A study of World Bank estimates urban-rural breakdown of poverty for the developing world, drawing on over 200 household surveys in about 90 countries, and using the WB's Poverty Assessments for guidance on urban-rural cost-of-living differences. Their findings are that (i) poverty is becoming more urban. The urban share of the total population over the 1993-2002 period rose to about one-half of a percentage point per year;(ii) the ratio of urban poverty to total poverty incidence has risen with urbanisation during 1993-2002 period (iii) the poor have been urbanised faster than the population as a whole, reflecting a lower-than-average pace of urban poverty reduction and (iv) during 1993-2002 period, while 50 million people were added to the count of $1-a-day poor in urban areas, the aggregate count of the poor was by about 100 million owing to a decline of 150 million in the number of the rural poor.
There is a piece of good news that the developing world has made significant progress in reducing rural poverty. Between 1990 and 2008, the number of the rural poor dipped by 582 million and the headcount ratio from 52 per cent to 29 per cent. The number of the urban poor remained largely unchanged, declining by just 27 million; the rate of decline in headcount ratio-close to 9.0 per cent over this period-however, is not insignificant given that urban population in Asia doubled during this period. Asian countries were able to absorb much of the increase in urban population without letting them slip into poverty.
South Asia may be entering into 'urbanisation-of- poverty' trap, and that the growth story of South Asia has not trickled down to its cities and towns. Thus, how South Asia addresses this challenge would determine the pace of poverty reduction, both in Asia and globally.
Bangladesh has achieved the Millennium Development Goal (MDG) target of halving the incidence of poverty between 1990 and 2015. The 2015 estimated headcount poverty is below the MDG target of 28.5 per cent for 2015. The latest statistics revealed now only about 12 per cent of population is below the poverty line.
The Gini coefficient is a conventional measure for assessing inequalities. The publication Inequality in Asia (ADB 2007) indicates that inequalities have risen in a number of Asian countries. It suggested that poverty reduction would have been higher if inequalities had been less pronounced.
The Bangladesh Bureau of Statistics (BBS) uses the 'Cost of Basic Needs' method as the standard for estimating the incidence of poverty. In this method, two poverty lines are estimated: lower and upper. The Lower Poverty Line is commensurate with 1,805 calories per person per day and as the estimated poverty line, it determines the extent of extreme poverty. The Upper Poverty Line commensurate with 2,122 calories per person per day is estimated by adding together food and non-food poverty lines; it also determines the extent of moderate poverty.
The 7th Five Year Plan has put emphasis on strong growth in total employment, growing faster
than labour force growth, along with increases in labour productivity economy-wide and especially in agriculture and supported rapid growth in real wages in agriculture throughout the country. According to the Plan document, agricultural workers tend to be among the poorest and an increase in productivity and real wages is the most sustainable way of securing reduction in extreme poverty.
Economic growth is not the only factor that matters for poverty reduction. There is growing evidence worldwide that while growth has made important impacts on poverty levels, the benefits of growth have not been shared equitably. There is a widely-held belief that the situation of urban dwellers in Bangladesh is generally better than those living in rural areas.
Bangladesh is urbanising rapidly. To a great extent, migration, industrialisation and urbanisation are a single symbiotic process, and the underpinning forces are hard to resist. The UN projection for urban population of Bangladesh for 2030 is 86.5 million. The proportion of urban population would possibly cross the 50 per cent mark by 2040 and the 60 per cent mark by the year 2050 when the total urban population would rise above 100 million. The annual population growth rate of approximately 4.0 per cent in urban areas is more than 2.5 times that in rural areas. The majority of the urban population in Bangladesh is concentrated in a few large cities. Dhaka, with 13 million people, accounts for about 40 per cent of the total urban population (UN-HABITAT).
Unfortunately, there is no widely accepted definition of 'urban' in Bangladesh. Power and Participation Research Centre (PPRC) proposed a definition that involves a particular population density per square kilometre, a set minimum population size, and over 50 per cent of the labour force in non-agricultural occupations. The definition of 'urban' includes metropolitan city and adjacent areas having characteristics of city, municipality and upazila.
Bangladesh's massive urban sector, comprising 525 urban centres, continues to grow. The BBS reports that 21 per cent of the urban population is below the poverty line, a third of whom is extreme poor. Dhaka is one of the fastest growing mega-cities in the world with slum population seemingly outpacing the growth of other urban areas. Still, the country has no comprehensive policy on urbanisation or urban poverty reduction. According to the UN-HABITAT, Asia has 60 per cent of the world's total slum population, and many more live in slum-like conditions in areas that are officially designated as non-slums.
Migration is fuelled by extreme rural poverty, river erosion, landlessness and large urban-rural wage differential. Migrants flock to the cities in Bangladesh for the same universal reasons in search of jobs particularly for employment in services and industry and 'better' life.
Unlike rural poverty, urban poverty is complex and multidimensional, extending beyond the deficiency of income or consumption where its many dimensions are related to vulnerability of the poor on account of their inadequate access to land and housing, physical infrastructure and services, economic and livelihood sources, health and education facilities, social security networks, and voice and empowerment.
The notion of better life of urban poor compared to the rural poor is a misconception. For example, according to a recent publication 'Achieving the MDGs with Equity', the ratio of the under-five mortality rate (U5M) in rural areas to urban areas is 1.5 on an average in the developing countries and also in South Asia. Bangladesh has smallest difference between and rural U5M at 1.25.
Urbanisation is a driver of economic growth and, if managed well, will bring benefits not just to the poor in urban areas, but to the nation more broadly. Conventional wisdom in Bangladesh and many others say that investing in urban slums will attract more rural migrants. The 7th Five Year Plan has an urbanisation strategy to address the challenges of health, shelter, land, infrastructure and employment etc although there is no particular reference to urban poor. Evidence from India, China and Brazil indicates very clearly that efforts to ease inequalities generate larger dividends for poverty reduction than a more conventional focus on economic growth.
Lack of tenure security is a key characteristic of informal urban settlements. Informal settlements are thus deprived of supports and services from the formal public and non-public sectors. The attention to the urban poor is minimal. Some support comes from non-governmental organisations (NGOs) and the United Nations, but these agencies allocate the majority of funding for poverty alleviation in rural areas. A few NGOs like Dushtha Shasthya Kendra (DSK), however, serves the urban poor enjoying global recognition for its effective support to urban poor.
There are ample evidences that people in Bangladesh migrate from rural to urban areas in search of economic opportunities, not in search of basic social services. Indeed, such services are mostly non-existent in slums, and when these are, they are provided mostly through unscrupulous middlemen using exploitative means at an extremely high cost to slum-dwellers. The land of slums is now changing public places to private places. The government officials, law enforcers and local mastans take possession of different lands and allow the urban poor to live with high rents. They usually take possession of government lands, khas lands or own disputed lands to establish slums.
Data from the 2009 Multiple Indicator Cluster Survey (MICS) in Bangladesh make it clear that conditions in slum areas are much worse than those in most rural areas even with regard to service delivery-type indicators such as secondary education attendance rates and skilled attendance at birth.
In fact, when asked about the reasons for migrating, most Bangladeshis cite economic factors. And the areas in which migrants initially choose to settle in slums are those with the lowest levels of services. Denying basic services to slum dwellers, therefore, cannot be justified as a means of halting or reducing rural-urban migration.
The government perceives that granting security and other services would encourage more settlers and induce migration from rural areas. Thus, lack of essential services perpetuates the downward spiral of poverty in slum areas. The growing urban migration to slums in cities will not slow down or stop as surplus agricultural workers and natural disaster-affected rural people will migrate to cities at accelerated rates. It is time to accept this new paradigm and start to invest in human capital development in slums of Bangladesh.
The writer is a Legal Economist.