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8/4/2019 PRC's Poverty Reduction Success: Implications for Bangladesh (Presentation)
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The Implications of the Inclusive Growth and
Development Aid Agenda of the Peoples Republic
of China for Poorer Countries in Asia:The Case of Bangladesh
Paper Presented at the Regional Workshop onSOCIAL INCLUSIVENESSIN ASIAS EMERGING MIDDLE INCOME COUNTRIES
Mustafa K. Mujeri
Zulfiqar AliSiban Shahana
13 September 2011
Jakarta
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Focus of the paper
1. SOCIO-ECONOMIC SIMILARITIES AND DIFFERENCES IN PRC ANDBANGLADESH
2. POVERTY REDUCTION IN PRC AND BANGLADESH:UNDERSTANDING DIFFERENTIAL PERFORMANCE
3. PRCS ECONOMIC COOPERATION AND DEVELOPMENT ASSISTANCETO BANGLADESH: IMPLICATIONS FOR POVERTY REDUCTION INBANGLADESH
4. LESSONS FOR BANGLADESG FROM PRCS POVERTY REDUCTIONSUCCESS
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Socio-economic Differences
Indicators Bangladesh PRC
1980 2000 1980 2000
Annual population growth (%) 2.68 1.82 1.25 0.79
Population density (per sq. km.) 694 1081 105 135
Urban population (%) 15 24 20 36
Annual GDP growth rate (%) 4.8 5.9 7.8 8.4
GDP per capita, constant 2000 $ 226 335 186 949
Agri. value added, % of GDP 32 26 30 15
Gross investment, % of GDP 14 23 35 35Life expectancy at birth, years 48 61 66 71
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Socio-economic Similarities
Despite the above differences, both Bangladesh and PRC facerather similar economic problems in certain respects, such as:
Sustainability of growth and
Emerging inequalities
Economic growth in both countries have been associated with:
- sharp increases in spatial and vertical inequalities
- greater fragility in incomes among the poor and the
marginalized groups
- adverse shifts in several climate change indicators
However, while the policy response in PRC has been to reduce
inequality through changes in tax rates, greater public investment
in western and interior regions and improving social security
benefits, inequality-reducing policies in Bangladesh are yet to
receive high priority within the policy agenda.
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Poverty Reduction in PRC and Bangladesh:
Understanding Differential Performances
The incidence of poverty has also declined inBangladesh over the past several years;
As the estimates indicate, income poverty has
declined from 56.6 percent in 1991-92 to 31.5
percent in 2010;
However, compared with the poverty reduction
achievement of PRC, Bangladeshs performance is
less spectacular.
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Social and Environmental Poverty in PRC and Bangladesh
The progress in human and social development in PRC has also been
remarkable since 1978; The level of peoples education and health condition has significantly
improved since reform, which has contributed to better human capitalaccumulation in PRC;
Average years of schooling (above 15 years of age) increased to 7 years in2000 from 4.6 years in 1982.;
The share of illiterate population also declined substantially from 22.8percent in 1982 to 6.7 percent in 2002 reflecting a decrease from 231million to 85 million;
Infant mortality decreased from 37.6 percent in 1982 to 28.4 percent in2000;
The average life expectancy increased to 71.4 years in 2000 from 67.8
years in 1981; All relevant indicators demonstrate rapid progress in human and social
development, and the complementary relationship between economicand social progress in PRC.
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Social and Environmental Poverty in PRC and Bangladesh
Bangladeshs performance in reducing social poverty has
been mixed;
Child nutritional status reveals that a high proportion ofchildren in the country currently suffers from malnutrition;
However, Improvement has taken place in the case of
mortality indicators: under-five mortality per thousand livebirths declined from 151 in 1990 to 73 in 2010; Infantmortality rate per thousand live births also declined from 94to 41 during the same period;
Access to safe drinking water is satisfactory at its current state
(97.8 percent);
Access to sanitary toilet is, however, still poor with only 54percent of the total population enjoying such facilities.
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Institutional Set up for Poverty Reduction in PRC and Bangladesh
There were three distinct phases of poverty reduction approaches in PRC:
Improving farmers access to assets (prior to 1978): poverty reduction inthis phase was mainly realized by:
- Increasing farmers access to land, physical assets, financialservice, technological extension services, and establishing acommunity-based social security system
Achievement of overall economic growth and improvement in the termsof trade of agriculture (between 1978 and 1984): This phase included:
- Continuous high economic growth, transfers of rural labor force tonon-agricultural enterprises, speeding up urbanization,
implementing export oriented open-up policies, and improvement of
human capital
Targeted programs combined with a trickle-down development strategy(after 1985): In this phase, regionally targeted programs; macroeconomicadjustment to permit and promote the participation of the poor; andtargeted poverty reduction plan were implemented to lift the remaining
rural poor out of poverty.
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Institutional Set up for Poverty Reduction in PRC and Bangladesh
Bangladesh, on the other hand, has a long history of implementation of
anti-poverty programs. The Rural Public Works Program (RPWP) has beenan important policy instrument for the government since the early 1960sto augment employment and income of the rural poor especially duringthe lean agricultural seasons.
The government is currently implementing as many as 87 differentprograms (including social safety nets) through different
ministries/departments in order to support the disadvantaged peopleincluding women, children, elderly, and the disabled.
These programs include: cash transfer programs; food security programs;micro credit for self-employment; and funds for poverty alleviation.
In order to support these programs, an allocation of nearly Tk. 226 billion
was made in the financial year 2011-12, accounting for about 14 percentof the national budget and 2.5 percent of the countrys GDP.
Some of the important cash transfer programs include: 100-dayemployment generation scheme, old age allowance, widow allowance,disability allowance, and others Major food assistance programs include:Food for Work, VGD, Vulnerable Group Feeding (VGF), and others.
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Institutional Set up for Poverty Reduction in PRC and Bangladesh
Various studies point out that the existing social safety net
programs (SSNs) in Bangladesh provide limited coverage whichcannot cope with the magnitude of extreme poverty andmarginality that exists in the country.
The SSNs cover about 15 million people, and consequently falldrastically short in coverage for about 24 million people who belongto the extremely poor category.
Furthermore, the SSNs cover mostly the rural poor, whereas thenumber of urban extreme poor is also large and the nature of urbanpoverty is more severe than rural poverty in certain respects.
Also, there is no integrated national policy for social protection andsafety net programs in Bangladesh.
Therefore, the extent, nature and mechanisms of most of the safetynet programs undergo changes in an ad hoc manner especially withthe change of the government.
There is also a lack of integration and coordination among varioussafety net programs and the providers.
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PRCS Economic Cooperation and Development
Assistance to Bangladesh Chinese assistance to Bangladesh resulted in setting up of power
plants, fertilizer factories, six friendship bridges, construction ofmodern convention center, modernization of marine fisheries, etc.
Provided US$ 6 million for capacity building of Bangladeshi civilservants
Providing training on criminal investigation techniques and forensic
tests Agreed on providing support for peaceful use of nuclear energy in
the fields of medicine, agriculture, and biotechnology
Preferential access to 84 items into China
Cooperation in solving water problems and in management ofdifferent rivers
Technological assistance to Disaster and Flood Warning Center
Defense cooperation as well
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PRCS Economic Cooperation and Development
Assistance to Bangladesh
Bangladesh is the third largest trade partner of PRC in South Asia(Bilateral trade US$$ 3.19 billion in 2006)
During 2010 summit, the framework ofCloser Comprehensive
Partnership of Cooperation (2010) was signed which includes:
- Agreement on Economic and Technical Cooperation- Framework Agreement on Providing Preferential Loan
- Protocol on Remitting the Bangladesh Interest-free Loan due
in 2008
- Exchange of Letters on the construction of the seventh
Bangladesh-China Friendship Bridge
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Trends in PRCs Assistance to Bangladesh
0
5
10
15
20
25
30
35
Trends in Total Disbursement(m US$)
Year Total
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Lessons from PRCS Poverty Reduction Success:
Implications for Bangladesh
PRCs poverty reduction has been a process of constant learning
and experimentation
PRCs Key Factors of Success
Stable political environment and rapid economic growth
Growth of agricultural GDP Development of non-state economic sector
Strong Government commitment throughout the implementation of the Plans
Supportive administrative system at all levels
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Lessons from PRCS Poverty Reduction Success:
Implications for Bangladesh
Economic growth is critical Targeting and participation of the poor matter
Success needs supplementing area-based poverty reductionefforts with a household-oriented approach
Basic insurance acts as complement to poverty reduction effort
Setting clear objectives is important Human development deserves special emphasis
Adequate allocation of resources for the local governments iscritical
Effective coordinated approach is the key
Rural-urban segmentation obstructs poverty reduction Realizing the potential of migration needs more explicit
recognition
Adapting to climate change is important for the poor
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