Key indicators, key questions and key conclusions

Tanim Ahmed, NewAge, 3 September 2009

It is not that the state of increasing radical disparity and inequity was entirely unknown, or that the proportion of poor people was thought to be far lower than what the ADB indicators show. But these data once again point out that the system is failing the poorest. Together these data show that the path to development and economic prosperity that successive governments have pursued and perpetuated fails to improve the lot of the masses

RECENTLY, the Asian Development Bank published its Key Indicators for Asia and the Pacific of 2009. Like every year and like almost every other such publication laden with statistics that the international financial institutions bring out annually, there are a host of issues that warrant strong reservations as far as the quickest path to wholesome development and economic prosperity is concerned. For instance this year’s key indicators devote special attention to small and medium enterprises titled ‘Enterprises in Asia: Fostering Dynamism in SMEs’.

Whether it was small and medium enterprises or large scale heavy industries that had far stronger role in brining about the rapid industrialisation of powerhouses like Japan, Singapore, Malaysia, Korea and more recently China and India could be discussed in detail to illustrate that this stress on small and medium enterprises should be interpreted as an agenda of specific interest groups. Unduly heavy stress on this sector would eventually mean less attention for large industries which should in fact be prioritised over smaller enterprises. There could be a number of other reservations regarding this publication. But these publications also bring out certain facts in the open.

It is not that these facts were entirely unknown, or that no one had any clue regarding the state of a certain indicator. But since there are no periodic surveys or estimates of crucial indicators like unemployment and labour, poverty and state of nutrition, people must resort to using data that are often several years old. And when trying to conduct analysis they can at best posit an educated guess about the state of the economy without updated data on certain key indicators of the economy, which makes it almost impossible to assess the situation on the ground and consequently the government’s performance.

The latest publication of the Asian Development Bank is helpful in that aspect. And those statistics do not speak well of the state of governance in Bangladesh. The one that is of crucial interest, which was naturally among the main highlights of newspaper reports, is poverty. According to this publication, about half the people of Bangladesh live in poverty currently. It used to be 66.8 in 1992. The reason that this data does not conform to the ones that have been published before is because the benchmark for poverty has been reviewed and increased to one dollar and a quarter instead of the previous ‘dollar a day’ mark. And again, this ‘dollar’ is not the one exchanged at around Tk 70 on the market. They are called purchasing power parity dollars, which is more indicative of buying power than the monetary value of the currency.

So according to the reviewed benchmark, half the population of Bangladesh live on less than $1.25 (PPP) per day and are therefore poor. That, however, means little in real terms and provides no idea about the nature of poverty except that this only confirms what has been projected by other research organisations including the Centre for Policy Dialogue and Unnayan Shamunnay. But this publication has the good sense to also calculate how much $1 PPP was in terms of the local currency. According to those figures, the reviewed poverty threshold means that an individual living on less than about Tk 35 per day would be considered poor. Whether that is an acceptable benchmark for poverty, and there is no reason to accept this benchmark as one that encapsulates all the different aspects of poverty, is another matter. What the numbers do indicate is that even according to simplistic and watered-down benchmarks, half the people in this country are poor.

This also confirms a point that had been earlier made by different agencies during the reign of the interim government. It is that the country’s gains in terms income poverty reduction since 2000 came all undone during the two years of emergency when food prices increased phenomenally pushing up food inflation well beyond the double-digit mark while unemployment peaked. The proportion of people in poverty had improved to 40 per cent in 2005.

But there is an even more damning statistic relating to the deprivation of the poor. According to the Asian Development Bank, Bangladesh had 79.5 per cent of its population living on less than Tk 51 ($2 PPP per day is considered an upper poverty line of sorts by the international agencies and organisations) per day in 1995. This proportion of population increased to 80.3 in 2005. This implies a steady worsening of disparity. According to another statistic, the poorest 20 per cent of the population accounted for a little over 9 per cent of the total consumption. When compared against the fact that the average GDP per capita in PPP terms is $1501, and percentage of population living on less the $2 PPP is 80 per cent, the radical disparity becomes somewhat clearer. The high average is, therefore, due to the radically higher income of the remaining 20 per cent.

It is not that the state of increasing radical disparity and inequity was entirely unknown, or that the proportion of poor people was thought to be far lower than what the ADB indicators show. But these data once again point out that the system is failing the poorest. Together these data show that the path to development and economic prosperity that successive governments have pursued and perpetuated fails to improve the lot of the masses. There is no reason to accept the recommendations that the Asian Development Bank, or for that matter other international financial organisations, lenders and so-called development partners give out, should be followed. But it would undeniable that these data, once again, make a very strong case for an overhaul of the system.

It becomes quite clear from the few indicators discussed here that successive governments have done little to genuinely improve the lot of the poorer sections. The trend of rising disparity shows that the current system fails to benefit the poor or contribute to their welfare. People who were poor ten years have by and large become poorer. Those marginally over the poverty line remain precariously perched on it with perhaps a higher vulnerability of falling below. A single bout of sickness thwarts a poor family’s possibility of graduating to the next rung for years if not an entire generation. The poorest sections still cannot afford to seek education because they are poor, but the education is not being revamped in such manner that access to it should matter on the level of poverty of the students. Lack of provision for the basic needs, together breed more poverty. It would perhaps only suffice if realignment of the country’s development path were in an equally radical direction as the existing disparity. Unfortunately, despite the rhetoric of successive governments, that seems very unlikely.

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