Pledging to end poverty in all its forms

Dhaka,  Wed,  26 October 2016
Published : 16 Oct 2016, 20:13:06
Poverty Eradication Day 2016

Pledging to end poverty in all its forms

Though Bangladesh has reduced extreme poverty from 34 per cent in 2000 to 13 per cent today - which is a laudable achievement, 20 million people still groan under extreme poverty - living on less than Tk 45 per day, writes Abdul Bayes

October 17 is the International Day for the Eradication of Poverty. The theme of the day this year is: "Moving from humiliation and exclusion to participation: Ending poverty in all its forms". The Sustainable Development Goal (SDG) also pledges to "end poverty in all its forms everywhere". This means that poverty is not only a matter of calorie intake or income earned; poverty has multi-dimensional perspectives.

The International Day for the Eradication of Poverty has a history. It traces back to October 17, 1987 when over a hundred thousand people gathered at the Trocadero in Paris, where the Universal Declaration of Human Rights was signed in 1948. The purpose of that gathering was to honour victims of extreme poverty, violence and hunger, and to proclaim that poverty is a violation of human rights. Thereafter, through the resolution 47/196 adopted on December 22, 1992, the UN General Assembly declared October 17 as the International Day for the Eradication of Poverty. It invited all states to take the matter seriously and called for inter-governmental and non-governmental organisations (NGOs) to assist the state with the slogan:  "Building a sustainable future: let us unite to end poverty and discrimination".

Perhaps it is needless to mention that Bangladesh has done pretty well in reducing income poverty. The Seventh Five Year Plan (2016-2020) - a document that reflects national hopes and aspirations at least for five years - in its preamble put poverty reduction as one of the perennial goals. Ipso facto, the plan aims to bring down overall incidence of poverty from about 25 per cent of 2015 to about 19 per cent in 2020, and extreme poverty from about 13 per cent to about 9.0 per cent during the same period of time. It needs to be mentioned here that despite reducing extreme poverty from 34 per cent in 2000 to 13 per cent today - which is a laudable achievement, 20 million people still groan under extreme poverty - living on less than Tk 45 per day.

 The role of the government in reducing poverty can hardly be overemphasised. Despite debates, NGOs have also contributed with their microfinance programmes. But soon it was realised that the microcredit pogrammes tend to bypass a huge chunk of the ultra-poor, and from then on, targeting ultra-poor has become a tool to reduce extreme poverty. Side by side with government's efforts at reaching the hardcore poor, a number of programmes/projects undertaken by different NGOs  are also at work to address especially extreme poor who are  assetless, illiterate, and mostly day-labourer consuming only 1800 calories or less. The ultra-poor is a sub-set of the poor with less than 10 decimals of land, mostly women-headed households with almost no male working member. 

In Bangladesh, there are a few targeted livelihood programmes such as Economic Empowerment of the Poorest (EEP)/Shiree, Char Livelihood Programmes and Targeted Ultra-Poor Programme (TUP). By and large, there are Unconditional Cash transfer Programmes, Livelihood Programmes and Ultra-Poor Graduation Programme - mostly led by  BRAC. Available empirical evidence shows that the existing programmes in Bangladesh helped effective reduction of extreme poverty. A well-defined marker of many of them has been to transfer assets (cow, goat) to them so that, after some time, they can earn their own bread. Besides the transfer of assets, the recipients receive training in asset management, savings and book keeping, etc. that is 'non-tradable' and cannot be developed overnight.

The Copenhagen Consensus, in its concern over Bangladesh Development Priorities, carried out a cost-benefit analysis of different interventions for the poor. Done by the experts in this field, the studies argue that (a) a cash transfer of Tk.18,096 to a household generates Tk.80 out of a spending of Tk.100; (b) a livelihood intervention of Tk.7,800 to a household brings a benefit of Tk.100 out of a spending of Tk.100, and (c) the graduation programme of Tk.23,400 per household,  provides a benefit of Tk.200 out of a spending of Tk,1000. In other words, the benefit-cost ratios of the interventions are 0. 8, 1 and 2 respectively for (a), (b) and (c).

Why the graduation programme ranks the highest in terms of benefits generated for a given amount of cost? First, take the case of BRAC's TUP programme. It starts with the premise that: (a) the very poor needs a shield against day-to-day hunger otherwise they might sell out the asset so received; (b) they must be trained about how to manage the asset and generate savings otherwise they would spoil the asset and (c) the recipient of assets must be supervised and monitored, lest the poor take a free ride and misuse the asset. Thus the 'package' comprises a consumption allowance to ensure food security in weeks without earning, a business/skill training and a transfer of asset. 

The TUP model now operates in several countries in the world. A group of researchers, led by Professor Abhijit Benarjee of the Michigan Institute of Technology (MIT), evaluated the programme using a Randomised Control Trial (RCT) and observed that the model has helped extreme poverty reduction in a sustainable manner in those countries. In Bangladesh, a number of studies observed that the model works well for the ultra-poor although experiments with alternative tools are at work. To be specific on this point, about 90 per cent of the TUP members were found to be above the extreme poverty line even after fiveyears when BRAC put its hands off from the assistance. The benefits came mostly from shifting occupation from day-labourer or maids to self-employment. The surveys also show that many of the women so far unheard or unsung were invited to join social programmes in the village - be it marriage ceremony or other occasions.

Bangladesh Government, in its efforts at eradicating extreme poverty has to seriously examine the cross-cuts among the existing interventions. Most importantly, cost-benefit analysis should pave ways and means for poverty reduction in a country with serious resource constraints. Secondly, the government could cooperate with NGOs (or the other way round) in the fulfilment of its objectives of drastically reducing extreme poverty. Knowing well that poverty cannot be contained by governments alone, the UN invited all stakeholders to assist the governments to see a state of "moving from humiliation and exclusion to participation: Ending poverty in all its forms".

The writer is a former Professor of Economics at Jahangirnagar University.
Editor : A.H.M Moazzem Hossain
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