6.2 crore Bangladeshis vulnerable to sliding back into poverty: WB
Since 2016, the pace of poverty reduction has slowed and economic growth has become less inclusive, says the WB report titled 'Bangladesh Poverty and Equity Assessment 2025.'
Highlights:
- 6.2 crore Bangladeshis vulnerable to falling back into poverty, World Bank warns
- Poverty reduction has slowed since 2016, projections indicate possible rise between 2022 and 2025
- 3.4 crore people lifted out of poverty between 2010 and 2022
- Extreme poverty fell from 12.2% to 5.6%, moderate poverty from 37.1% to 18.7% from 2010 to 2022
Despite years of progress, nearly 6.2 crore Bangladeshis, or roughly one-third of the population, remain at risk of slipping back into poverty if hit by illness, natural disasters or other shocks, a new World Bank report warns.
The report, launched today (25 November), also notes that poverty reduction has slowed since 2016, with projections indicating a possible rise in poverty between 2022 and 2025.
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The country reduced poverty significantly between 2010 and 2022, lifting 3.4 crore people out of poverty while improving living standards and access to essential services like electricity, education and sanitation, says the report, according to a press release.
However, since 2016, the pace of poverty reduction has slowed and economic growth has become less inclusive, notes the report titled "Bangladesh Poverty and Equity Assessment 2025."
It mentions that extreme poverty fell from 12.2% to 5.6% and moderate poverty dropped from 37.1% to 18.7% from 2010 to 2022.
Yet about one-third of the population remains at risk of falling back into poverty, the report says.
After 2016, Bangladesh's economic growth pattern shifted, becoming less inclusive and income inequality rose as income growth benefited wealthier families more, said the World Bank.
Rural areas led poverty reduction with agriculture as a key driver, the lender noted.
A business-as-usual approach will not accelerate poverty reduction.
But the rate of poverty reduction was much slower in urban areas, it said, adding that one in four poor Bangladeshis lived in a city by 2022.
The way forward
The latest poverty assessment identifies four key policy areas to help Bangladesh reduce poverty and narrow inequality: strengthen the foundations for productive jobs; create more and better jobs for the poor and vulnerable; enable markets that work for the poor by investing in modern processing and supportive business regulations; and enhance resilience through stronger fiscal policy and effective and better-targeted social protection programs.
"For years, Bangladesh has been known for its success in poverty reduction. But with a changing global context, severe climate vulnerabilities and a slower rate of job creation, labour income has weakened," said Jean Pesme, World Bank division director for Bangladesh and Bhutan.
"A business-as-usual approach will not accelerate poverty reduction," he added.
"The fastest path to reducing poverty and ensuring the dignity of people is through job creation, particularly for youth, women and vulnerable populations. A pro-poor, climate-resilient and job-centric strategy will be essential to ensure inclusive and sustainable growth."
The World Bank said job creation stagnated in the manufacturing sector and shifted to less productive sectors, hitting women and youth the hardest.
One in five young women remains unemployed, while one in four educated young women is without a job, the Washington-based organisation added.
In urban areas, job creation stagnated outside Dhaka and labour participation fell, particularly among women, it said, adding that half of all youth aged between 15 to 29 work in low-paying jobs, suggesting a skill-mismatch.
"For millions of Bangladeshis, both international and domestic migration proves to be a pathway out of poverty. Remittances helped reduce poverty and benefited poorer households most. But domestic migrant workers suffer from poor living conditions in congested urban settlements, while the pathway of international migration is limited to those who are better off, due to the high costs involved."
It went on to say that although Bangladesh has expanded social assistance programs, they remain inefficient and poorly targeted.
In 2022, 35% of the richest families received social protection benefits, while half of the poorest families did not, the bank noted.
Moreover, subsidies are often misdirected, with wealthier households receiving the bulk of the benefits from electricity, fuel and fertiliser subsidies, it added.
"Bangladesh has reduced regional disparities, particularly the East–West divide. But climate risks are exacerbating spatial disparities, particularly between rural and urban areas," said Sergio Olivieri, World Bank senior economist and report co-author.
"Our poverty assessment shows that by adopting innovative policies, Bangladesh can restore and accelerate the pace of reducing poverty and boosting shared prosperity by improving connectivity, creating quality urban jobs, facilitating pro-poor value chains in agriculture, and making social protection effective."
