectrum, 95 households (25 percent) classified as ‘never-poor’ were above the poverty line in both periods. The two intermediate categories saw fluctuating fortunes, in one case for the better and in the other for the worse. Sen terms the first the ‘ascending households’. The 98 households in this category (26 percent of the sample) escaped poverty during this time. The other group, the ‘descending households’, were non-poor in 1987–1988 but, by 2000, these 67 households (18 percent) had slipped below the poverty line. The net poverty reduction rate is thus 8 percent, roughly consistent with aggregate poverty measures for the same period.

The above findings are instructive. They suggest that higher rates of poverty reduction can be achieved if steps are taken to prevent vulnerable households’ descent into poverty. In the above study, 28 percent of the households were able to escape poverty over a 12-year period. This gross rate of poverty reduction (28 percent) is significantly higher than the 8 percent net reduction in the poverty rate observed in the sample villages and the roughly similar rate of overall poverty reduction in the country during the same period.

The study provides important clues on how to prevent such declines. First, income growth obviously matters. The study found that the ‘always-poor’ group had an annual per capita income growth of only 0.4 percent, compared to 10.4 percent for the group that escaped poverty. In explaining these stark differences, Sen makes a distinction between ‘capability’ and ‘opportunity’. The former is assessed in terms of initial levels of asset (land) ownership. The study found that in the low-wealth group (i.e., those owning up to 0.2 hectare of land), 53 percent of the non-poor households subsequently became poor, while only 39 percent of the poor households escaped poverty. In contrast, for the high-wealth group (owning 1.01 hectare of land or more), only 32 percent of the originally non-poor households slipped into poverty while 63 percent of the poor households went above the poverty line.

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