Income inequality rises amid declining poverty: BBS report

Despite a drop in poverty, the country has seen a worrying rise in income inequality between 2016 and 2022, according to the latest survey by the Bangladesh Bureau of Statistics (BBS).

Unveiled at the BBS auditorium yesterday, the Household Income and Expenditure Survey-2022 reveals that the income Gini coefficient was 0.499 at the national level in 2022 – with 0.446 in rural areas and 0.539 in urban areas.

The Gini coefficient (Gini index or Gini ratio) is a statistical measure of economic inequality in a population. Generally, a country is considered to have high inequality in people's income if the Gini coefficient is 0.500. 

With a Gini coefficient of 0.499, Bangladesh sits precariously close to the territory of high inequality.

In 2016, the income Gini coefficient was 0.482 at the national level with 0.454 in rural areas and 0.498 in urban areas.

In 2010, it was 0.458 at the national level with 0.431 in rural areas and 0.452 in urban areas.

Mohiuddin Ahmed, director of the survey project of BBS, presented the final report.

The survey also revealed that household income has increased while poverty and extreme poverty have decreased across the country.

The survey shows a significant decrease in the Head Count Ratio (HCR) using the upper poverty line from 24.3% in 2016 to 18.7% in 2022 at the national level. This translates to a 5.6 percentage point reduction, impacting both rural and urban areas with drops of 5.9% and 4.2%, respectively.

The HCR is the population proportion that exists, or lives, below the poverty threshold.

Dr Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre (PPRC) and chairman of BRAC, was present at the report unveiling event as a special guest.

He said the bottom 50% of the population scrape by with a mere 18% share of national income, while the top 5% hoard a staggering 30%, leading to this surge in income inequality.

Besides, the poverty situation in divisions has also changed. Rangpur Division is no longer the most poverty-stricken. It is replaced by the Barishal Division.

The HCR of the Barishal Division in 2022 is the highest among eight divisions using both upper and lower poverty lines. The HCR in Barishal in 2022 is 26.9% using the upper poverty line and 11.8% using the lower poverty line.

Meanwhile, among the divisions, Khulan has 14.8%, the lowest HCR, using the upper poverty line, and Dhaka has 2.8%, the lowest HCR, using the lower poverty line.

Hossain Zillur Rahman said Khulna, despite facing the impacts of climate change the most, saw a drop in poverty.

He emphasised the crucial need to prioritise protecting people hovering just above the poverty line during poverty reduction efforts. Any unexpected setbacks, even minor ones, could push them back into poverty. 

He said sustainable poverty alleviation hinges on supporting this vulnerable group as a buffer against potential shocks. 

He further stated that adjusting household income for inflation may have revealed a different, possibly less favourable, picture of the poverty situation.

Planning Minister MA Mannan and former State Minister for Planning Shamsul Alam were present at the event and they acknowledged the growing inequality in income. 

They said that inequality increases at the initial stage of development and then gradually decreases.

Household Monthly Average Income doubled

The household's average monthly income has increased in nominal terms to Tk32,422 in 2022, from Tk15,988 in 2016 and TK11,479 in 2010.

The survey reveals that the household's monthly total expenditure has increased nominally to Tk31,500 in 2022 from Tk15,715 in 2016 and Tk11,200 in 2010.

The average protein intake is 72.5 grams per person per day in 2022 which was 63.8 grams in 2016, 66.26 grams in 2010, 62.52 grams in 2005 and 62.50 grams in 2000.

The survey finds that household-level access to electricity has increased to 99.3% in 2022 from 75.9% in 2016 and 55.3% in 2010. Similarly, 92.3% of households have access to improved toilet facilities, and 96.1% have access to improved sources of drinking water. 

Notably, Bangladesh's literacy rate (7 years and over) rose significantly to 74.0% in 2022 from 65.6% in 2016 and 57.9% In 2010.

In the latest survey, the BBS made significant developments by selecting the quality enumerators, conducting residential training, Introducing CAPI (Computer Assisted Personal Interviewing), improving data collection tools, substantially increasing the number of food and non-food items based on COICOP (Classification of Individual Consumption by Purpose), and implementing continuous monitoring and supervision etc.