The Star Tutor: Implications of rural Poverty on Rural Economy and National Economy

Poverty is the main problem in our economy. The high population growth and low level of economic activities may be identified as important causative factors for high incidence of rural poverty. On the other hand, the urban-based industrialization has done little to mitigate the problem of unemployment. Thus the various economic factors have primarily operated to create high incidence of poverty.

Bangladesh

has achieved quite improvements in social and economic indicators. The annual growth rate of GDP during 1991-1997 was 3.2 per cent. And GDP further expanded at the rate of 5.5 per cent during 1996-1999 despite huge damages brought by recurring floods in 1998/99. Real gross GDP has increased by 64 percent during 1991-2000 as major sectors like agriculture; service and industry have shown significant growth by 41 percent, 58 percent and 103 percent respectively. It should be noted that per capita income growth rate of 3.7 percent per annum during 19996-99 is respectable performance especially with high population growth at 1.8 percent per year.

The incidence of poverty has decreased from 58.8 percent in 1991-92 to 49.8 percent in 2000. However, despite its 9 percent decrease, actual numbers of poor remain the same at 63 millions due to a high population growth. The incidence of extreme poverty has also decreased from 42.7 percent to 33.7 percent in 2000 and the number has also decreased from 45.2 million to 42.5 million. The poverty rate is higher at rural areas at 53 percent than at urban areas at 36.6 percent in 2000.

There have been remarkable improvements in human poverty indexes. Progress in reducing some aspects of deprivation was faster than in case of others. According to the UNDP report, total fertility rate has dropped from 6.3 in 1975 to 4.3 in 1991, and further gone down to 3.3 in 1997-1999. Accordingly, population growth rate has gone down from 2.9 percent per annum in the mid-1970s to 1.6 percent in the late 1990s. Infant mortality rate has declined from 104.6 per 1,000 live births in 1985-89 to 92.8 in 1990-94 and further to 66.3 in 1995-99. Maternal mortality rate is believed to have declined from 6 per 1,000 live births to 4.4-4.8. Declining mortality rates have led to an increase in average longevity of the population and life expectancy at birth improved from 55/56 years in the 1980s to 60 years in 1999-2000. The overall adult literacy rate increased from about 26 percent in the mid-70s to 29 percent and to 60 percent by 1999. The gross enrollment in primary schools has increased from 59 percent in 1982 to 96 percent in 1999. The gender gap in gross enrollment at the primary has significantly narrowed down in the order of 6 percent in 1999.

Alleviation of rural poverty through higher production and employment generation was the major objective of almost all the rural development activities. But the integrated rural development programmes so far undertaken have put emphasis on development of physical infrastructures, area development, irrigated agriculture etc. for economic growth which benefited the rich and large farmers more than the others. It was observed that about two-thirds of the total investment was allocated for those projects. In the recent years, rural development programmes have been undertaken with focuss on employment generations and increased production for poor households but only 3-6 percent of employment and production programmes have been allocated for landless poor [ (1984)]. However, the outcomes of these programmes fell far short of the expectations and their coverages are very small compared to the needs. Food for work programmes (FWP) also relieve some acute needs of the poor but they have no potential either for generating wealth for future investment or for alleviating poverty on a permanent basis.

Table: Annual Growth Rate in Bangladesh