The Sixth Five Year Plan, as outlined in Bangladesh's Poverty Reduction Strategy Paper, targets strategic growth and employment. The medium-term macroeconomic framework plan entails the involvement of both the private and public sectors. Human resources development strategy programs reaching out to the poor and the vulnerable population, as well as environment, climate change, and disaster risk management, have been included in the plan. Managing regional disparities for shared growth and strategy for raising farm productivity and agricultural growth have been outlined. Diversifying exports and developing a dynamic manufacturing sector are all inclusive in the proposed plan.


The Sixth Five Year Plan, as outlined in Bangladesh's Poverty Reduction Strategy Paper, targets strategic growth and employment. The medium-term macroeconomic framework plan entails the involvement of both the private and public sectors. Human resources development strategy programs reaching out to the poor and the vulnerable population, as well as environment, climate change, and disaster risk management, have been included in the plan. Managing regional disparities for shared growth and strategy for raising farm productivity and agricultural growth have been outlined. Diversifying exports and developing a dynamic manufacturing sector are all inclusive in the proposed plan.

Chapter 9: Reaching Out The Poor And The Vulnerable Population


Poverty is the single most important socio-economic policy challenge for Bangladesh. Bangladesh has been struggling for a long time to reduce the incidence of poverty and to improve the living standards of its millions of impoverished citizens. In recent decades, Bangladesh has made significant progress in reducing poverty where the percent of population living below the poverty line went down from more than 80 percent in early 1970s to 31.5 percent in 2010 (Table 9.1). However, Bangladesh still faces the reality that 46.8 million of its population live in poverty.

Table 9.1:

Headcount Poverty Rate (%)

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Source: Different HES, HIES

The decline in poverty in Bangladesh stems in large part from strong, decade-long economic growth. The economy’s expansion during the 1990s – on average annual real GDP increase of almost 5 percent – meant a rise in real per capita GDP of 36 percent or twice the average rate of other low-and middle-income countries during the same decade. This impressive performance was fueled by large jump in real GDP in the expanding industrial sector where the output of export-oriented ready-made garment (RMG) enterprises grew by double-digit increments. Also, remarkable growth in the inflow of remittances helped reduce headcount poverty.

Despite the progress in alleviation of poverty, Bangladesh still has a larger proportion of people living below the poverty line income defined as $1.25 a day compared to many developing countries (Figure 9.1).

Figure 9.1:
Figure 9.1:

Poverty headcount ratio at $1.25 a day (PPP) (% of population) in 2005

Citation: IMF Staff Country Reports 2013, 063; 10.5089/9781475521344.002.A018

Source: World Bank, World Development Indicators

The other dimension of poverty is the spatial distribution of poor beyond the urban-rural divide. This concerns the distribution of poverty by districts and divisions. The data suggests an East-West divide in the distribution of poverty, with a significantly higher poverty incidence in the Western Divisions of Rangpur, Barisal, Khulna and Rajshahi as compared with the Eastern Divisions of Dhaka, Sylhet and Chittagong (Table 9.2).

Table 9.2:

Distribution of Poverty by Divisions

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Source: BBS, HIES 2005 and HIES 2010

A yet another aspect of the poverty profile is the hard core or ultra poor. These are the poorest of the poor category and are characterized by much deeper impoverishment and deprivation than the normal poor. They are also amongst the hardest to reach by the normal growth process and would likely require targeted poverty reduction programs. Locating these poor and targeting policies and programs to lift them from the poverty trap is a real challenge and requires concerted efforts. Table 9.2 also suggests that in 2010 there were still 17.6 percent of the total population (26 million people) in extreme poverty.

These various aspects of the poverty profile suggest that growth strategy alone will not be able to fully solve the poverty problem in Bangladesh. While growth acceleration and job creation will be the primary foundation for the poverty strategy, this will need to be complemented by a well designed specific and targeted interventions that go to the bottom of the various factors contributing to the rural-urban poverty divide, the regional variations in poverty, and the large concentration of ultra-poor and seek to remove those constraints. This is a long-term challenge, but the Sixth Plan is well placed to address many of the concerns.

Strategies for Poverty Alleviation in SFYP

Part 1 of the Plan provides a detailed discussion of strategies and policies for growth, employment and poverty reduction. The relationship between growth, employment and poverty on the one hand and specific disadvantages and vulnerabilities of the poor and other vulnerable population that need to be addressed in order to protect these population are discussed further below.

At the operational level the fundamental task of the SFYP is to develop strategies, policies and institutions that allow Bangladesh to accelerate growth and reduce poverty. Poverty is still pervasive. An essential pre-requisite for rapid reduction of poverty is to attain high economic growth ensuring sustainable productive employment and incomes for large number of people of Bangladesh. Productive employment is the most potent means of reducing poverty. But this is not easily achieved. This requires strategies and actions on the demand side of the labor market (driven primarily by economic growth) as well as strategies and policies on the supply side (labor force growth and quality).

Acceleration of economic growth and employment: On the demand side, both the rate of economic growth and its composition will matter for job creation. Acceleration of the growth rate will require a substantial increase in the rate of investment from the present 24 percent of GDP level. Much of the higher investment will need to be deployed to reduce and eventually eliminate the infrastructure constraint (primarily power and transport) and to strengthen human development. A large part of the financing will come from the domestic public resource mobilization and from higher private savings, including from remittances. Yet some critical level of financing from foreign sources that are strategic in nature and allow transfer of technology will be necessary.

Rapid economic growth, its composition and absorption of labor in high productivity, high income jobs are inter-linked. Low income elasticity of basic food items, land constraint and difficulties of penetrating the world agricultural export markets limit the ability of agriculture to grow at the same pace as manufacturing or services. Presently the average labor productivity and income in agriculture are also very low. Similarly a large part of the labor force is occupied in informal services with very low productivity and income. Accordingly, the economic growth process in the Sixth Plan needs to be appropriately balanced, thereby creating more employment opportunities in the manufacturing and organized service sectors and allowing a shifting of large number of workers engaged in low productive employment in agriculture and informal services to these higher productivity sectors of the economy.

Therefore, much of the high productivity, high income jobs will need to come from a labor-intensive manufacturing sector based on domestic and export markets and from organized services. Both large and small enterprises need to contribute to this growth. The role of small enterprises is particularly important to provide the employment base. The promotion of small enterprises in rural areas needs to be a major strategic element for creating higher income and employment in the rural economy, which is critical for sustained poverty reduction.

The re-balancing of the growth and employment process must be accompanied by strategies to enhance the income-earning opportunities of workers remaining in agriculture by raising land productivity and increasing diversification of agriculture production. Agriculture diversification in both crop and non-crop sectors will help promote commercialization of agriculture and raise farm incomes

Employment abroad and associated remittances have played a major development role in Bangladesh. This element of the employment strategy will be strengthened. In addition to pursuing the strategy to export low skilled manpower, the Sixth Plan effort would focus on export of well trained skilled and semi-skilled manpower to existing as well as new destinations.

Benefiting from higher labor force growth (the demographic dividend) and ensuring labor quality: Although Bangladesh is currently experiencing ‘demographic transition’ as a result of slower population growth, entry of young population in the labor force will continue due to demographic factors. This demographic dividend needs to be properly used through a well articulated human development strategy. The quality of labor force is weak due to low access and low quality of education. The Sixth Plan will seek to address these challenges by developing and implementing a well thought out education and training strategy. The strategy needs to be particularly sensitive to reduce the access gap of the poor and the women, especially in the under-developed or lagging regions of the country. A significant part of the additional investment for higher growth will need to be deployed to the development of the labor force with special emphasis on the target group.

Ensuring food security: The recent global food price inflation illustrates the critical importance of ensuring food security for a large poor country like Bangladesh. Past progress in rice production suggests that Bangladesh has the capacity to achieve food security efficiently through domestic production. Indeed, with proper incentives there is scope for food exports. The emphasis on productivity improvements will be particularly helpful in reconciling food security objectives with farmer incentives. Along with supply side policies for food production, efforts are needed to ensure that the poor and vulnerable population has the income and means to procure the required amount of food and nutrition.

Managing the spatial dimensions of growth: Growth experiences in Bangladesh and elsewhere demonstrate both a tendency towards urbanization as well as uneven regional growth. The urbanization problem has become particularly acute in Bangladesh owing to the primacy of Dhaka. The unbalanced growth of Dhaka shows both a large concentration of wealth and income as well as unsustainable pressure on Dhaka’s already fragile infrastructure. The urban poor are located in a large number of slum areas of Dhaka and other metropolitan city with terrible quality of life due to lack of access to proper shelter, water, electricity and sanitation. Concerning regional disparities, the divisions of Dhaka, Chittagong and Sylhet seem to do better in terms of both growth and poverty reduction as compared with Rangpur, Barisal, Khulna and Rajshahi. The poor of the lagging regions are especially vulnerable in terms of access to employment and income options.

The Sixth Plan will make efforts to address both these spatial dimensions of growth. On the urbanization front the strategy will emphasize a more balanced growth of urban centers across the entire country through proper institutional reforms that involves the establishment of locally elected and accountable city corporation/municipalities. Property tax base will be reformed to strengthen the financial autonomy of corporation/municipalities along with block grants from the budget based on principles of equity and population. Special emphasis will be given to improving land administration and management to arrest the spiraling urban land prices that is becoming a binding constraint to the expansion of manufacturing and modern services as well as limiting the ability to provide affordable housing. Efforts will be made to upgrade the living conditions in the slum areas through a range of measures including better shelter opportunities, proper water supply and sanitation services and electricity services. Regarding regional disparities, the Plan would strive to address the lagging regions problems, especially focused on Rangpur, Khulna, Barisal and Rajshahi Divisions, through a strategy that involves public expenditure in infrastructure and human development, by improving the access to financial services, by promoting international labor migration from these divisions, and by facilitating more trade and investment in the border districts with neighbors including India.

Reducing income inequality: Inequality emerges from a combination of greatly unequal distribution of physical assets as well as human capital. Lack of factor endowment such as land, capital, credit and skills has been preventing poor people in Bangladesh to participate in productive economic activities and has compelled them to remain in a disadvantageous situation. Opportunity to break the low factor endowment trap through utilizing essential public services (such as education, training, safe drinking water, sanitation and other health facilities) has not been effective due to poor people’s limited access to those provisions. Access to these essential services for the majority of the population depends not only on their income levels but also on the quality and efficiency of the service delivery through the publicly funded and operated systems. Accordingly, the Sixth Plan’s strategy to reduce income inequality will follow a two-prong strategy. First, it will include efforts to increase the access of the poor to assets and means of production. And second, it will strengthen the delivery of human development services to the poor.

The strategy for enhancing the poor group’s factor endowment in the Sixth Plan will be focused on ensuring better access by the poor to irrigated water, fertilizer, electricity, rural roads and institutional finance. The government’s public expenditure policies and programs and the financial sector strategies and policies will pay specific attention to implementing this strategy.

A substantial expansion as well as quality enhancement of the supply of essential human development services for the poor will be done over the Sixth Plan period. The strategy will include developing a system of accountability and transparency in the delivery of these essential services to ensure availability of appropriate staff and adequate services for the poor. The human development strategy of the Sixth Plan will focus on these aspects in the design of strategies, policies and programs.

Ensuring social protection for the under-privileged population: Even with higher growth, better jobs and better access to essential services, a part of the under-privileged population will likely be left out. Additionally, substantial risks are posed by natural disasters and climate change for this vulnerable population. To address this challenge, the Sixth Plan aims at significantly strengthening the social protection programs. The strategy will be to design and implement a range of social protection programs that meets the needs of this under-privileged group. In this regard, existing programs will be reviewed and reformed to establish better targeting with a view to ensuring that all under-privileged groups including the disable, the elderly, the tribal population, and children and women at risk are given priority in the distribution of benefits. Particular attention will be given to strengthening the underlying institutions.

Ensuring gender parity: Despite solid progress in improving gender balance in education and steps towards empowering them in areas of employment and political space, the gender gap between men and women remains large in Bangladesh. The women and girl child in the poor households tend to be worse off compared to male members, labor force participation of female still remains low, and wage differential between male and female still remains substantial.

The National Policy for Women’s Advancement 2011 provides for the elimination of all forms of discrimination against women, equal rights of inheritance to property and equal partnership in development. Accordingly, establishing equal opportunities for women in all sections of the society with an objective of integrating them into social and economic sphere is a major strategic element underlying the Sixth Plan. The Sixth Plan strategy embeds the critical role of women in nation building and thus ensures that their needs, rights, entitlements and contributions are appropriately reflected in the Plan document. The human development and social protection strategies underlying the Plan will place particular emphasis on gender aspects of development. It is also recognized that women are a heterogeneous groups such that their situations, deprivations, and needs vary according to their locations within various communities, religions, and regions. Thus, along with promoting rights and entitlements of women, Sixth plan envisages to cater to all these differential and specific requirements.

Sustaining growth and protecting the poor from the adverse effects of environmental degradation and climate change: Natural resources like land and water are limited and their per capita availability is diminishing due to rising population on the one hand and also due to excessive use of common pool resources on the other hand. Excessive and indiscriminate use of our natural common pool resources has degraded them to an unusable state. The degradation of natural resources reduces the well-being of people; especially the poor and women suffer more, as they depend much more on natural common property resources for fuel and water. Thus, the focus of the Sixth Plan’s environmental protection strategy would be the conservation and maintenance of natural resources, reducing air and water pollution, and liberating encroached rivers, water bodies, forest areas and khas land.

Bangladesh is a victim of climate change caused by activities worldwide. The growing evidence on climate change suggests that Green House Gas (GHG) emissions, resulting from the cumulative action of developed and emerging economies, would have serious deleterious effects in near future, unless effectively contained. It is predicted by international agencies that Bangladesh will be adversely affected by climate change in the form of melting of Himalayan glaciers, global warming and rising sea level, intensified natural calamities, and greater water scarcity leading to loss of livelihood, rising unemployment and poverty. Furthermore, a rise in the sea level, leading to coastal submergence (i.e. 17 % of Bangladesh) would cause large-scale displacement of people. Clearly, the vulnerability of the poor to climate change is large. The Sixth Plan will take effective steps in collaboration with the international community to help Bangladesh address the adverse consequences of climate change. An acceptable and workable collaboration strategy must include fair and just burden sharing for mitigation as well as adaptation strategies across nations. In order to realize these objectives, mainstreaming of climate change and environmental issues into national planning process is being initiated.

Strengthening the Participation of the Poor in Growth Activities

The Sixth Plan recognizes that the full participation of the poor in growth activities will not be possible unless the constraints are removed. The main constraints are lack of access to factors of production and the lack of human capital. The two are inter-related and a comprehensive poverty reduction strategy must work on both fronts. The issues of how to ensure the access of the poor to human capital are discussed in detail in Chapters 7 and 8. The discussion below focuses on the Sixth Plan’s strategy for strengthening the access of the poor to factors of production.

Some 80 percent of the Bangladeshi poor live in rural areas. The correlation between occupation of head of household and the rate of poverty in 2005 is shown Table 9.317. For both rural and urban areas, the incidence of poverty is highest for households where the head is employed as a daily wage earner in either agriculture or outside agriculture. The poverty incidence is lowest for households in urban areas where the head is occupied as a salaried employee. The distribution of

Table 9.3:

Poverty Rate and Occupation 2005

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Source: Bangladesh Bureau of Statistics, HIES 2005

The poor by population share suggests that much of the rural poor are engaged in agriculture, either as small holders or as daily laborers. A significant population share of the poor is also engaged in non-farm enterprises. The share of salaried population is the smallest, only 10 percent. Salaried head of household is relatively better off in both urban and rural areas although the poverty rate is much higher among rural salaried head of household than in the urban areas.

The results of Table 9.3 have major implications for designing employment strategies for the poor:

First, the creation of good paying salaried jobs in both urban and rural areas is important. This suggests the need for supporting the development of modern service sectors. The expansion of banking, government services, health, education, IT, trading and transport services will all augur well for job creation in the service sector. Employment in services sector for the poor will require major improvements in education, training and health services. So, access to better human capital for the poor will be critical.

Second, better access to credit and farm inputs will be essential to enable the marginal farmers and daily farm laborers to get out of the poverty trap. The most critical factor is land. Landless and near landless households tend to have high incidence of poverty in rural Bangladesh (Table 9.4). The one positive development is that some of the landless have moved out of poverty by finding other sources of income. Nevertheless landownership remains a major determinant of rural poverty in Bangladesh. The policy options however are rather limited. With growing population pressures land has become a hugely scarce factor of production. Also average size holdings are relatively small with limited redistribution prospects through land reforms. Similarly, Government land has also been encroached upon by land grabbers leaving little scope for redistribution. However, government policy can contribute by improving the functioning of land markets through digital record keeping of ownership and transactions, proper land valuation, proper zoning policies, and preventing encroachment of government lands.

Table 9.4:

Land Ownership and Poverty in Rural Bangladesh

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Source: Bangladesh Bureau of Statistics, HIES 2000, 2005

On the agriculture input side there are much better prospects for policy intervention through a better distribution of farm subsidies on water, fertilizer and seeds. Indeed, better access of the poor to these inputs will raise farm productivity and help both the small holders as well as the farm workers. Another intervention is through research and development and agricultural extension services focused on the poor.

Third effective support to agricultural marketing could be another pro-poor policy intervention. The imperfections in the marketing of farm produce are well known. Much of this has to do with the lack of adequate farm-to-market roads and proper storage facilities. Government investment in rural roads can be a very powerful pro-poor policy intervention.

Fourth, the difficulties of providing the poor farmers with credit for investment and working capital are a well known problem. Better targeted provision of farm credit through commercial banks can play an important role in reducing rural poverty.

Fifth, growing land constraint and the need to raise farm productivity suggests that increasingly more reliance will need to be put on non-farm sources of income and employment. This transformation is already underway but will be boosted further in the Sixth Plan. A host of factors impact on the growth and dynamism of non-farm enterprises including technology, entrepreneurship, and access to infrastructure, especially electricity, but perhaps the most important factor is access to credit. The ongoing micro-credit revolution pioneered in Bangladesh has already demonstrated the power of micro-credits in reducing poverty.

Finally, the access to remittance income is a significant positive determinant of poverty reduction. The Sixth Plan will make special efforts to support the expansion of migrant workers to international markets, particularly from the lagging districts.

The role of micro-credit, remittances and rural non-farm employment in poverty reduction and the specific policy interventions to be taken in the Sixth Plan are reviewed below in greater detail.

Critical Role of Access to Finance for Poverty Alleviation

A review of the characteristics of the poor shows that lack of assets is a critical determinant of poverty. This is in terms physical assets, financial assets as well as human capital. Human development policies focused on health and education is a powerful instrument for equipping the poor with human capital and is a great equalizer of opportunities. Regarding physical assets, short of redistributing land, possibly the most potent way of enhancing the opportunities for capital accumulation is better access to financial resources at an affordable price

Three financial service requirements have been identified that will reduce income vulnerability and enhance income level. They are:

  • (i) Access to credit of poor households: It will relax liquidity constraint of the resource constrained poor households and create economic opportunities, though marginal benefit of such access to credit will depend on access to economic information and skills of the borrowers.

  • (ii) Access to social safety net programs: Poor are subject to both income and consumption vulnerability. The social safety net programs can minimize income and consumption vulnerability for the extreme poor households. Expansion of such programs can be complimentary to the first requirement that we have mentioned. Consequently, marginal benefits of access to credit will be higher.

  • (iii) Access to insurance for protection and preservation of assets/wealth: Poor households, like everybody else, are subject to life and property risk as well as credit risk. Death or disability of bread earner or damage to property due to natural calamities makes poor households more destitute. In such a situation, access to micro insurance can protect family from income shocks and preserve wealth.

Micro finance revolution that started some three decades age has brought changes in financial landscape in rural financial markets. Poor that did not have access to credit can access credit. Micro finance institutions address the problem of formal market failure due to adverse selection and moral hazard. On the other hand, it offers institutional framework that can make rural financial market more effective. The major elements of micro finance are: (i) self-selected group; (ii) compulsory savings; (iii) participation of poor members in investment decisions, and (iv) joint liability of the group members for loan default.

Micro Finance Addresses Needs of the Ultra Poor

Targeting ultra poor is another frontier of micro finance movement in Bangladesh. More than 20 percent of rural population lives in extreme poverty. These households live below lower poverty line, which is defined as the line where average food consumption per capita is equal to average total consumption implying that the households did not have any any-food expenditure. It is also defined in terms of minimum food calorie, 1805 kilo calorie. These households are also termed as ultra poor. MFIs have been addressing the needs of the ultra poor through different programs.

Beggars, destitute, landless, daily wage earners, bonded labor, female headed poor households, physically handicapped, seasonal labor, poor households living in char and/or flood prone or river erosion areas and households with no regular income flow are generally under the UP programs. Generally they are in structural poverty. In case of structural poverty, special focus is needed to push them forward.

MFIs in Bangladesh have been pursuing flexible system to provide financial services to the ultra poor. There are variations in approaches as practiced in Bangladesh. Although generally group approach is pursued, most MFIs tend to follow individual approach. Flexible loan contract as well as loan interest rates are offered. Common lending interest rate is 20 percent. In case of ultra poor programs interest rates vary between zero and 15 percent. Repayment installment system is flexible. Flexible payment system based on the ability of ultra poor is followed. Like traditional micro finance programs, savings is the dominating element. The major MFIs in Bangladesh have been implementing separate programs for the ultra poor. BRAC has an approach with assets transfer and training support in addition to daily subsistence allowance. Grameen Bank has Beggars’ program (interest free flexible loan repayment system). It has a credit guarantee scheme under which UP trader’s trade credit for goods worth max Tk.2000 ($30). The supplier of credit gets GB guarantee. ASA has a special program for the UP which is offered through specialized branches. Loan contract is flexible – repayment schedule. PKSF has been implementing HP program through its partners with flexible terms and conditions.

Bangladesh MFIs have made significant progress in reaching out the ultra poor. Around 4 percent of the members are ultra poor members when micro finance coverage of ultra poor is compared with the total number of members mobilized. Around 1.38 million ultra poor members have been brought under micro finance net by the end of 2008. Of them around 80 percent were borrowers. Loans outstanding amounted to Tk. 2.25 billion. The design of the ultra poor programs enables its members to save. Around 29 percent of the loans outstanding were member net savings. This reflects that even the ultra poor can save if appropriate instruments are available.

Micro finance has expanded tremendously both horizontally and vertically. With wider branch network, MFIs have been able to expand financial services to the millions of poor members and borrowers. Financial products are diversified – from traditional small business to livestock development and manufacturing. From the portfolio mix of the lenders, one is able to derive information on demand side. Livestock has a higher demand. This is less risky. Small business remains prominent sector. Demand for loans for financing these sectors has grown over time. Increase in the supply of loans is a testimony of such higher demand.

Role of Micro Finance in Reducing Seasonal Poverty and Vulnerability

Poor households are vulnerable because of idiosyncratic risk and covariate risk. The presence of these risks affects both poor and non-poor. In either of the cases, it makes them vulnerable. In some cases, covariate risk, like flood, cyclone, tornado and other natural disaster, may contribute to seasonal poverty. In this section, we use the term ‘vulnerability’ in terms of consumption vulnerability, income vulnerability and exposure to different shocks. We present two evidences – one on monga where consumption vulnerability is extreme, and the other one on exposure to different shocks, based on a national survey. Both the surveys were conducted by Institute of Microfinance.

Monga (famine like situation), caused by flood or draught, in north-western Bangladesh is frequent. It is essentially caused by inadequate employment opportunities for the poor during September-November when there is no farming. It is equally observed in Southern Bangladesh where intensity of covariate risk is colossal, caused by cyclone, for example. In the northwestern region of Bangladesh, intensity of poverty increases during monga, although poverty is structural in nature. The Government of Bangladesh has been expanding social safety net programs like food for works programs, 100-day employment guarantee scheme, old age pension scheme. Despite expansion, its ability to outweigh marginal loss from covariate risk is limited as not all poor are under these programs and the amount of benefit is small. In such a situation, more long term interventions are required. In the case of monga type of situation, off-farm economic activities need to be created so that farm-based employments can be largely substituted by off-farm based employment opportunities. In the case cyclone driven covariate risk requires larger interventions. In either or both the cases, two financial services will be required – one, provision of micro credit, and second, provision for micro insurance.

Micro Finance in Bangladesh: Present Scenario

Bangladesh has experience of over two decades in micro finance. Some 750 micro finance institutions with a network of some 16000 branches have been operating. In 2008, annual disbursement was around Tk.300 million (US$4.2 billion), loans outstanding of Tk.220 billion (US $3.3 billion) and net member savings of Taka 140 billion (US$2 billion). Annual loans disbursement has grown during the past five years at a rate of 20 percent. Average loan size is around Tk.23,000. Micro credit is diversified in nature. Micro enterprise loans, relatively large loan varying between Tk.30,000 and Tk.500,000 constitute around 14 percent of the loans. Around three million borrowers are micro enterprise borrowers. In addition, micro credit is targeted for ultra poor. More than 12 percent of the borrowers are ultra-poor.

Although poor households benefit from micro credit the larger effect of micro credit can be found only when vulnerability of poor households is minimized. The poor are vulnerable to seasonal poverty and different shocks including lumpy expenditures for children, marriage and major medical treatment. Seasonal poverty arises because of natural disaster such as monga in the greater Rangpur region and Sedor in Southern region. Vulnerability to shocks is common. The net gains from micro credit are, in case of any covariate shock of higher magnitude like Sedor, not sufficient to cope with vulnerability to consumption and income loss. In other cases, micro credit has contributed to minimizing vulnerability to consumption and income. The less vulnerable are the households with off-farm self-employment. In the greater Rangpur region, during the period of monga, households with self-employment had twice more employment days than the households depending on wage employment only. Micro credit does contribute to off-farm employment creation. It is not only the natural shocks that the poor are exposed to. They are exposed to idiosyncratic shock like health related shocks. Often we do not find negligible net economic impact of micro credit from one point to another point.. Idiosyncratic shocks like lumpy medical expenses or cost of marriage reduce net gains from micro credit. Idiosyncratic shocks are costly and they create both short and long run burden. Micro credit reduces such vulnerability of the households.

Access to Rural Credit

Although non-government micro finance programs dominate micro credit market structure, the GoB micro credit programs are no less important. The noted sources are Bangladesh Rural Development Board (BRDB) and Palli Daridra Bimachan Foundation (PDBF), organizational transformation of BRDB’s RD-12 program. BRDB has been promoting rural development through providing both rural finance including micro finance, and skill development training. It has been contributing substantially. Nevertheless, both PDBF and BRDB have expanded credit substantially during the past years.

Recognizing the strong social capital and other qualities of poor people and considering the potential of microsavings in developing the asset base for the poor, the Government has designed and developed the Project “One House – One Farm” popularly known as “Ekti Bari – Ekti Khamar”. The project components include: formation of comprehensive village development cooperative societies, introducing contributory microsavings to attract poor people for making small savings through incentives, providing seasonal microcredit to support micro-investment in the farm sector, development of farm-based volunteers mainly in the field of homestead agriculture, poultry, fish culture, livestock farming, forest nursery and horticulture. This programme will develop cooperative marketing to ensure proper prices for the farmers and promote food processing and other agriculture product processing at the grassroots level. Efforts will be made to develop community food storage system to ensure food supply and food security at lower cost at the community level.

Table 9.5 shows an increasing trend in the disbursement of targeted agricultural and specialized programs for rural development by the public sector banks. The share of specialized agricultural development banks (BKB and RAKUB) is consistently around 66 percent. Although disaggregation of such loans is not available, we find it difficult to point out the share of nonncrop loans. Nevertheless, anecdotal evidence suggests that around one-third of these loans are non-crop loans. These loans finance off-farm economic activities, and in turn self employment vis-à-vis income growth.

Table 9.5:

Targeted Agricultural and specialized Credit Program through Public Sector Banks and Cooperatives

(Taka in Crore)

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Source: Bangladesh Bank

Outreach of MFIs

Outreach of the MFIs is defined in terms of number of members, borrowers and branches. Wide expansion over the past six years has taken place. Number of members at the end of 2008 was 33.4 million, almost doubled during the past six years and grew at an annual rate of around 14 percent. More than 90 percent of the members are borrowers. Annual average growth rate has been more than 17 percent implying higher demand for credit. Over 600 MFIs mobilized these members through a network of over 14,500 branches,_three times the number of commercial and development bank branches in rural credit market (Table 9.6). Such expansion reflects (i) higher ability of the MFIs to provide financial services to the poor, and (ii) higher demand of poor for financial services. It, however, also reflects promotion and development of rural financial markets.

Table 9.6:

Bangladesh Micro Finance –Operational Outreach

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Source: Bangladesh Bank

Financial Outreach of MFIs

Financial outreach includes both credit and member savings. There has been higher growth in loans disbursement as well as loans outstanding during the past six years. The Industry that had disbursed Taka 60 billion through a network of 6,837 branches in 2003 had grown at an annual rate of 27 percent. In 2008, it disbursed Taka 209 billion (Table 9.7). Loans outstanding have been growing at a lower rate. Critics often argue that growth of credit is a reflection of growing indebtedness. This proved to be wrong even simply looking at the amount of savings that the members/borrowers have saved over time. The net saving balance was Tk.104 billion in 2008, which is around two-third of the loans outstanding. Net loan per borrower has also increased. It is interesting to note that while loans outstanding grew three times during the period 2003-08, net savings increased by around 3.5 times. This is only possible through higher growth rate of savings. This is further evident from the growth rate of average loans outstanding and average net savings balance. Average savings per borrower has grown at a higher than that of average loan balance per borrower. Savings not only makes the members financially independent but it also act as insurance in times of crisis. During the past several natural shocks, savings have played as a cushion for the poor members.

Table 9.7:

Financial outreach of the MFIs, 2003-08

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Source: Bangladesh Bank

Main Issues and Challenges in Microcredit

Microcredit has helped address poverty by providing loan in small amounts without collateral and has helped in particular women who are the target borrowers of micro lending. Over the years, various challenges with regard to microcredit have emerged. These are: (i) prevalence of high interest rates which are being reduced, but further reduction of interest rate is necessary; (ii) vicious cycle of microcredit - the poor are borrowing from one microcredit organization to repay another; (iii) microcredit programs have not been very successful in including the hardcore poor; (iv) rate of graduation to above the poverty line among the microcredit borrowers is low, indicating persistent dependency on microcredit; (v) most of the microcredit recipients being women, bear the burden of repayment; (vi) microcredit organizations compete with each other and often put pressure on the potential clients to borrow; (vii) profitability of micro enterprises is small and often is not sustainable on a long-term basis because of enterprise decapitalization, saturation of markets for products that are traditionally produced by microcredit borrowers, weak coordination among NGOs and MFIs and a weak financial system. Moreover, the dominance of weekly payment system attracted the micro-credit investment in the non-farm sector and farm sector remained unsaturated. Seasonal micro-credit is needed to saturate the farm sector.

Strategies for Microcredit Expansion in SFYP

The Sixth Plan’s micro credit expansion consists of the following:

  • Formal rural credit should be expanded from the present level of Tk. 7000 crore. It has been growing every year at an annual growth rate of around 10 percent. This is quite low. This has to be enhanced, and it should grow at 15% annually in order to create more demand for credit to finance off-farm economic activities including SMEs.

  • There is a formal market failure to address demand for credit of poor households. Public sector banks are inefficient and costly, and are not able to expand financial services to poor households for their high transaction costs and perceived associated risk of non-recovery of loans. Under these circumstances and in view of the successful experiences of micro financial institutions (MFls), the Government will emphasize on expanding financial services to poor households with equal opportunity for women through micro finance institutions because of their wider network and commitment.

  • Greater emphasis will be placed to increase the coverage of the program to a larger number of deserving households; introduce a uniform approach of operation both by NGOs and the public sector; and strengthen the regulatory framework for streamlining the activities of the microcredit program in the country. The Government would channel more resources for microfinance operations, minimize interest rate and increase effectiveness of microcredit for poverty alleviation, avoid overlapping and reduce seasonal vulnerability through microcredit. Local governments will be involved in microcredit delivery.

  • A Microfinance Regulatory Authority (MRA) has been established to provide appropriate regulatory framework. A national microcredit policy will be framed to provide guidelines about the operation of microcredit. It is also necessary to rationalize interest rates. Necessary mechanism will be devised to ensure that microcredit reaches the ultra poor and the hard to reach areas especially those located in regions with higher incidence of poverty.

  • Up-scaling microcredit is a natural consequence of microcredit program as the progressive microcredit recipients demonstrate their entrepreneurial ability to handle larger size loans requiring expansion, deepening and diversification of loan products. Some of the microcredit organizations, notably some partner organizations with support of PKSF, have increased their loan ceilings to Tk. 300,000 for microenterprise program and to Tk. 30,000 for all other programs. The microenterprise loan not only helps reduce poverty of the borrowing household but also creates employment opportunity for other poor people. It is expected that as more and more borrowers graduate out of the regular microcredit program the demand for larger size loans will increase. The Sixth Plan will facilitate this transition to scale up.

  • Special emphasis will be placed on micro enterprise development. Micro enterprise development can be engine of rural economic growth provided appropriate interventions are introduced. Credit as well as access to information and training will be required for micro enterprise development. Particular attention will be given to women who are lagging behind in micro enterprise development; and they will be provided with a better access to business and vocational training, micro enterprise credit and better market information.

  • Skill development of borrowers would contribute to income growth and efficiency in micro credit market. MFls would be involved in the process. Formation of Savings Groups will be encouraged.

  • Access to better information for microcredit borrowers will improve the productivity of credit. Special effort will be made to target the benefits of the ICT expansion program for these borrowers.

International Migration and Remittances

Bangladesh has benefitted tremendously from the large inflow of remittances. Evidence from Bangladesh and other South Asian countries show that income from remittances has been a major positive factor for the reduction of poverty. The Government has been striving hard to deepen overseas employment opportunities in different countries in the World. The major exporting countries of Bangladesh workforce have been Saudi Arabia, Malaysia and Abu Dhabi in terms of remittances and number of employments. The concerned ministry and the Bureau of Manpower, Employment and Training (BMET) have concentrated on the incentive structure required for cost-effective work force export as well as for remittances of foreign currency through formal channel. Table 9.8 shows number of exported work force and the amount of remittances received during the past ten years.

Table 9.8:

Trend in Number of Employment Abroad and Amount Remittances

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Source: Bangladesh Bank

Further efforts will be made in the Sixth Plan to promote migration, especially from lagging districts of the northern and north-western regions of the country. Two major interventions will be undertaken - skill development through training programs and financing of migration. Efforts will also continue to reduce the transaction costs of remittances through better banking support to migrant workers and also to ensure that male and female migrant workers are treated well and with dignity in host countries through the oversight by local embassies as well as through high-level policy dialogue with host governments as necessary.

Rural Non-Farm Activities

The Sixth Plan’s vision for rural non-farm activities (RNFA) is to foster such activities as an important and effective poverty reduction activity for women in particular. Therefore it is important to identify activities for RNFA and the roles of both public and private sectors and to encourage entrepreneurs to promote RNFA.

The following problems/challenges have been identified for RNFA: (i) since RNFA includes a diverse group of activities, it is difficult to define it as a sector and hence it lacks any baseline assessment; (ii) activities in RNFA are often financed by microcredit, which can only support very small-sized activities. There is a limitation in accessing finances for larger sized activities; (iii) people engaged in RNFA activities, particularly women, lack capacity and skill for producing quality products; have inadequate access to information in determining what to produce and often they lack skills in marketing their products; (iv) as institutional financing is mainly urban biased, problems arise since the NGOs are not very effective in providing business advice because they themselves are not well-equipped to provide such support; (v) management capacity of small enterprises operating in RNFA is rather poor; and (vi) RNFA suffers from inadequate infrastructural facilities particularly energy and communication;

Future strategies will focus on two broad areas: (i) improving the rural investment climate; and (ii) supporting institutional framework. Measures for improving investment climate will include ensuring more energy supply in the rural areas with emphasis on bio-fuel and solar energy use; emphasis on routine maintenance of the existing roads, development of waterways and railway communication; up-scaling and technology upgradation of small enterprises focusing on product development and quality improvement; provision of training for workers based on market demand and also for entrepreneurs in improved business method; promoting linkage with agriculture and greater value addition of farm products through a boost in agro-processing, arranging local-level fairs on routine basis to promote RNF products, skill development training and internship facilities, in-country and international tours through public-private financial participation.

In order to mainstream RNF issues in rural development, an institutional set-up will be formed with different stakeholders, including local government institutions, private entrepreneurs in RNF and providers of financing and other support services. These stakeholders shall identify the strategic policy and investment priorities. The government will consider instituting a monitoring unit to monitor implementation of the initiative and the results.

The RNFAs are undertaken mainly within the informal sector and it is desirable to keep them informal under the present settings. However, creation of an enabling environment for them and provision of some support services would make this sector more vibrant and will contribute substantially to poverty reduction. Some interventions that would be considered are: improving marketing capacity by providing sales centers in the GCM and other periurban markets where the government can provide supports and entrepreneurs can undertake a buy-back system; training and awareness building about hygienic agro-processing and food processing activities; strengthening SME Foundation to allow it to serve more effectively, providing women with basic skills about business management and steps linking them to markets, setting up of more vocational institutes in the rural and periurban areas, allocating more funds under microcredit and microfinance, improving the management of this sector through organizing training, orientation, and workshops, disseminating market information and providing institutional and logistic support to entrepreneurs, taking initiatives by the government to create ICT villages in rural areas and taking initiatives by government and NGOs to bring diversification in products and upgrading product designs.

Social Protection Programs for the Poor and Vulnerable

The Importance of Social Protection

The diverse underlying causes of poverty in Bangladesh include vulnerability, social exclusion, and lack of assets and productive employment; although the main symptom is often hunger and malnutrition. The extreme vulnerable poor can potentially lift themselves out of poverty with appropriate short to medium-term support. The extreme dependent poor, who are old, disabled or chronically sick, will depend on long-term social protection to survive. The children of the extreme poor, who are stunted or malnourished, are vulnerable to harassment, and have limited, or no access to education. A sharp rise in inequality would not only undermine the impact of growth, but may also threaten social cohesion and breed instability and discontent. Both poor and non-poor families are vulnerable to shocks (e.g. natural disasters, health problems) that can return them quickly into extreme poverty.

There are four major concerns that the current rate of progress in reducing extreme poverty may not be maintained: (1) slowdown in the global economy together with domestic factors; (2) growing population density is likely to force more of the poorest people to live in the most vulnerable areas; (3) climate change will exacerbate the vulnerability of poor people to environmental shocks, with the predicted increase in extreme climate events; and (4) demographic and social changes may further increase vulnerability and social exclusion.

Risks and vulnerability are mainstream problems in the lives of the average Bangladeshi and are recognized as such by governments, individuals and communities. Social Safety Net Programs to address risk and vulnerability have been an integral part of the anti-poverty strategy of this and previous governments. However, with inadequate informal social support, newer risks emerging from rapid processes of urbanization and global economic integration, and, stronger assertion of mitigation demands from a democratizing polity, a holistic re-thinking on the direction, scope and design of safety net policies in particular and social protection policy in general has become necessary. Social protection includes safety nets, various forms of social insurance, labor market policies as well as processes of self-help existing or emerging within society. Risk reduction and social protection are important not only in themselves but also because an unaddressed risk atmosphere carries negative psychological consequences for the livelihood of the poor and for community efforts needed for social cohesion.

Effective policy initiative on a holistic approach to social protection will require a sharper profiling of risks, old and new. These include disasters, anticipated risks such as monga and seasonal poverty, public health risks associated with the urbanization process, social ills such as dowry, erosion of family-based safety nets and emergence of new vulnerable groups such as the elderly and the disabled, and, the uneven globalization process which may give rise to new categories of poor whether in terms of worker displacement, livelihood losses or victims of environmental disasters.

An important corollary of moving towards a comprehensive approach on social protection programs will be the need to streamline the institutional strategy on implementation. The potential of local government bodies, particularly the Union Parishad, to coordinate a streamlined institutional strategy needs to be actively explored.

The Government’s Social Protection Programs

The Social Protection Programs address basic needs of the poor and vulnerable people, namely food, shelter, education and health. The government is also committed to achieve the MDG target of eliminating extreme poverty through an integrated and comprehensive social safety net program which will be sustainable. Government has allocated 15% of the total national budget against social protection program of the country which is 2.5% of the GDP of the 2010-11 FY. For ensuring social security of the vulnerable poor and their empowerment Disaster Management and Relief Division are implementing major social protection program. Among the primary government programs are: Food for Works (FFW), Vulnerable Group Development (VGD), Vulnerable Group Feeding (VGF), Open Market Sales (OMS), Cash for Work (CFW), Gratuitous Relief (GR), Employment Generation program for the Poorest (EGPP), Test Relief, old-age allowances, and allowances for retarded people, allowances for widow and distressed women, and grants for orphanages. There are also allowances for freedom fighters, programs for the physically challenged, and so on. Distressed people particularly women, children and disabled persons have been given priority. Programs are implemented through both non-development budget and development budget.

The Government views poverty from two broad perspectives – income poverty and human poverty. It identifies direct and indirect social protection programs to address these two types of poverty, where the direct measures (income/ employment generating programs) are considered as those that are targeted towards the poor, and indirect measures (human development program) are growth oriented and hence expected to leave indirect effects on poverty reduction. Examples of indirect or growth oriented measures cover mostly infrastructural development and rehabilitation programmes. However there are also safety net programs that merge the two concepts of direct and indirect measures. For example, a direct measure like Food for Work program that is targeted towards the poor is also used to construct infrastructural services, falling in the category of indirect measure. Table 9.9 presents the names and examples of major types of social protection programs in Bangladesh. Apart from their poverty focus, a part of the social protection programs is aimed at addressing the special needs of target groups within the poor and underprivileged group: physically challenged children, disabled persons, socially excluded population in tribal areas, poor women. Another part is transitory in nature that comes into play during natural disasters.

Table 9.9:

The Main Types of Social Protection Programs in Bangladesh

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Source: Ministry of Finance

For all programs the institutional arrangements are as important as their financing. Evidence suggests that the scope for improving the design of programs, their targeting and associated institutions is substantial. With limited resources, the emphasis on these aspects will be critical.

In addition to these programs, other social protection programs managed by various ministries are the following:

  • Programs under Livestock Sector to alleviate poverty

  • Fund for Housing the Homeless

  • Program for Generating Employment for the Unemployed Youth by the Karmashanghstan Bank

  • Abashan (Poverty Reduction and Rehabilitation) Project

  • Fund for Mitigating Risks due to Natural Disasters

  • Program for Mitigating Economic Shocks

  • Programs for Reducing Poverty and Generating Employment under the Ministry of Women and Children Affairs

A range of specialized institutions manage the various social protection programs:

  • Information and Communications Technology (ICT) for Poverty Alleviation

  • Rural Infrastructure Development Program

  • Palli Daridrya Bimochan Foundation (PDBF)

  • Bangladesh Academy for Rural Development (BARD)

  • Rural Development Academy ((RDA)

  • Department of Social Services

  • Palli Karma-Sahayak Foundation (PKSF)

  • Ministry of Food and Disaster Management

  • Bangladesh Rural Development Board (BRDB)

Public Spending for Social Protection

Expenditure on social protection programs is increasing over time. Fig 9.2 shows the trends in transfers as percentage of total expenditure and as percentage of GDP. These transfers have grown modestly both as a share of total expenditure and as a share of GDP. While the Government is committed to protect public spending on social protection, budgetary imperatives require much more attention to making these programs effective. Increasingly, efforts will also concentrate on securing more contributory social protection programs based on beneficiaries’ capacity to pay.

Monthly allowances for the elderly along with total allocations in the programs also increased. Table 9.10 shows the trends in old age allowance program.

Table 9.10:

Trends in Old Age Allowance Program

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Source: Ministry of Social Welfare

The key challenges of implementing SSNPs are coverage issues, targeting beneficiaries, leakages, and disparity in regional distribution. These are discussed below.

While coverage is relatively low, a significant number of households gain access to multiple programs. Data from a study of transfer programs shows that about a quarter of households were receiving transfers from more than one safety net program. Analysis of the HIES (2005) also showed that over 11% of households were participating in at least two of the three programs – VGD, FFE and FFW. Coverage in urban areas remains low.

Data indicate that 27% of VGD beneficiaries are not poor. 11% of participants of the PESP meet none of the eligibility criteria for program participation while almost none of the beneficiaries meet at least three criteria. Almost 47% of beneficiaries of the PESP are non-poor and incorrectly included in the program due to faulty and arbitrary selection procedure. Some of the vulnerable groups insufficiently covered or not covered at all, for example, the elderly, disabled and the women poor. All households within less-poor Upazila are denied assistance, including those with very high food insecurity.

Leakages in the FFW program have been estimated to be 26%. Leakage in the female stipend programs is in the 10-12% range. A PERC report (2003) shows that about 20-40% of the budgetary allocations for the female secondary stipend program does not reach the beneficiaries. Leakages from programs show a strong correlation with the number of intermediaries in the transfer process.

HIES 2005 showed that there was regional disparity in distribution of households receiving social protection benefits. Barisal and Rajshahi divisions, with the highest incidence of poverty, did not have the correspondingly higher number of social protection beneficiaries. In contrast, Sylhet Division, with the second lowest poverty incidence had the highest proportion of social protection recipients. However, the 2010 HIES data suggest that this anomaly was corrected. Khulna, Barisal and Rajshahi divisions have experienced considerable rise in the coverage of SSNP (Figure 9.3). This partly explains the larger reduction in poverty in these three divisions in 2010.

Figure 9.2:
Figure 9.2:

Trend in Total Transfers

Citation: IMF Staff Country Reports 2013, 063; 10.5089/9781475521344.002.A018

Source: Ministry of Finance
Figure 9.3:
Figure 9.3:

Poverty Incidence and SSNP Recipient by Divisions

Citation: IMF Staff Country Reports 2013, 063; 10.5089/9781475521344.002.A018

Source: HIES 2010

During the Sixth Five Year Plan, the coverage of SSNPs will further be expanded. However, efforts will be put in place so that such SSNPs do not lead the recipients to become heavily dependent on these programs and become work-aversive. The SSNPs will be linked to productive and employment creating activities. In this respect the institutional and human capacities of the disaster Management and Relief Division will be strengthened. Details Social Safety Net Programmes for the FY2011-12 is shown in annex Table: 9.13.

Participation, Social Inclusion and Empowerment

There are heterogeneous groups of people in the society with different identities and vulnerabilities. These groups face different realities, obstacles, and opportunities and have different needs and priorities. There is a need to take such differences into consideration to remove obstacles, address needs and expand opportunities for the people. The excluded, disempowered, and vulnerable members of society, in many cases are women, children, people from different ethnic communities, people with disabilities and other disadvantaged groups. The Government is keenly aware of the need to take legislative, administrative, judicial and financial measures to ensure the equality of opportunities and economic and social freedom for the socially disadvantaged and vulnerable population.

Women’s Advancement and Rights

Women frequently experience poverty differently, have different poverty reduction priorities and are affected differently by development interventions. In addressing gender based discrimination, the SFYP will follow a two-pronged approach. Firstly, gender will be integrated into all sectoral interventions. Secondly, attention will be given to remove all policy and social biases against women with a view to ensuring gender equality as enshrined in the National Constitution.

Vision and Goals: The vision for women’s advancement and rights is to create a society where men and women will have equal opportunities and will enjoy all fundamental rights on an equal basis. To achieve this vision, the mission is to ensure women’s advancement and rights in activities of all sectors of the economy.

The Government adopted the ‘National Policy for Women’s Advancement’ (NPWA) 2011 that aims at eliminating all forms of discrimination against women by empowering them to become equal partners of development. The overall development goal for women’s empowerment covers the following areas:

  1. promoting and protecting women’s rights;

  2. eradicating the persistent burden of poverty on women;

  3. eliminating discrimination against women;

  4. enhancing women’s participation in mainstream economic activities;

  5. creating opportunities for education and marketable skills training to enable them to participate and be competitive in all economic activities;

  6. incorporating women’s needs and concerns in all sectoral plans and programs;

  7. promoting an enabling environment at the work-place: setting up day care centers for the children of working mothers, career women hostels, safe accommodation for working women;

  8. providing safe custody for women and children victims of trafficking and desertion, and creating an enabling environment for their integration in the mainstream of society;

  9. ensuring women’s empowerment in the field of politics and decision making;

  10. taking action to acknowledge women’s contribution in social and economic spheres;

  11. ensuring women’s social security against all vulnerability and risks in the state, society and family;

  12. eliminating all forms of violation and exploitation against women;

  13. developing women’s capacity through health and nutrition care;

  14. facilitating women’s participation in all national and international bodies;

  15. strengthening the existing institutional capacity for coordination and monitoring of women’s advancement;

  16. taking action through advocacy and campaigns to depict positive images of women;

  17. taking special measures for skills development of women workers engaged in the export-oriented sectors;

  18. incorporating gender equality concerns in all trade-related negotiations and activities;

  19. ensuring gender sensitive growth with regional balance; and

  20. protecting women from the adverse effects of environmental degradation and climate change.

Current challenges: Bangladesh has made measurable progress in women’s advancement and rights in a number of areas including education, participation in labor force, health and nutrition, and participation in public services. In the area of women’s advancement and rights, the government has made strong commitments and undertaken various initiatives to reduce the gap between men and women. However, on the path towards achieving the desired goals of gender equality and gender mainstreaming, some challenges remain. These include:

  • The female-headed households usually earn less income since poor women have low earning capacity and their wages are lower than male wages.

  • Women are more susceptible to becoming poor when they lose the male earning member of the family because of abandonment, divorce, or death.

  • Women’s economic participation is low although increasing.

  • Violence against women is pervasive. Physical and sexual assaults, including acid throwing, are common. In addition, trafficking is also reported. Poverty, dowry, early marriage, superstition, social attitude etc. are the major causes of violence against women.

  • Women face social pressure for early marriage leading to loss of education, employment opportunities, decision-making power, and leading to early childbirth. The rates of maternal and infant mortality are high among adolescent mothers.

  • With higher incidence of droughts, floods, cyclones and other natural calamities due to looming threat of climate change, women are affected differently than men indicating the need to introduce gender sensitivity in coping mechanisms and strategies.

  • The main problem with gender governance is the implementation of the existing laws, rules and regulations and stated policies. In addition, reforms of some laws, rules and regulations, policies and the institutional mechanism are needed to make governance gender sensitive.

SFYP Strategy to Address Gender Issues

The main strategy and policy initiatives to improve the economic political and social inclusion and empowerment of women include:

  • Policy and legal framework: Taking the constitution as the basis, the government’s commitment to various international forums (CEDAW, Beijing Platform for Action etc.) would be taken into consideration in addressing women’s advancement and rights issues

  • Productive employment: To create more jobs, action would be taken to improve women’s employment opportunities and wages outside the household and also ensure equal pay for equal work. An enabling environment would be created in the workplace by establishing day care centers. Provision would be made for life and disability insurance for workers, especially women workers. Steps would be taken to ensure secure jobs and decent working conditions for women in the formal and informal sectors.

  • Enabling environment: Measures would be taken to develop advocacy for treating girl child and boy child equally and promote equal sharing of household and productive work. Necessary legal and administrative measures would be taken for ensuring a safe workplace, transportation facilities, and infrastructure like separate toilets, lunch rooms and lunchtime.

  • Eliminating female health and education disparities: The Sixth Plan will continue past efforts to remove all disparities in health and education indicators. Related sectoral targets and programs will build this objective as a major plan focus.

  • Priority to women in social protection programs: The existing programs for social protection for disadvantaged women would be continued. Gender sensitive measures would be taken to protect women from economic vulnerability and risk due to natural disasters. The effect of the emerging problems of climate change on women would be assessed for designing coping strategies and mitigation measures. Banks and micro-credit providers would be encouraged to extend small and micro-credit to the poor and the vulnerable.

  • Political empowerment and participation: In this context, the main targets are to ensure participation of women in the National Parliament and the local political institutions, influence political decisions in favor of women, ensure direct election in the reserve seats in the National Parliament and ensure women’s representation in the local bodies with authority and responsibility. Initiatives would be taken to make women politically more conscious, encourage women to participate in politics and to build leadership among women at all levels.

  • Addressing violence against women (VAW): The major targets for elimination of VAW are to ensure reporting of all VAW incidence, reduce reported VAW at least by half, consolidate the “One-Stop Crisis Centre” in medical college hospitals at divisional levels to provide medical treatment, legal and psycho-social counseling to women and children victims of violence, and providing shelter facilities and making efforts for their reintegration and rehabilitation in society. The police, the administration and the judiciary will be sensitized to apply CEDAW with provisions in cases of VAW and women’s rights.

  • Gender mainstreaming: Laws, rules and regulations, institutional mechanisms, policies, projects and programs which are not gender sensitive would be reformed. The intuitional mechanism for coordination and monitoring of gender equality issues would be strengthened.

  • Institutional strengthening: The National Council for Women’s Development (NCWD) would oversee women’s advancement-related activities by providing guidance and policy support. The Women’s Development Implementation and Evaluation Committee (MoWCA) will regularly review, evaluate and co-ordinate women’s development activities and assist NCWD by reporting on progress of implementation. The Women in Development (WID) focal point mechanism would be strengthened to play an effective role in leading the coordination, monitoring the implementation of women’s advancement and rights in policies, projects, programs.

  • Integrating gender issues in planning and budgetary processes: For integration, capacity building of relevant government officials on gender responsive budgeting and planning will be undertaken. The poverty and gender impact assessment criteria and yardsticks will be adopted in line with the policy agenda.

  • Strengthening female participation in economic decision making: Measures would be taken for ensuring participation of women producers, women trade unions and women entrepreneurs in trade negotiations and in various committees of the Ministry of Commerce, ensuring coherence between the dominant international economic agenda and the international legal obligations, making arrangements for market access to goods where women are ‘behind the label’, planning for market access to women in the secret services under Mode 4, encouraging FDI in women labor intensive industries, and ensuring women’s voice in international forums.

  • Addressing ethnic dimension of women: Special program for ethnic women including poor, destitute and elderly will be undertaken to address their needs. In order to increase productivity and diversification of activities, the ethnic women’s capacity would be enhanced through health, education and services.

  • Promoting public image of women: The media will be sensitized to promote positive images of women. In order to make the media more gender friendly, effort will be taken to establish increased linkages between women’s groups and the broadcasting agencies.

  • Disability and gender issues: Women with disabilities will be given preference under the safety net measures.

Children’s Advancement and Rights

Bangladesh has made significant progress in the area of child rights’ promotion, survival, and development. Nevertheless, the general situation of the children in Bangladesh needs to improve further since the survival and development of many Bangladeshi children is still threatened by malnutrition, disease, poverty, illiteracy, abuse, exploitation, and natural disaster.

The Vision: The vision regarding children’s advancement and rights is to create ‘a world fit for children’. The goals to be achieved are: (i) ensuring children’s rights and advancement through the implementation of government policies and legislations; (ii) providing health services the children need; (iii) ensuring access to food and nutrition they need; (iv) providing access to girls to education, training and development opportunities; (v) ensuring access to urban poor children to early childhood development, education, sports and cultural activities providing knowledge and life skill; (vi) protecting children from all forms of abuse, exploitation and violence; (vii) providing access to children particularly in urban and remote settings to clean water and sanitation, and a healthy environment; (viii) ensuring participation of children in defining their needs, developing programs, implementing interventions, and evaluating their success; (ix) ensuring support of duty bearer, parents and other care givers on whom children have to depend; and (x) ensuring widespread public support for survival and development of children.

Proposed Actions in the Sixth Plan

Intervention and actions for achieving the strategic objectives are indicated below:

  • Child health: The program areas include eradication of polio, elimination of measles and neonatal tetanus, improvement of nutrition and strengthening the school health program. The actions will include maximizing the efficiency and cost-effectiveness of health expenditure and improving governance. The specific activities will include sensitizing primary and secondary students about critical child health and reproductive health issues, healthy practices and worm infestation, and supplying iron and folic acid tablets for schoolgirls. Activities will be undertaken to develop an adolescent health strategy including counseling, building awareness for adolescents on hygienic practices, nutrition, puberty, RTI/STD and HIV/AIDS.

  • Food and nutrition: To control vitamin A deficiency and contain the prevalence of night blindness, vitamin A supplements will be distributed to children with vitamin A deficiency, measles, persistent diarrhea or severe malnutrition and to postpartum women within 6 weeks of delivery. Ongoing efforts to control iodine deficiency disorders through universal salt iodization will continue. To address the causes of anemia, strategies will be used to control anemia, including iron-foliate supplementation, anathematic treatment, fortification, and BCC to increase the consumption of iron-rich foods and promoters of iron absorption. A strategy will be developed to address the health care needs of children with physical and mental disabilities.

  • Child education: The intervention for early childhood development will include an awareness raising program for parents to make them aware of early childhood development’s benefits, promote community-based childcare centers for clusters of families where literate mothers are trained to become caregivers and design facilities for early learners. Efforts will be made to increase enrolment rate and decrease dropout rate, train primary teachers, increase the attendance rate, increase contact hours, and maintain gender parity in access and achievement. Non-formal education (NFE) will be provided to diverse types of children deprived of education, like un-enrolled or drop-out children and hard to reach children to enhance their employability and productivity through skill training.

  • Access to water and sanitation: The specific objectives are to: mitigate arsenic problem in drinking water by providing alternative systems, increase rural and urban slum access to sanitary latrines, expand water and sanitation services to cover currently underserved Pourashava areas, provide improved water supply to underserved, un-served and difficult to reach areas by 2011. The primary schools will be ensured access to sanitation and safe drinking water. Environmental hazards for children (sound, air, water pollution, etc) would be reduced and standards for sound, air and water pollution would be implemented.

  • Child empowerment: Children would be empowered to have a voice in the socioeconomic decision-making process in the family, society and national levels. In this respect, it would be necessary to create a national platform for allowing children to express opinions on their needs and expectations and means of addressing them.

  • Child protection: All children, particularly those who are vulnerable, would be ensured right to protection from abuse, exploitation and violence. The policies of existing NPA would be used against sexual abuse and exploitation of children and trafficking. Laws affecting children will be harmonized and enforced. Awareness amongst law enforcing officials and judicial officers and the development of a diversion scheme involving the courts, social workers and probation officers as an alternative to custodial sentences will be undertaken.

  • Birth registration: The Municipal Corporations and Pourashavas will be mobilized to register all births. Awareness raising programs through union Parishad members, and leaders of social opinion including Imams will be conducted to eliminate the practice of early marriage. A widespread social awareness campaign and community mobilization on protection issues will be undertaken to foster positive attitudes towards children, particularly girls, and bolster the positive attitude of parents and decision-makers on the need to protect children regardless of the socio-economic environment.

  • Child labor: Effective measures will be taken to reduce child labor, and eliminate worst forms of child labor with a particular focus on child domestic workers, migrants, refugees and other vulnerable groups. In this context, a policy for children in the formal sector focusing on those caught up in the worst forms of child labor will be formulated. Street children will be assisted in accessing their rights and protecting them from all forms of abuse and exploitation. Working children such as waste collectors, leather workers, brick breakers, auto-workshop workers and tempo helpers will have access to learning opportunities in formal and non-formal facilities.

  • Child abuse: To recover and remove children from abusive and exploitative circumstances, the interventions will include developing community support for these children; providing livelihood alternatives, basic services and adoption, and implementing policies and legislation necessary for the prevention of abuse, discrimination, exploitation and violence Steps will be taken to increase efficiency to combat sexual abuse, exploitation and trafficking of children through enhanced coordination and cooperation.

  • Management and coordination: The Ministry of Women and Children Affairs will conduct public advocacy and coordinate interventions for children’s well-being and rights. An inter-ministerial coordination committee consisting of government ministries with children’s portfolios and organizations representing children’s mandate will be chaired by the Secretary of the Ministry of Women and Children Affairs and will coordinate the implementation of CRC, CEDAW, and the World Fit for Children Plan of Action.

Ethnic Communities

Bangladesh has around forty-five different small ethnic communities comprising of 2 million people. Some of the ‘hardcore poor’ of Bangladesh are found among these communities.

The Vision: For the people belonging to these ethic groups, the vision is to ensure their social, political and economic rights; ensure security and fundamental human rights; and preserve their social and cultural identity. They will be ensured access to education, health care, food and nutrition, employment and protection of rights to land and other resources.

The crucial provisions of the CHT accord of 1997 have mostly been implemented. A separate Ministry of CHT Affairs has been created, a Land Commission Act passed by the Parliament, withdrawal of army camps has been started and the Land Commission constituted to resolve land disputes in the three hill districts. The District and Sessions Courts have started functioning in the three districts of CHT. The government programs have also incorporated the needs and concerns of the ethnic communities. The unimplemented provisions of the peace accord would be considered for implementation by the government. The Land Commission will be reconstituted and land survey carried out.

Areas of Future Action: The challenges with respect to addressing social and economic conditions of ethnic communities cover: (i) living in remote areas and far away from each other making it difficult to reach, mobilize and organize them, (ii) partial operationalization of the ‘Land Disputes Resolution Commission’ to prevent land grabbing and displacement of ethnic communities, (iii) lack of specific objectives concerning needs and concerns of ethnic communities in mainstream policies of respective ministries/divisions, (iv) absence of an alphabet and dearth of students hindering development of curriculum in languages of the ethnic communities at schools, (v) low food production resulting in food insecurity, (vi) inadequate institutional mechanism to establish linkage and coordination with NGOs and the private sector to address issues related to ethnic communities in a comprehensive manner, (vii) lack of comprehensive understanding of the problems of the indigenous communities, and (viii) absence of detailed information on ethnic population with ethnic disaggregation.

Major areas of interventions would include:

  • UN Declaration: The Government would consider implementing the UN Declaration on the Rights of Indigenous Peoples 2007 and ratify the ILO Convention 1969.

  • Rights on land: An appropriate land policy will be formulated which can deal with land disputes involving ethnic groups. A secure land tenure system will be introduced in Chittagong Hill Tract. Representatives of the ethnic groups will be included in undertaking development projects in their areas.

  • Empowering ethnic communities: The government will ensure participation of local governments in the management of natural resources and will recognize the traditional knowledge of the various ethnic peoples. The government will ensure community involvement in the adoption of technologies without competing with their traditional food production system.

  • Human development programs: Existing human development programs will address the special needs of the ethnic people. Monitoring and supervision will be strengthened so that education, health and maternal child health services, and nutrition and housing facilities reach the ethnic people.

  • Language and access to education: A national language policy will be formulated to safeguard the languages of ethnic peoples. An action plan on mainstreaming the education of ethnic children will be implemented.

  • Electrification and telecommunication: The national power grid and distribution system for electricity supply in different Upazilas of hill districts will be expanded. The government will consider the feasibility of raising electricity generation capacity of the Kaptai Hydroelectric Power Station and setting up a grid substation in the hill districts to meet the demand for electricity

  • Preferential access to social protection programs: Social protection assistance will be provided in hill districts to strengthen their capacities to cope with any sudden decrease of their income due to damage to Jhum crops caused by floods and droughts.

  • Rural development and non-farm economic activities: In the hill districts, income generating activities through small and cottage industries, trading, and poultry and livestock rearing will be expanded. The income of poor people will be enhanced through social forestry in hilly areas and cultivation of fruits and medicinal plants. Measures will be taken to support EPB’s ‘one district one product’ initiative under which ‘Textiles for Rangamati’, ‘Pineapples for Khagrachari’ and ‘Rubber for Bandarban’ have been finalized.

  • Expansion of micro credit: Micro credit activities for the poor people will be expanded and vocational training will be provided to the poor. The development of rural roads, hats, and bazaars for marketing of agricultural products will continue. Action will be taken to eliminate barriers so that agriculture and local products have easy access to national and international markets.

  • Development of tourism: Private investment will be encouraged to develop sustainable tourist facilities in Rangamati, Bandarban, and Khagrachari.

Persons with Disabilities

The Government envisions promoting and protecting rights of persons with disabilities and facilitate their full participation and inclusion in mainstream social, political and cultural lives. They will be enabled to lead productive and meaningful lives through access to education, health care, food and nutrition, employment and protection, and security in society. The Government is strongly committed to the advancement and rights of persons with disabilities by virtue of the Constitution which enshrines equal rights and status for every citizen and by signing the UN Convention on Rights of Persons with Disabilities and the Beijing Proclamation on the Full Participation and Equality with Disability in Asia and the Pacific Region.

A National Disability Action Plan has been formulated involving all related ministries. The Ministry of Social Welfare has taken up programs for enabling and integrating persons with disabilities with mainstream of society through various programs including stipend programs for students, subsistence allowance, skill training, and interest free micro credit. In addition to its own initiatives, the government provides funds to NGOs to provide education facilities to persons with mental disability.

Despite some progress, access to special education, training and rehabilitation, equal opportunities, creation of employment and income generating opportunities, social security, accessibility to physical facilities, fixation of quota, and prevention of disabilities are not yet fully ensured since different ministries are not legally responsible for addressing disability issues in their action plans. Proper supervision and monitoring of NGO activities is essential.

Proposed actions: Along with expansion of integrated education program for visually impaired children, existing institutions for hearing impaired and mentally retarded children will be expanded. New institutions will be established to provide access to more children with disabilities at primary, secondary and tertiary levels. A collaborative effort among the government, NGOs and the private sector will be encouraged to expedite the expansion of the existing institutions, establish new institutions, and undertake teachers’ training and action researches on disability.

Action will be taken in the health sector to (i) strengthen early detection of symptoms of disability and provide primary medical rehabilitation; (ii) undertake a nutrition program for pregnant women; (iii) appoint trainee doctors, nurses and other caregivers to deal with disability issues; and (iv) introduce support services of assistive devices and equipment at the health centers.

Measures will be taken so that persons with disabilities can have access to all physical facilities and information and communication. Inclusion of persons with disabilities in various national and community level decision making processes that affect their lives would be ensured. Services like early detection and timely medical intervention, fitment of artificial aids and appliances, educational services in special and integrated schools, vocational rehabilitation and micro credit will be provided to persons with disabilities through community based rehabilitation (CBR) program in the rural areas.

The requirements of the poor and vulnerable, including women and children, will be prioritized in all activities implemented under the action plan. The Climate Change Action Plan comprises immediate, short, medium and long-term programs.

The serious consequences of climate change, including especially the consequences for Bangladesh, lead naturally to the question of what should be our response. Two types of response need to be considered. The first relates to adaptation, i.e., measures that have to be taken given the very high likelihood that climate change will occur and will have adverse effects. The second relates to mitigation, i.e. steps to be taken that might reduce the extent of climate change.

The Bangladesh Disability Welfare Act would be amended to clarify definitions of disability and make it consistent with standards set out internationally on disability rights. The National Coordination Committee for persons with disabilities would be strengthened to monitor and coordinate activities of different ministries/divisions.

Disadvantaged and Extreme Poor Groups

There are some disadvantaged and stigmatized groups (such as dhopa, muchi, napit, Hijra/transsexuals and other traditional low caste people) who are subject to social injustice and are marginalized, and have little opportunities for overcoming their harsh realities. The vision for these disadvantaged and extreme poor groups is to include them into the mainstream of society by ensuring their participation in socioeconomic activities and to promote and protect their human rights, reduce their persistent poverty, and ensure education and skill training for income generating activities.

Several actions are already in progress for the development of the disadvantaged groups. Among the coastal fishing communities various activities such as savings/credit schemes, promotion of alternative income generating schemes for men and women, improving access to social services and building their capacity to face and survive natural disasters have been introduced. Development activities for the sweeper community have been undertaken by NGOs. The owners of tea gardens have entered into agreement with the trade union of tea garden workers to enhance their wages and provide subsidized food. Similarly, communities like kaibarta/namasudra, jalo (fishermen), dhopas, napits and other groups face decaying occupations. The Ministry of Social Welfare has implemented capacity and livelihood development program for socially disadvantaged women with a view to creating employment/self-employment of sex-workers and their children in selected cities.

Proposed actions: The cooperation and involvement of local bodies i.e. Upazila and Union Parishads and NGOs will help to locate/ identify the disadvantaged people to enable them to participate in development activities. Government functionaries at upazila, district, and divisional/national level will coordinate their activities. The Ministry of Land would give priority to allotting khas land to people of the disadvantaged communities for settlement under the Asrayan project. For the tea garden workers, planters/owners would be encouraged to earmark land within the estates so that they can build their own dwelling.

Development Resource Allocation for Social Protection During the Sixth Plan

The provision of social protection involves work of a large number of ministries including food, disaster management, rural development, social welfare and women’s affairs. Also a large part of the budget consists of subsidies and current transfers from the budget, where Ministry of Food and Disaster Management currently implements about 85% of all safety net programmes. In recent years the allocation of annual budget for social protection has exceeded 3 percent of GDP. The development budget allocations for ministries dealing with rural development and food and disaster management are shown in chapters 1 and 10 respectively. The development budget allocations for the ministries of Social Welfare, Women and Children Affairs and Youth and Sports are shown in Tables 9.11 and 9.12 in current and constant prices.

Table 9.11:

Development Resource Allocation for Social Protection under the Sixth Plan

(crore taka; current prices)

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Table 9.12:

Development Resource Allocation for Social Protection under the Sixth Plan

(crore taka; 2011 prices)

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Table 9.13:

Social Safety Net Programmes

(A.1) Cash Transfer (Allowances) Programmes & Other Activities:

(A.1.1) Social Protection

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Source: Ministry of Finance

Data for 2010 is not yet available

Bangladesh: Poverty Reduction Strategy Paper
Author: International Monetary Fund. Asia and Pacific Dept