Bangladesh has made substantial progress in reducing poverty, supported by sustained economic growth. Based on the international poverty line of $1.90 per person per day, Bangladesh reduced poverty from 44.2 percent in 1991 to 18.5 percent in 2010, and is projected to decrease to 12.9 percent in 2016.
The country achieved the MDG 1 on halving poverty five years ahead of time, with 20.5 million people rising out of poverty during the 1991-2010 period. In parallel, life expectancy, literacy rates and per capita food production have increased significantly. Progress was underpinned by strong economic growth, with 6 percent plus growth over the decade and reaching to 7.1 percent growth in 2015/2016. Rapid growth enabled Bangladesh to reach the lower middle-income country status in 2014.
However, sustained growth has rapidly increased the demand for energy, transport and urbanization. Insufficient planning and investment have resulted in increasingly severe infrastructure bottlenecks. To sustain growth, Bangladesh needs urgently to implement structural reforms, expand investments in human capital, increase female labor force participation, and raise productivity through increased global value chain integration. Reducing infrastructure gaps and improving the business climate would allow new productive sectors to develop and generate jobs.
Bangladesh is both an inspiration and a challenge for policymakers and practitioners of development. While the poverty reduction efforts to date have been extraordinary, Bangladesh faces daunting challenges with about 28 million people still living below the poverty line. The country is at an important juncture, when with the right policies and timely action, it can move up within the middle-income bracket.
The World Bank has identified job creation as the country’s top development priority. Bangladesh needs to create more and better jobs for the 2.1 million youths entering the job market every year. But to do so, Bangladesh will need to remove the barriers to higher growth posed by low access to reliable and affordable power, poor transportation infrastructure, limited availability of serviced land, rapid urbanization and vulnerability to climate change and natural disasters, among others.