Despite the World Bank report that shows a declining rate of poverty and the rising trend of macroeconomic indicators, poverty is still far from becoming a museum piece. Indeed, things do not seem so rosy. Poverty reduction measures topped the government's priority list over the years. But it is not enough as poverty reduction requires a total macroeconomic approach.
The World Bank shows that the number of poor people was 63 million in 2000 and it came down to 47 million in 2010. They also show that poverty went down by 1.8 per cent each year up to 2005 and by 1.7 per cent each year since then. 16 million people have come out of poverty during this 10-year period.
This means despite population increase, poverty has declined by almost 26 per cent during the last 10 years. This is pleasing news. Indeed, the people's income has gone up to a certain extent over the years. But, discrimination also went up, if the definition of poverty is not taken as a static one. The indicator of poverty in 1990 and in 2013 cannot be the same in view of the size of gross domestic product (GDP).
Successive governments, since independence, have put in tremendous efforts to eradicate poverty and allocated big amounts of money for social safety net. Projects such as food for work (Kabikha), old age allowance, etc. have been undertaken. UN agencies also gave a large amount of money for this purpose. Besides, the Grameen Bank, BRAC and other NGOs (non-governmental organisations) have contributed toward poverty alleviation.
Until very recently, the development sector, especially poverty alleviation, was a pretty good flourishing sector in the country. Eminent intellectual Badruddin Umar has termed it as 'poverty trade' while Nobel laureate Dr. Yunus euphemised it as 'Social Business'.
As the West is in the midst of a financial crisis, the amount of donation to the development sector has come down sharply over the years. Moreover, the ghost of socialism is not haunting the West the way it did 30-40 years back, and the West's interest in a vibrant development sector in poor countries is no longer that intense. Indeed, the development sector mushroomed in the Third World with the patronisation of the West as an antidote to socialism.
My basic argument is that poverty cannot be alleviated by means of poverty reduction measures alone as have been done by our governments over the years. To eradicate poverty, there is no alternative to employment generation and state-level initiatives to ensure basic necessities. Microfinance cannot do that, because, there is no such measures that had ever been taken either by the government or the MFOs (microfinance organisations) to ensure that people utilise the loans for productive purposes. The borrowers of these microfinance providers mostly use this money to repay previous debt, if any. And they take another loan to repay this very loan, thus getting entangled in a vicious cycle of poverty. As GDP registered a pretty steady growth over the years, economic activities widened in the society. People are managing things somehow making their entry into the national economy. Also, there is now greater job opportunities - especially, in the garment sector. People move to and fro and earn some money anyhow. But this is not a secure economy which is mostly informal in nature. Again, if the loanee dies after the sanction of a loan, the scenario turns grave. The nominee is left with no other option other than selling all the belongings. However, some people may have utilised this loan - no doubt about that; but their percentage is pretty meagre. In a nutshell, whatever rise is registered in people's income is mainly due to the expansion of macroeconomy, not micro. So, the government should take a note of this fact.
Indeed, poverty can be alleviated through employment generation. A total solution to the issue involves a macroeconomic approach, that means industrialisation on a large scale. Our RMG (ready-made garment) and textile sectors are producing to the full capacity in response to global demands of cheap clothes. But the forward and backward linkage industry is yet to develop in the country. That is why, we have to import almost all the inputs of the RMG sector. Hence, the production of RMG is contingent upon global political and economic situation; we are always vulnerable in this regard. Had there been a strong backward and forward linkage industry, it would have created more employment while adding some stability to the industry. To put it simply, industries operating in the country should be brought within a formal structure; while full compliance with labour law is a must to protect the rights of workers.
Industrialisation at the rural level is a crying need to combat poverty and migration of the rural people to urban areas. Especially agro-based industries should be set up in the rural areas to create permanent employment for the rural folks. On the one hand, it would enrich our heritage of agriculture and on the other hand, it would enable agriculture to contribute more to the GDP.
To me, one is not poor if he can avail of all the basic necessities of life - education, housing, clothing, food and medicare. In case he saves some after meeting all these needs, he can be said to belong to the middle class. Well, I would not coin all the definitions of the social classes. What I would like to say is that there are not many people in our society who are capable of meeting all the basic needs properly and still can save. Our income has increased, as I said earlier, but the spiraling rate of inflation is eating up almost everything. In other words, people are left helpless by the high rate of inflation. This insecure economy has utterly failed to bring any stability in our lives. However, life goes on.
Despite political instability, rampant corruption and lack of infrastructure, our GDP has registered a steady growth that has caught the attention of the international community. But all of these achievements may go in vain if we cannot strike a balance in income in society. To this effect, tax structure has to be reviewed. Direct tax should contribute 50 per cent to the revenue income of the government and inflation has to be contained within 5.0 per cent as the economists say. State has to ensure the basic necessities of life at an affordable cost. Government monitoring on trade and market mechanism should be tightened. Only then the people can heave a sigh of relief - at least economically. And who does not know that economics constitutes the basic structure of the society?
