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PRESS RELEASE

Infrastructure and education key for closing East-West divide

December 23, 2008



DHAKA, November 23, 2008: Bangladesh has progressed significantly in reducing poverty over the past decade despite a series of external shocks. The country compares well with South Asian countries in poverty reduction in recent years but lags behind East Asia. If current growth rates are maintained, along with stable inequality and continued reduction in fertility, Bangladesh will achieve the Millennium Development Goal (MDG) of halving the proportion of people living in poverty by 2015.

 The western part of the country lags behind the eastern part in poverty reduction, said the report ‘Poverty Assessment- Creating Opportunities and Bridging the East-West Divide’. The rivers, namely Jamuna and Padma create natural boundaries that limit integration between economically unequal geographical regions. The poverty rate was 32% in Dhaka division and 34% in Chittagong and Sylhet, and more than 45% in the Western divisions ofKhulna, Barisal and Rajshahi in 2005. The rapid growth of international remittances helped to reduce poverty but reinforced the regional inequality pattern. For example, 24% of households in Chittagong division and 16% in Sylhet received remittances, compared to less than 5% in Rajshahi, Khulna, and Barisal divisions.

 ‘Poverty reduction is not just about improving household income but also about enhancing human capability. It is encouraging to see that Bangladesh is on track to attain most of the Millennium Development Goals.’ said Xian Zhu, Country Director, World Bank, Bangladesh. ‘Still malnutrition remains unacceptably high, which may have been worsened by the recent food price shock. To protect the vulnerable, the existing safety net programs needs to be more coordinated, like the recent reform in the Philippines to set up a central coordinating body.

 The Poverty Assessment Study finds that the existing safety net programs are inadequate even after the progressive expansion in the safety net budget. Less than a quarter of the poorest 10 percent of the population are recipients of at least one safety net program. Moreover resources can be targeted better. For example, in spite of its low poverty rate, Sylhet has the highest safety net coverage among its population.  

 Due to a sharp increase in the number of people entering the job market, around 2.2 million new jobs will need to be created per year over the next decade - this is twice the rate of job creation between 2000-05. This is both a challenge for Bangladesh, but also an opportunity since the new income earners can contribute significantly to overall poverty reduction. The report shows that productivity growth in agriculture and job creation in manufacturing will be vital for accelerating poverty reduction, as will be sustaining the growth in remittances from overseas employment. Women’s participation in the workforce is currently low, but measures to increase this will pay large dividends in terms of poverty reduction.

 “Infrastructure improvements, particularly the Padma Bridge, availability of power and gas and better connectivity to markets are necessary to spread growth to lagging regions. Furthermore, improvements in education and health will allow the poor to access opportunities in urban growth centers and abroad” said Ambar Narayan and Hassan Zaman, lead authors of the report.

The report shows that public spending per capita in both education and health is among the lowest in South Asia. Raising them can provide the resources to improve the quality of service delivery and reduce the rich-poor gaps in access.

Media Contacts
In Dhaka
Mehrin A. Mahbub
Tel : (880-2) 8159001
mmahbub@worldbank.org
In Washington, DC
Erik Nora
Tel : (202) 458 4735
enora@worldbank.org



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