Poverty in Bangladesh has declined recently due to strong economic growth, but the food price shock in the past year means it has not slowed as much as anticipated, a World Bank economist said. Economist Vinaya Swaroop told reporters Tuesday that food prices had risen so much in the past year they had slowed the rate of Bangladeshis escaping from poverty.
A recent report had predicted that strong GDP growth should have sent poverty down to 35 percent. "The net impact on poverty of the combined effects of economic growth and food price shock is likely to have been a decline...to 38 percent in 2008," Vinaya said.
The World Bank defines poverty as affecting a person who earns less than $1 a day. One of the main problems has been the price of rice, the staple food of Bangladesh, which rose almost 170 percent in the last quarter of 2007, Vinaya said. Xian Zhu, country director of the World Bank in Bangladesh, said the price of rice alone has eroded nearly one-fifth of the income of a poor household.
In the rural consumer price index (CPI) basket, the weight for food is 60.5 percent, and within the food basket, rice accounts for a 40 percent share. The numbers for the urban CPI are 44.5 and 25 percent respectively. "The overall food inflation in the country has been in double digits since the beginning of 2008, due mainly to rising rice prices," economist Vinaya said.
Xian said that every year the population grows by over 2 million while the availability of cultivable land decreases by 1 percent in Bangladesh. "Productivity can be increased by 30 to 60 percent by using hybrid seed, rationalising input utilisation, and improving other crop management practices," Xian said.