Friday, October 9, 2009

Why create these myths about Bangladesh's economy?

. . . while in Bangladesh rising inequality tempered the
poverty reduction from growth
In Bangladesh per capita GDP grew at about 2 percent a year
during the 1990s, and poverty declined quite slowly. Between
1983 and 1996 the share of people in extreme poverty fell
from 40.9 percent to 35.6 percent—and the share in moderate
poverty from 58.5 percent to 53.1 percent. Rural
poverty in particular remains very high.
Why the slow decline? Part of the answer lies in rising
inequality, in both urban and rural sectors, especially between
1992 and 1996, when the Gini coefficient rose from
0.26 to 0.31. Depending on the poverty measure used, a fifth
to a third of the potential poverty reduction from growth may
have been lost because of higher inequality. If inequality
had not increased, the poverty rate would have been about
7–10 percentage points lower in 1995–96 than it actually was.

WDR 2000/2001 p 53

Bangladesh represents a success story among developing countries. Poverty incidence,
which was as high as 57 percent at the beginning of the 1990s, had declined to 49 percent in
2000. This trend accelerated subsequently, reducing the poverty headcount rate to 40 percent in
2005. The primary contributing factor was robust and stable economic growth along with no
worsening of inequality. Respectable GDP growth that started at the beginning of the 1990s
continued into the new millennium and averaged above 5 percent annually between 2000 and
2005. Inequality, as measured by the Gini coefficient of consumption, remained stable between
2000 and 2005.

Poverty Assessment for Bangladesh:
Creating Opportunities and Bridging the East-West Divide
Bangladesh Development Series
Paper No. 26

Why did the country paper (below) contradict the global report (above)? Why paint such a rosy scenario for Bangladesh? Why insist that income inequality did not increase at all over the entire period 1990 - 2005?

Was it for political reasons? To buttress our nonfunctioning democracy? To justify donor policies?

When you lie, at least try to be consistent.

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