Poverty in Bangladesh stages a comeback

After remaining a role model for poverty reduction for over three decades, Bangladesh of late is beginning to show signs of sliding down on the scale of metrics used domestically and internationally. According to the latest survey by Bangladesh Institute of Development Studies (BIDS), poverty in the country worsened from 2022 to 2024. The survey reveals that nearly 23.11 per cent of households in the sample districts now live below the upper poverty line. The rate stands at 24.67 per cent in rural areas, while it is 20.43 per cent in urban areas. The findings of the survey, styled ‘Small Area Estimate (SAE) of Poverty 2022: Trends and Disparities in Selected Districts, 2024’ were made public recently. The survey data were collected from October 8, 2024 to November 7, 2024. Bangladesh Bureau of Statistics (BBS), in collaboration with the  World Bank and the World  Food Programme, developed a poverty map  at the district and upazila levels, using data from the 2022 Population Census and  the 2022  Household  Income and Expenditure Survey (HIES). In the context of Bangladesh, SAE refers to Small Area Estimation techniques used to estimate poverty, food insecurity, and other indicators at the district or upazila levels, by combining data from household surveys with census data and other auxiliary information.

The survey used purposive sampling, selecting districts based on climate change vulnerability in coastal areas, river erosions in riverine districts, hilly and haor areas, alongside Dhaka district.

According to the survey findings, rural areas reported higher dissatisfaction (72.96 per cent) about living conditions than urban areas (64.49 per cent). The least satisfied districts are Bandarban  (7.84  per cent) and Sylhet (18.50 per cent).The survey reveals that 46.03 per cent of the  households  in the sample  areas experienced   food insecurity in 2024 compared with 30.08 per cent in 2022. Also, 5.36 per cent of the households experienced severe food insecurity in 2024 as against 4.29 per cent in 2022.

Disparity between statistical estimates and local perceptions on poverty suggests deteriorating economic conditions across the sample areas.  The perception survey for 2024 (presumably part of the overall survey) also shows increasing poverty concerns. For instance, poverty perception by the poor in the sample areas worsened from 2022 to 2024, the survey found. In the district of Bandarban, poverty perception deteriorated between these years, reflecting economic distress. The survey found the perception of poverty in Dhaka has worsened significantly between the years 2022 and 2024, as poverty in the district raised from 8.6 per cent in 2022 to 19.3 per cent in 2024. The perception survey of 2024 shows increasing poverty concerns in Keranigonj and Savar upazilas. In Khulna, poverty severity had intensified, particularly in Dakope and Koyra upazilas. Phultala and Terokhada, once categorised as low- poverty zones, now face augmented  poverty. Rangpur has also seen rising poverty, with Gangachara identified as the most affected  upazila. Other upazilas such as Pirgacha, Rangpur sadar, and Mithapukur are witnessing worsening socio-economic   conditions.  In Sylhet, the 2024 perception survey shows, Zakiganj falling into very high poverty category while all other upazilas in the district   have shifted to moderate poverty  zone.

The impact of climate change and riverbank erosion has exacerbated poverty in sample districts in coastal and riverine areas. The survey, however, does not go into in-depth explanation  about specific factors at work in the sample districts. For this shortcoming, increasing level of poverty in upazilas like Savar and Keraniganj, in the outskirts of the country’s economic hub, Dhaka city, cannot but raise eyebrows.

The news about the deterioration in poverty situation marked by increase in percentage of households below the upper poverty line was published in a national daily recently (The Financial Express, March 25, 2025). After exactly one month another national daily published a World Bank report revealing imminent increase in the percentage of households below the lower poverty line (Prothom Alo, April 25, 2025). While the BIDS survey is an update on the state of households  below the upper poverty line who are characterised as ‘poor’ as per existing practice, the World Bank forecast refers to ‘extreme poor’, classifying households below the lower poverty line. Both the developments on the poverty front are disconcerting as they are admissions of failure to not only keeping up the momentum of poverty reduction that the country earned plaudits for during the past three decades but also for regressions in this area.

According to the ‘Bangladesh Development Update’ published by the World Bank (on April 23, 2025),  the percentage of ‘extreme poor’ households, referring  to the percentage of households below the lower poverty line, will increase by another three million, raising the percentage to 9.3  in 2025 compared to 7.7 per cent in 2024. The World Bank Development Update, however, anticipates positive developments in the poverty situation during the next two years. According to the forecast made, extreme poverty (households below lower poverty line) may decline to.7.1 per cent in 2026 and that in 2027 may register a further decline, resting at 5.8 per cent. But the Development Update anticipates not only increase in the percentage of ‘extreme poor’ (below lower poverty line) now but also ‘absolute poor’ (below upper poverty line) during 2025. According to World Bank, the percentage of absolute poor in 2024 was 20.50 per cent while it may increase to 22.90 per cent this year.

As regards the reasons for the regression in poverty situation, the World Bank has identified three factors: (a) fragile state of the employment market, meaning lower prospects for gainful employment; (b) decrease in real income of people in lower income brackets owing to persistent inflation; and (c) stagnation  in economic activities.

In both the BIDS survey findings and the World Bank Development Update, references to deterioration in poverty situation have been made using the concepts of ‘upper poverty line’ and ‘lower poverty line’.  It will be pertinent to explain these two tools to clarify their implications. The BBS in its HIES has measured the cost of basic needs to estimate poverty since 1995-1996. In this method, two poverty lines are used viz. lower and upper poverty lines. These lines are measured in three stages. In the first stage, food poverty line is determined by calculating the cost of a fixed bundle of foodstuffs (11 items including rice, wheat, edible oil, pulses, milk, meat, fish etc) which provide the minimum nutritional requirements for a diet corresponding to 2222 kilo calorie per day per person. At the second stage, two different income lines capable of meeting the minimum demand for consumption are computed. The first one is lower non-food allowance and the second is upper non-food allowance. The median amount spent on non-food items by households whose total consumption is approximately equal to their food poverty line is known as lower non-food allowance. On the other hand, the amount spent on non-food items by households   whose food consumption is approximately equal to their food poverty line is known as upper non-food allowance. At the final stage, lower poverty line is estimated by adding food poverty line with lower non-food allowance while upper poverty line is estimated by adding food poverty line to upper non-food allowance. The position of households whose total consumption expenditure is equal to, or, below food poverty line is considered equal to, or below lower poverty line. Similarly, the position of the households whose food consumption equals food poverty line and total expenditures equals to, or is below upper non-food allowance, is considered equal to, or below upper poverty line. Therefore, in terms of consumption, all the households falling below the upper poverty line are considered poor or absolute poor, while households falling below the lower poverty line are considered extreme poor.

The HIES  survey findings by BBS, first  started in 1974-75, have shown slow but steady decline in both the incidences of absolute  and extreme poverty. The only exception was during Covid pandemic in 2020-21. Because of the stellar performance of Bangladesh economy in reducing poverty of both types, the country became a role model and the World Bank observed World Poverty Reduction Day in Dhaka in 2016. In view of this track record, the sudden deterioration in poverty under both upper and lower poverty lines is a cause for concern. This also calls for an in-depth analysis of not only the immediate causes (continuing after-effects of  Covid pandemic, inflation, gap between wages and cost of living , sluggish employment market, stagnation in private investment following recent  political  upheaval, slowed down public investment due to resource  constraint  etc) but also the very strategy used for poverty reduction. It seems that in a large majority of cases, households helped to cross the poverty line have been on a knife edge, struggling to maintain status quo without any coping capacity to overcome temporary setbacks like disease, natural disaster or fluctuation in labour markets. The absence of integration of social safety net programmes for the poor and vulnerable with the poverty focussed programmes by the government and NGOs has undermined the sustainability of poverty reduction in the country. The recent findings on poverty situation in the country showing the worsening of living condition of households below higher and lower poverty lines call for a rethink of the policies and programmes for poverty alleviation and removal. The wind of discontent brewing up silently among the poor (as revealed in the perception  survey)   may gain cyclonic force, leading to pulverisation  of  the body politic, if left unattended. The economic weather vane has shown which way the wind is blowing. The policy makers will not have any excuse to say that early warning was not sounded.

hasnat.hye5@gmail.com