A Report Prepared for the Programme of Advisory and Support Services and DFID

1. APPENDIX E
Bangladesh Case Study

2. LINKAGE BETWEEN FISHERIES,
POVERTY AND GROWTH:
BANGLADESH CASE STUDY
Source: Internet
A Report Prepared for the Programme
of Advisory and Support Services and DFID
PASS Award of Contract: AG0213H
APRIL 2005
Final Version

3. STUDY TEAM
Dr. Md Ferdous Alam
11- D Green Austral Apt.
2 Outer Circular Road
Maghbazar, Dhaka – 1217
Bangladesh
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4. SUMMARY
The document
This is a Bangladesh case study investigating into the linkage between fisheries,
poverty and growth. It is prepared for IDDRA and is expected to serve as
background material for DFID’s initiative to increase the contribution of fisheries to
reducing poverty. It has examined current status and trend of the fishery system to
assist in developing an understanding of the key role fisheries has played in the past,
continues to play today and is likely to play in the future.
The method
This study has made use of the different published as well as unpublished literatures
namely: research reports, survey and consultancy reports; journal articles,
government documents and policy papers, economic surveys made by govt.
departments, reports on fisheries of the research institutes and consulting firms,
conference papers, documents of the World Bank, Asian Development Bank, and the
IMF. Two sector reviews namely, 1991 Fisheries Sector Review of the World Bank,
and 2002 Fisheries Sector Review and Future Development Study jointly conducted
by DFID, DANIDA, FAO and USAID had been of tremendous use. Information and
data published by the Bangladesh Bureau of Statistics and various Ministries such as
Ministry of Finance and Ministry of Planning were extensively used. Resources and
catch statistics of the Department of Fisheries were the basis of trend and growth
analysis. In addition, personal experience of the author and peer consultations helped
add many dimensions to the case study.
Background
Bangladesh appeared on the world map as an independent and sovereign state on 16
December 1971. The total area of the country is 147,570 square kilometer (56,977
sq. miles). Agriculture is the main occupation of the people employing 68.5% of the
labour force. It contributes around 23% to the GDP. The estimated population of
2004 is about 135.2 million. The population density is 916 per square kilometer in
2004. The literacy rate in 2002 was estimated to be 62.66%. According to the latest
census, about 77% of the total population lives in the rural areas and 23% lives in
major cities. The current GDP per capita and GNI per capita are US$ 421 and US$
444 respectively.
Service sector dominates the GDP of Bangladesh centering on 49% during the last 6-
7 years.
The contributions of agricultural and industrial sectors to GDP were 22.83% and
27.24% in 2002-03. The current shares of crop, fisheries, forestry and livestock
sectors to agricultural GDP are 56.95%, 22.69%, 8.54% and 11.82% in 2003-04. The
overall unemployment rate was estimated at 3.7% in LFS 1999. Unemployment rate
in the urban areas is higher as compared to that of the rural areas. The trade balance
has always been deficit during the last decade or so. Bangladesh is ranked 138th in
the Human Development Report 2004, with a recent most HDI value of 0.509.
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5. Poverty Situation
Poverty is measured in Bangladesh using two approaches; of which the first method
is based on Direct Caloric Intake (DCI). A household with a per capita caloric intake
of less than 1805 k.cal per day is considered “hard core poor”, while a household
with less than 2,122 k.cal per day per capita is considered as “absolute poor”. The
second method is the cost-of- basic needs (CBN) method. According to the latest
HIES 2000 report, 44.3 percent of the total population (55.9 million) was in absolute
poverty level on a DCI basis including 20.0% hard core poor. Based on the CBN
method, percentages of population under absolute and hardcore poverty in 2000 were
33.7% and 49.8% respectively. Interpreting in terms of CBN method, one out of
every two citizens is absolutely poor; and two out of three of the poor are hardcore
poor. The incidence of absolute poverty at national level has decreased to 33.7% in
2000 from that of 42.7% in 1991-92, according to the lower line of poverty. The
same trend also holds for the upper poverty line, which decreased to 49.8% in 2000
from 58.8 in 1991-92.
The incidence of poverty is the highest for households with agriculture, forestry and
fisheries as the main occupation. Income gap between the poorest of the poor
(bottom 5%) and richest of the rich (top 5%) is widening. During the last two
decades, the National Gini Coefficient shows increasing trend (from o.36 to 0.42).
The inequality is even more in the urban area.
Major factors behind poverty in Bangladesh were identified to be the gender of the
household head, the literacy level of the household head, skill level of the household
head, the religion of the household, the size and location of the household (i.e. rural
or urban), whether the household has electricity connection, whether the household is
the recipient of female stipend, land ownership and income from assets owned were
the asset and income variables.
The vision of Bangladesh’s poverty reduction strategy is to substantially reduce
poverty within next generation. For this, poverty reduction has been made the
overarching development goal and Bangladesh’s commitment is to achieve the
MDGs. Through adopting a comprehensive approach, the strategy visualizes that, by
the year 2015, Bangladesh would achieve: (i) reduce the number of people living
below the poverty line by 50%; (ii) attain universal primary education for all girls
and boys of primary school age; (iii) eliminate gender disparity in primary and
secondary education; (iv) reduce infant and under five mortality rates by 65%, and
eliminate gender disparity in child mortality; (v) reduce proportion of malnourished
children under five by 50% and eliminate gender disparity in child malnutrition; (vi)
reduce maternal mortality rate by 75%; and (vii) ensure availability of reproductive
health services to all women.
Economic growth
During the last 32 years (1972/73-2003/04) in the history of economic growth in
Bangladesh, three successive time phases of policy changes can be clearly identified.
Phase one starts from 1972/73 and goes up to 1977/78. These six years of post
independence period can be identified as the phase of intensive intervention. Phase
two goes from 1978/79 to 1989/90. Three development plans, namely the Two Year
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6. Plan (1978/79-1979/80), the Second Five Year Plan (1980/81-1984/85) and the Third
Five Year Plan (1985/86-1989/90) were implemented during this period. These 12
years can be identified as the initial phase of liberalization. Phase three starts from
1990/91 and goes up to 2003/04. During this phase the Fourth Five Year Plan
(1990/91-1994/95) and the Fifth Five Year Plan (1997/98-2001/02) were
implemented. These 15 years can be identified as a period of parliamentary
democracy and a period of economic reform.
The fisheries sector accounts for 5.15% of Bangladesh’s GDP in 2003-04. The GDP
growth rates fluctuated in the eighties and first half of the nineties. It was the second
half of the nineties and first 4 years of millennium which mark an average of more
than 5 percent per annum. The overall growth rate of agriculture sector in the
beginning of millennium year was very good, but it slowed down thereafter. Crops
and vegetables showed declining trend while livestock continued to increase.
Forestry sub-sector does not show any improvement keeping within roughly 4% per
annum. Growth of fisheries sub sector was very impressive in the 1998-99 and 1999-
00 ranging between 9 and 10 percent. The sub-sector thereafter had a negative
growth in 2000-01, mainly due to the September tragedy in 2001. Fisheries sector
started recovering again thereafter and showing increasing trend of growth.
Country’s fisheries export comprises frozen shrimp, frozen fish, dry fish, salted and
dehydrated fish, turtle/tortoise, shark fin, fish maws and frog leg (exported till 1991-
92). Frozen shrimp and frozen fish are the main fisheries exportable items accounting
for 79% and 19% respectively of the total quantity exported. Other items represent
only 2% of the total fisheries quantities. This is 2nd important foreign exchange
earner after ready made garments.
During last two decades aquaculture contributed significantly to the fisheries sector.
BFRI has played a very big role in this direction by developing 24 different fish
culture technologies. The most important technology accepted widely for fish culture
is carp polyculture, Pangas monoculture, shrimp and giant freshwater prawn culture
and Genetically Improved Farmed Tiapia (GIFT) culture. Most of these are
practiced in ponds. Over the last two decades productivity of ponds, baors and
shrimp farms increased by 309%, 443% and 246% respectively. Development and
growth of aquaculture is attributed to a variety of factors. Use of supplementary feed,
wider supply of fingerlings and aquaculture extension effort of the DoF, BFRI, BAU,
NGOs, projects of WorldFish. Center and MAEP of DANIDA were notable. Number
of hatcheries and their capacities of producing hatchlings increased markedly during
the last decades.
Fisheries Development and Management
Fishery resources in Bangladesh are mainly owned and managed by the public
sector. Formal responsibilities for the sector are vested in the Ministry of Fisheries
and Livestock (MoFL) and are executed through the Department of Fisheries (DoF).
National fisheries management, development, extension, training, conservation,
quality control, law enforcement, policy advice, and information collection are the
responsibilities of the DoF. Bangladesh Fisheries Development Corporation (BFDC)
is another related autonomous organization responsible for national development of
marine fisheries, management of Kaptai Lake, and marketing and processing of fish.
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7. Bangladesh Fisheries Research Institute (BFRI) is a vital organization in fisheries
having responsibility of national fisheries research on riverine fisheries, marine
fisheries and aquaculture.
Bangladesh fisheries are broadly classified into two categories, namely, (i) inland
freshwater fisheries and (ii) Marine fisheries. Inland freshwater fisheries comprise
Openwater capture fisheries and closed water culture fisheries. The country has a
total fish production of 2.102 million tons during the 2003-04 comprising 34.83%
from inland open waters (capture), 43.52% from inland closed waters (culture), and
21.66% from marine waters. The value of fish produced in 2003-04 is to the tune of
TK. 126,122 million to TK. 147,143 million. There are about a total of 795 species
of fish and shrimp available in Bangladesh waters comprising 284 freshwater fish
species (including freshwater prawn) and 511 marine species.
Full time equivalent of 5.2 million people or 9% of the labour force were involved in
fisheries. Total value additions was estimated at Tk. 93,688 million comprising Tk
26,937 million (29%) from inland capture fisheries, Tk. 28,577 million (30%) from
marine fisheries sub-sector, and Tk. 38,174 (41%) from inland and coastal
aquaculture. The post harvest activities also generate a value added of Tk.38,356
million. Export quantity has increased from 23,048 metric ton in 1985-86 to 54,141
metric tons in 2003-04 while its value has increased from Taka 356.25 million to
Taka 2363.47 million. Shrimp accounts for 79% of fish and fisheries product export
in 2003-04.
To increase fish production important strategies and intervention were: i) stock
enhancement using carp fingerlings in lakes and floodplains, ii) alternative measures
to restore and conserve natural fish populations, and iii) community-based
approaches to management of inland fisheries. Fisheries is governed by four sets of
laws and regulations. There is adequate number of regulations, laws and rules to
protect and conserve the fisheries in Bangladesh. It is believed that no new laws or
regulations are needed until the existing laws are effectively enforced.
Fisheries statistics produced by the DoF has a number of problems. Production data
appears to be upwards biased. Area statistics are very old and productivities so
calculated are not free from flaws. Source to source variations exist which leads to
problem for the users. Consumption statistics vary widely across sources.
Information must pass through the executives. A lot of things are considered before
releasing information. Moreover, capacity limitation of the departments constrain the
generation of good data. All these limitations raise question about the reliability of
generated data.
Policy Making
Fisheries were not looked upon as an important source of revenue by the indigenous
rulers and it was ranked fourth after agricultural land, forestry and mineral resources.
It was customary to allow open access to all the floodplains as long as no boundaries
or other means of establishing ownership. The closed fisheries were under nominal
control of the zamindars. These pre-colonial zamindars were primarily collectors of
revenue and did not have proprietary rights on all lands under their jurisdiction. The
Permanent Settlement Regulations was promulgated in 1793 which finally accepted
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8. the principle of revenue collection through appointed agents. The British rulers got
dismayed at the fixed system of rent when the need for revenue generation had
increased manifold. The government of Bengal appointed a Land Revenue
Commission in 1938 under the chairmanship of Sir Francis Floud to examine all
relevant issues and make suitable recommendations. The Commission submitted its
report in 1940 and majority of the members recommended the abolition of the
zamindary system and assumption of all rent-receiving interests by the state.
The government of East Pakistan accepted the Floud Commission Report and
through the passage of Ease Bengal State Acquisition and Tenancy Act (EBSATA)
1950 abolished the zamindary system in Bangladesh. Under the provisions of the
Act, ownership and management of all Jalmahals were vested in the Government.
The MoL, through a high powered Board of revenue, was put in charge of
management of these newly acquired assets.
In the 1950s, the government did not have many sources of revenue to lay its hand
on. The clear mandate to the MoL, like the immediate past British rulers, was to
maximize revenue from this source.
With the independence of Bangladesh in 1971, the access problem to fisheries started
to assume new dimensions. With rising population and pervasive incidence of
poverty in the early years of independent Bangladesh, large number of rural people
flocked into inland fisheries for their livelihood. In 1974, govt. decided to restrict the
auction of Jalmahals to the registered fishermen’s cooperatives only during the first
round. To wards the end of 1970s, the undesirable effects of the dichotomy between
ownership of resource by one entity and responsibility of preservation and biological
management by another had become so obvious in the inland fisheries sub sectors
that the govt. had to take some remedial action. In 1980, the concern for conservation
of fish resources had convinced the highest political level to order a wholesale
transfer of all Jalmahals from the MoL to the MoFL to facilitate the process of
biological management of the fish resources. Within three years in 1983, government
again reversed its earlier order and transferred the Jalmahals back to the MoL. A
New Fisheries Management Policy (NFMP) was adopted in 1985. The policy aimed
at achieving the twin objectives of stopping exploitation of the fishers by ijarders
through new management practices and of ensuring proper conservation of the fish
resources. Since the NFMP was developed by people connected with fisheries and
not MoL, it contained huge improvements in certain areas compared to the previous
policies.
In 1991, there was a further change in the leasing procedure for the Jalmahals
retained by the MoL under its control. Public auctioning was replaced by a system of
sealed tenders restricted to fishermen’s cooperatives. In 1995, Government made an
abrupt decision to abolish the leasing of the open Jalmahals. The Prime Minister,
while inaugurating Fisheries Fortnight in 1995, made this sudden announcement,
thus technically rendering the NFMP licensing system defunct.
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9. ACRONYMS AND ABBREVIATIONS
ADB Asian Development Bank
ADP Annual Development Plan
AL Awami League (political party currently in opposition)
BBS Bangladesh Bureau of Statistics
BCAS Bangladesh Center for Advanced Studies
BELA Bangladesh Environment Lawyers Association
BIAM Bangladesh Institute of Administration and Management
BFDC Bangladesh Fisheries Development Corporation
BFRI Bangladesh Fisheries Research Institute
BIDS Bangladesh Institute of Development Studies
BKB Bangladesh Krishi Bank
BNP Bangladesh Nationalist Party (political party currently in government)
BRAC Bangladesh Rural Advancement Committee
BWDB Bangladesh Water Development Board
CBN Cost of Basic Needs
CBFM Community Based Fisheries Management
CIDA Canadian International Development Agency
CMR Child Mortality Rate
CNRS Center for Natural Resources Studies
CPI Consumer Price Index
CRED Center for Rural Environment Development
DANIDA Danish International Development Assistance
DCI Direct Calorie Intake
DFID Department for International Development
DFO District Fisheries Officer
DoF Department of Fisheries
DoMF Department of Marine Fisheries
EBSATA East Bengal State Acquisition and Tenancy Act
EEZ Exclusive Economic Zone
ESBN Estuarine Set Bag Net
FEI Food Energy Intake
FFP Fourth Fisheries Project
FAO Food and Agriculture Organizations
FCD Flood Control and Drainage
FCDI Flood Control Drainage and Irrigation
FSRFDS Fisheries Sector Review and Future Development Study
FY Financial Year
FRG Federal Republic of Germany
GDP Gross Domestic Product
GNI Gross national Income
GHARONI Grassroots Health and Rural Organisation for Nutrition Initiative
GEF Global Environment Faciity
GoB Government of Bangladesh
GPRB Government of the People’s Republic of Bangladesh
HDI Human Development Index
HES Household Expenditure Survey
HIES Household Income Expenditure Survey
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10. HP Horse Power
ICLARM International Center for Living Aquatic Resources Management
IDA International Development Agency
IFAD International Fund for Agricultural Development
I-PRSP Interim Poverty Reduction Strategy Paper
IMF International Monetary Fund
IMR Infant Mortality Rate
IUCN International Union of for Conservation of Nature
JMS Jatiyo Matshajibee Samitee
LFS Labour Force Survey
LGED Local Government Engineering Department
MAEP Mymensingh Aquaculture Extension Project
MDG Millennium Development Goals
MoA Ministry of Agriculture
MoF Ministry of Finance
MoP Ministry of Planning
MoL Ministry of Land
MoY Ministry of Youth
MACH Management of Aquatic Resources through Community Husbandry
MoFE Ministry of Forest and Environment
MSY Maximum Sustainable Yield
MoFL Ministry of Fisheries and Livestock
NFP National Fisheries Policy
NFMP New Fisheries Management Policy
NGO Non-government Organization
NSAPR National Strategy for Accelerated Poverty Reduction
OLP Ox-bow Lakes Project
PAPR Partnership Agreements on Poverty Reduction
PRSP Poverty Reduction Strategy Paper
SADP Second Aquaculture Development Project
SDC Society Development Committee
SHISUK Shikkah Sastho Unnayan Kendra
SUFO Senior Upazilla Fisheries Officer
TFP Third Fisheries Project
TFR Total Fertility Rate
UNDP United Nations Development Programme
USAID United States Agency for International Development
UNDP United Nations Development Programme
UFO Upazilla Fisheries Officer
U5MR Under 5 Mortaity Rate
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11. GLOSSARY OF TERMS
Zilla Sub-regional administrative unit (District)
Jatiya Sangsad National Assembly
Aman A paddy crop grown in monsoon
Aus A paddy crop grown in monsoon
Boro A paddy crop grown in dry season
Baor Ox-bow lake; a closed body of water isolated from river by a
change in its course
Beel Small lake, low lying depression, a permanent body of water
in a floodplain or a body of water created by rains or floods
that may or may not dry up in the dry season
Floodplain The adjacent wetland around the natural depression i.e, beel,
haor etc. which are largely being inundated by flood water
during monsoon
Fry Very young stage of fish formed from egg
Haor A shallow lake or large low-lying depression in a floodplain
that may be reduced to a series of beels during the dry season
Jalmahal Fishery (waterbody) leased out by the government for revenue
Jatka Juvenile hilsha
Zaminder A landlord with whom land have been settled in perpetuity by
the sovereign authority in lieu of fixed rent
Diwani Right to collect revenue
Jotdar A landed gentry
Ijardar Leaseholder
Mahajan Financier or money lenders
Taka Bangladesh currency (US$1=Taka 63approximately in April
2005)
Upazilla A level of administrative unit lower than district
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12. CONTENTS
SUMMARY...........................................................................................................................................................2
ACRONYMS AND ABBREVIATIONS ...............................................................................................................7
GLOSSARY OF TERMS .......................................................................................................................................9
I. BACKGROUND........................................................................................................................14
1.1 INTRODUCTION ...................................................................................................................14
1.2 NATURE OF GOVERNMENT .................................................................................................14
1.3 COUNTRY PROFILE .............................................................................................................14
1.4 NATIONAL POLICY PRIORITIES ...........................................................................................15
1.5 INDICATORS OF NATIONAL CHARACTERISTICS AND DEVELOPMENT STATUS .....................16
1.5.1 Population.....................................................................................................................16
1.5.2 Political.........................................................................................................................17
1.5.3 Social ............................................................................................................................18
1.6 POVERTY SITUATION ..........................................................................................................19
1.7 SECTORAL GDP TREND .....................................................................................................19
1.8 UNEMPLOYMENT ................................................................................................................20
1.9 BALANCE OF PAYMENT ......................................................................................................21
1.10 HUMAN DEVELOPMENT INDEX ...........................................................................................21
II. POVERTY SITUATION IN BANGLADESH........................................................................22
2.1 INTRODUCTION ...................................................................................................................22
2.2 POVERTY DIMENSIONS AND MEASUREMENT .......................................................................22
2.3 EXTENT OF POVERTY AND ITS TREND .................................................................................22
2.4 DIFFERENCES IN POVERTY ESTIMATES ................................................................................24
2.5 REGIONAL INCIDENCE OF POVERTY ....................................................................................24
2.6 INCIDENCE OF POVERTY BY MAIN OCCUPATION OF HOUSEHOLD HEAD ............................25
2.7 INCOME AND ITS INEQUALITIES AMONG THE HOUSEHOLDS .................................................25
2.8 PER CAPITA CALORIE INTAKES ..........................................................................................28
2.9 DETERMINANTS OF POVERTY..............................................................................................28
2.10 BANGLADESH’S POVERTY TARGETS AND SOCIAL DEVELOPMENT GOALS ..........................29
III. ECONOMIC GROWTH OF BANGLADESH ..................................................................31
3.1 INTRODUCTION ...................................................................................................................31
3.2 TIME PHASES OF ECONOMIC GROWTH OF BANGLADESH ....................................................31
3.3 AGGREGATE GROWTH STRUCTURE OF THE BANGLADESH ECONOMY ................................32
3.4 DISAGGREGATED GROWTH OF DIFFERENT SECTORS IN BANGLADESH ...............................33
3.5 CONTRIBUTION OF FISHERIES SECTOR IN THE ECONOMIC GROWTH OF BANGLADESH .......35
3.6 POTENTIAL FOR ACHIEVING MDGS IN BANGLADESH ........................................................36
IV. FISHERIES DEVELOPMENT AND MANAGEMENT IN BANGLADESH ................37
4.1 INTRODUCTION ...................................................................................................................37
4.2 FISHERIES INSTITUTIONS AND GOVERNANCE: ....................................................................37
4.3 FISHERIES RESOURCES AND FISH PRODUCTION ...................................................................37
4.3.1 Inland Openwater Capture Fisheries............................................................................38
4.3.2 Marine Fisheries ...........................................................................................................38
4.3.3 Inland Closed Water Fisheries (Aquaculture) ..............................................................39
4.3.4 Value of Produced Fish ................................................................................................39
4.4 FISH PRODUCTION TREND ..................................................................................................40
4.5 SPECIES ABUNDANCE AND COMPOSITION ..........................................................................41
4.6 CONTRIBUTION OF FISHERIES SECTOR: ...............................................................................42
4.6.1 Share in Gross Domestic Product.................................................................................42
4.6.2 Employment ..................................................................................................................43
4.6.3 Food security ................................................................................................................44
4.6.4 Value added of Fisheries...............................................................................................44
4.6.5 Fisheries Export............................................................................................................44
4.6.6 Women involvement in fisheries....................................................................................45
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13. 4.7 WAGES ...............................................................................................................................46
4.8 FISHERIES INTERVENTIONS FOR FISH PRODUCTION .............................................................46
4.8.1 The stocking programme...............................................................................................47
4.8.2 The Second Aquaculture Development Project.............................................................48
4.8.3 Third Fisheries Project (TFP) ......................................................................................48
4.8.4 Aquaculture Development Project (ADP).....................................................................48
4.8.5 Community Based Fisheries Management Project (CBFM).........................................48
4.8.6 Fourth Fisheries Project (FFP) ....................................................................................49
4.9 FISHERIES LAWS AND REGULATIONS..................................................................................50
4.10 STUDIES ON RESOURCES RENT: ..........................................................................................50
4.11 RELIABILITY OF FISHERIES STATISTICS ..............................................................................51
V. POLICY MAKING ...................................................................................................................52
5.1 INTRODUCTION ...................................................................................................................52
5.2 FISHERIES MANAGEMENT AND POLICY PROCESSES ...........................................................52
5.2.1 Before partition of Bengal.............................................................................................52
5.2.2 Partition to Independence.............................................................................................53
5.2.3 Access issue after independence of Bangladesh ...........................................................54
5.2.4 Leasing policy in the early years ..................................................................................54
5.2.5 Policy Shifts between 1980 and 1984............................................................................54
5.2.6 Transfer of Jalmahals from MoL to MoFL ...................................................................55
5.2.7 New Fisheries Management Policy...............................................................................55
5.2.8 Further Changes in Leasing System .............................................................................55
5.2.9 Open Access of Open Waterbodies ...............................................................................56
5.3 MARINE FISHERIES MANAGEMENT EFFORT .......................................................................56
5.4 CONFLICT BETWEEN FISHERIES POLICY AND SUPPORT SERVICES ......................................56
5.5 THE BANGLADESH POVERTY REDUCTION STRATEGY ........................................................59
5.5.1 Concept of Pro-poor Growth Strategy for Poverty Reduction......................................60
5.5.2 Outlining the poverty reduction strategy ......................................................................60
5.5.3 The National Strategy for Accelerated Poverty Reduction (NSAPR) for fisheries........61
5.6 THE DIFFERENT STAKEHOLDERS AND THEIR ROLES IN FISHERIES......................................62
REFERENCES .....................................................................................................................................................65
APPENDIX-A ......................................................................................................................................................70
APPENDIX-B.......................................................................................................................................................74
APPENDIX-C.......................................................................................................................................................76
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14. LIST OF TABLES
TABLE 1.1 PER CAPITA GDP AND GNP OVER TIME ............................................................................................18
TABLE 2.1 INCIDENCE OF POVERTY (HEAD COUNT RATIO) BY DCI METHOD ...................................................23
TABLE 2.2 INCIDENCE OF POVERTY (HEAD COUNT RATIO) BY CBN METHOD ..................................................23
TABLE 2.3 POVERTY GAP AND SQUIRED POVERTY GAP OF CBN METHOD ........................................................24
TABLE 2.4 COMPARATIVE STATEMENT SHOWING HEAD COUNT INDEX BY DIFFERENT METHODS ........................24
TABLE 2.5 INCIDENCE OF POVERTY (HEAD COUNT RATIO) BY REGIONS ...........................................................25
TABLE 2.6 INCIDENCE OF POVERTY ACCORDING TO MAIN OCCUPATION OF HOUSEHOLD HEAD ........................25
TABLE 2.7 HOUSEHOLD INCOME, INCOME PER MEMBER AND EARNER ...............................................................26
TABLE 2.8 PERCENTAGE SHARE OF INCOME OF HOUSEHOLDS BY DECILE GROUP .............................................26
TABLE 2.9 PERCENTAGE SHARE OF INCOME OF HOUSEHOLD BY SOURCES OF INCOME ......................................27
TABLE 2.10 PER CAPITA DAILY CALORIE INTAKE BY FOOD ITEMS ......................................................................28
TABLE 3.1 STRUCTURAL CHANGE AND TREND OF GROWTH OF THE CONTRIBUTIONS OF LARGE .......................32
SECTORS TO GDP OF BANGLADESH (CONSTANT PRICE, BASE YEAR: 1995/96)
TABLE 4.1 AREA, CATCH AND PRODUCTIVITY BY SECTORS OF FISHERIES, 2003-04 ...........................................38
TABLE 4.2 VALUE OF FISH PRODUCED IN 2003-04 UNDER TWO PRICE SCENARIOS ..............................................40
TABLE 4.3 EXPONENTIAL GROWTH RATES OF FISH PRODUCTION FROM DIFFERENT FISHERIES............................41
TABLE 4.4 PERCENTAGE COMPOSITION OF DIFFERENT SPECIES OF INLAND AND MARINE FISHERIES ....................42
TABLE 4.5 EMPLOYMENT STATUS IN INLAND AND MARINE FISHERIES .................................................................43
TABLE 4.6 VALUE ADDED OF FISHERIES RESOURCES AT CURRENT PRICES ...........................................................44
TABLE 4.7 TREND OF EXPORT OF FISH AND FISH RELATED PRODUCT, BANGLADESH ............................................45
TABLE 4.8 WAGE RATE INDICES BY SECTORS (BASE 1969-70 = 100)..................................................................46
TABLE 5.1 RESOURCE ASSESSMENT ENDEAVOUR IN THE BAY OF BENGAL .........................................................57
TABLE 5.2 TARGETS AND ACHIEVEMENTS OF FISHERIES PRODUCTION AND FISHERIES BUDGET ........................58
TABLE 5.3 POLICY MATRIX FOR THE FISHERIES SECTOR AS OUTLINED IN THE PRSP..........................................64
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15. LIST OF FIGURES
Figure 1.1 Growth Rates of Population over Decades in Bangladesh……………………....…15
Figure 1.2 Map of Bangladesh……………………...………………………………………..16
Figure 1.3 Inequalities in Income over Years in Bangladesh……………..…...………….….17
Figure 1.4. Trend of Crop, Forestry, Livestock and Fishery Share to Agricultural GDP.......19
Figure 1.5 Trend in Unemployment Rate in Bangladesh……………………..…….………19
Figure 2.1 Inequality of Income over years in Bangladesh…………………………..……...26
Figure 3.1 Growth trends of different sub-sectors of Bangladeshi economy……….…..…...34
Figure 4.1 Trend of Fish Production in Bangladesh………………………..….………….....40
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16. 1 BACKGROUND
1.1 Introduction
The territory constituting Bangladesh was under the Muslim rule for over five and a
half centuries, from 1201 to 1757 A.D. Subsequently, it was under the subjugation of
the British after the defeat of the last sovereign ruler, Nawab Sirajuddowla, at the
Battle Plassey on the fateful day of June 23, 1757. The British ruled over the entire
Indian sub-continent including this territory for nearly 190 years; from 1757 to 1947.
During that period Bangladesh was a part of the British Indian provinces of Bengal
and Assam. With the termination of the British rule in August, 1947 the sub-
continent was partitioned into India and Pakistan. Bangladesh was then a part of
Pakistan and was known as East Pakistan. It remained so about 24 years from August
14, 1947 to March 25, 1971. It appeared on the world map as an independent and
sovereign state on December 16, 1971 (BBS, 2004).
1.2 Nature of Government
A four-party alliance comprising of Bangladesh Nationalist Party (BNP), Jamat-E-
Islam, the Jatiya Party and Islami Oikkojot; have formed the government of
Bangladesh since June 2001. The major opposition party is the Awami League (AL).
Bangladesh is governed by a Parliamentary form of government. The Prime-Minister
is the chief executive of the country. S/he is selected by the president from the
majority party leader. S/he has a council of ministers who assist him/her in the
discharge of his/her duties. For the convenience of administration the country is
divided into six administrative divisions, each placed under a Divisional
Commissioner. Each division is further sub-divided into zillas (districts). After the
administrative re-organization carried out in 1984, the country has been divided into
64 zillas. The administration of each zilla is headed by a Deputy Commissioner, who
is assisted by other officials.
The highest judiciary in the country is the Supreme Court headed by the Chief
Justice. The constitution provides for a unicameral legislature, which is called Jatiya
Sangsad (National Assembly). It consists of 300 members directly elected by adult
franchise. The members of Jatiya Sangsad elect another 30 female members. Thus,
the total number of members of the Jatiya Sangsad is 330 (BBS, 2001a).
1.3 Country Profile
Bangladesh is a developing country located in the north eastern part of South Asia
between 200 34 and 260 38 north latitude and between 880 01 and 920 41 east
latitude. It is bounded by India in the north and west; by the Bay of Bengal in the
south, and finally by part of India and Myanmar in the eastern side. The total area of
the country is 147,570 square kilometer (56,977 sq. miles). The limits of territorial
waters of Bangladesh are12 nautical miles and the area of the high sea extending to
200 nautical miles measured from the base lines constitute the economic zone of the
country.
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17. A wide portion of the land is covered by large rivers such as the Padma, the Jamuna,
the Teesta, the Meghna, the Brahmaputra, and the Surma. There are also thousands
of tributaries with a total length of about 24,140 km. Those rivers are connected to
the Bay of Bengal. The total forest area is about 13.36% of the land area. The
climatic condition is of sub-tropical monsoon climate (BBS, 2001a).
Agriculture is the main occupation of the people employing 68.5% of the labour
force. It contributes around 23% to the GDP. Except for the hilly regions in the
north-east and the south-east, some areas of high lands in the north and north western
part; the country consists of low, flat and fertile land. Rice, wheat, sugarcane,
tobacco, oilseeds, pulses and potatoes are the principal crops. Cultivated areas per
farm and per capita area are 1.50 acres (0.60 ha) and 0.14 acres (0.05 ha)
respectively. Gross cropped area is 28,616 thousand acres (11,585 thousand ha),
which comprises 36.86% of aman rice, 14.5% of aus rice, 21.45% of boro rice;
4.56% of jute, 1.15% of sugarcane and 5.32% of wheat. Cropping intensity is 174%
and about half of the cultivated area is irrigated (BBS, 2005).
1.4 National Policy Priorities
Since independence, Bangladesh is guided generally by Five Year Plans (FYPs).
Every plan, five yearly or otherwise, of the government has aimed at reducing
widespread poverty. Achieving equitable economic growth for poverty alleviation is
generally accepted to be the overriding goal of the government’s developmental
efforts in Bangladesh (Mahmud, 2002).
With the constitutional obligation of developing and sustaining a society in which
the basic needs of all people are met and every person can prosper in freedom and
cherish the ideals and values of a free society, the vision of Bangladesh’s poverty
reduction strategy is to substantially reduce poverty within the next generation. For
this, poverty reduction has been made the overarching development goal and
Bangladesh’s commitment is to achieve the Millennium Development Goals (MDGs)
and targets set in the Partnership Agreements on Poverty Reduction (PAPR) with the
Asian Development Bank (ADB). Through adopting a comprehensive approach, the
strategy visualizes that Bangladesh would achieve the following targets by the year
2015 (MoF, 2002):
(i) Reduce the number of people living below the poverty line by 50%;
(ii) Attain universal primary education for all girls and boys of primary
school age;
(iii) Eliminate gender disparity in primary and secondary education;
(iv) Reduce infant and under five mortality rates by 65%, and eliminate
gender disparity in child mortality;
(v) Reduce proportion of malnourished children under five by 50% and
eliminate gender disparity in child malnutrition;
(vi) Reduce maternal mortality rate by 75%; and
(vii) Ensure availability of reproductive health services to all women
E-15

18. 1.5 Indicators of National Characteristics and Development Status
1.5.1 Population
The estimated population of 2004 is about 135.2 million and according to the census
carried out in 2001, the population was 130.03 million. The growth rate of
population in 1981 was 2.31%, which decreased gradually to 2.04% in 1991, 1.41%
in 2001; but subsequently increased to 1.5% in 2004 (MoF, 2004). This upward
tendency of growth is mainly due to the reduction of government’s support for
family planning initiatives (Table A.1.1, Appendix-A; also shown in Figure-1.1).
2.40%
2.20%
Growth Rate (%)
2.00%
1.80%
1.60%
1.40%
1.20%
1.00%
1981 1991 2001 2004
Year
Figure 1.1 Growth Rates of Population over Decades in Bangladesh
The population density is 916 per square kilometer in 2004. This is an extremely
high density and so Bangladesh faces many constraints in developing the standard of
living of her population. The male-female ratio, as per the 2001 census is 106 (BBS,
2005). Of the total labor force 62.30% are farmers, 30.10% are miscellaneous
laborers and only 7.5% constitutes the industrial laborers (manufacturing, electricity,
gas). The literacy rate in 2002 was estimated to be 62.66% (MoF, 2004).
Dhaka is the capital, and the largest metropolitan cities of the country. Chittagong,
the port city, is the second largest metropolis. Khulna, Rajshahi, Barisal and Sylhet
are other major towns. According to the latest census, about 77% of the total
population lives in the rural areas and 23% lives in major cities. The coastal areas of
Bangladesh include Chittagong, Cox’s Bazar, Feni, Lakhshipur, Noakhali, Borguna,
Bhola, Barisal, Jhalokati, Patuakhali, Pirojpur, Bagerhat, Satkhira, Khulna (Figure
1.2); and the percentage of population in these areas constitute 22.2% with a
population density of 699 per square kilometer (Table A.1.2, Appendix-A). For non-
coastal areas, the percentage of population is 77.8% and the population density is 890
per square kilometer. Therefore, concentration of population is predominantly seen
near the non-costal areas than the coastal areas.
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19. Bay of Bengal
Figure 1.2 Map of Bangladesh
1.5.2 Political
The political environment of the country is extremely unstable. ADP-GOB (2004)
mentioned……. “The economy of Bangladesh is one of the most vulnerable
economies in the world which is characterized by an extremely high population
density, low resource base high incidence of natural disasters, and persistent political
instability during most of the period after Independence”. Chowdhury (2002)
remarked “…..social instability caused by corruptions, cheating, extortion of money,
robbery, abduction, eviction, violence at meetings, processions, hartals etc. and other
E-17

20. organized crimes form an important component of daily news of the local dailies in
recent years. These untoward events have spread to such a scale that Bangladesh hits
newspaper headlines recently by being one of the most corrupt and crime hit
countries of the world. The most worrying aspect of these phenomena is that these
menaces have been on the rise without any sign of being abated. This has cast a
shadow of gloom in the society” He further mentioned that about 2.0 to 3.0 percent
GDP growth rate per annum is reportedly sacrificed at the altar of corruption alone.
1.5.3 Social
Socio-economic
If looked at from a socio-economic context, both the GDP per capita and GNI per
capita have increased over time to US$ 421 and US$ 444 respectively (MoF, 2004;
BBS, 2005). The increase in GNI from the previous year was significant (Table 1.1).
Table 1.1 Per capita GDP and GNP over time
Per Capita 1997-98 1999-2000 2001-2002 2002-2003 2003-2004
(US$) (US$) (US$) (US$) (US$)
GDP 354 368 361 389 421
GNI 365 381 378 411 444
Sources: MoF (2004): Bangladesh Economic Survey 2004 for figures of 2004
BBS (2005): Statistical Pocketbook Bangladesh 2003 for all other figures
However, the income distribution is very unfair. The gap in income between the
poorest of the poor (bottom 5%) and richest of the rich (top 5%) is widening. In
1995-96 the income of the top 5% of the household was 23.6%, which was about 27
times the income accrued to the lowest 5% households, who shared only 0.67% of
the income. On the contrary, in 2000, income share of the top 5% of the households
has increased to 30.7%, which was about 46 times of the income accruing to the
lowest 5% of the household (BBS, 2003). The Gini coefficients show increasing
trend during the last two decades indicating the widening of income gap. Urban
income inequality is higher than the rural areas (Figure 1.3).
0.47
0.46
0.45
0.44 National Gini Coefficient
0.43 Rural Gini Coefficient
Gini coefficient
0.42 Urban Gini Coefficient
0.41
0.4
0.39
0.38
0.37
0.36
0.35
0.34
0.33
0.32
1983-84 1985-86 1988-89 1991-92 1995-96 2000
Years
Figure 1.3 Inequalities in Income over Years in Bangladesh
E-18

21. Education
To be in line with the MDG, government aims at ensuring primary education for all
by 2015. The total government expenditure on education has been on the increase
from the previous year. Per capita total public expenditure on education has also
been on the increase. The adult literacy rate of population above 15 years for both
sexes is 51% and the trend is on the increase. Net primary enrolment as well as
women’s economic participation has gone up significantly; and gender parity has
been achieved in primary and secondary education (Planning Commission, 2004).
Health
The average life expectancy is 68.3 years (72.8 years in urban areas and 66.7 years in
rural areas) in 2001 showing an increasing trend from 56.3 years in 1992. The IMR
(infant mortality rate) is 56 in every thousand children born. The crude birth rate and
death rates are 19 and 5 respectively. All these demonstrate improvement over time.
Patient per bed in the government hospitals in 2003 was estimated at 4109, and
number of person per registered doctor was 3866. Ninety seven percent take fresh
drinking water; and 41.22% use proper sanitary latrines. Per capita government
expenditures on health and family planning have been on the increase: from Taka
151 in 1999 to Taka 182 in 2002 (BBS, 2005).
1.6 Poverty Situation
Bangladesh is one of the poorest countries of the world. One out of every two of its
citizens is absolutely poor on the basis of cost-of-basic needs (CBN); and two out of
three of the poor are hard core poor (Ahmed et al. 2002). In 2000, percentages of
population living below absolute poverty line (2122 k. cal/day/person) and hard core
poverty line (1805 k. cal/day/person) were 33.7 and 49.8 respectively (Head count
ratio, CBN method (BBS, 1998; and BBS, 2001b).
1.7 Sectoral GDP Trend
There are three broad sectors of economy in Bangladesh: agriculture, industry and
services. Service sector dominates the GDP of Bangladesh; it centers on 49% during
the last 6-7 years. The contribution of agricultural sector to GDP was 22.83% in
2003-04, registering a decline from 25.87% in 1996-97. Share of industry has gone
up from 24.87% in 1995-96 to 27.24% in 2002-03 (Table A.1.3, Appendix-A).
During the last three decades contribution of crop sector has been on the decline. The
share of crop sector to agricultural GDP was the highest (85.70%) in 1974-75, which
has fallen to 73.36% in 1979-80, 60.31 in 1995-96, 55.95% in 2000-01 and finally to
56.95% in 2003-04. On the other hand, share of fisheries sector in agricultural GDP
has increased by more than three times from 6% in 1974-75 to 19% in 2000-01, and
finally 22.69% in 2003-04 (Table A.1.4, Appendix-A and Figure 1.4).
Contribution of livestock sub-sector to agricultural GDP kept on remaining lower
than fisheries following 1990-91, while the trend was just the reverse from 1977-78
to 1985-86. Before 1985-86, both these sectors were performing hand to hand. (Table
A.1.4, Appendix-A, and Figure 1.4)
E-19

22. 100
S Crop
h 90 Forestry
a 80 Livestock
r 70
Fishery
e
60
50
%
40
30
20
10
0
1972/73
1973/74
1974/75
1975/76
1976/77
1977/78
1978/79
1979/80
1980/81
1981/82
1982/83
1983/84
1984/85
1985/86
1986/87
1987/88
1988/89
1989/90
1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
Year
Figure 1.4. Trend of Crop, Forestry, Livestock and Fishery Share to Agricultural GDP
1.8 Unemployment
There has been a significant increase in the rate of unemployment in both the male
and female population since the Labour Force Survey (LFS) conducted in 1989. The
overall unemployment rate has increased to 3.7% in LFS 1999 from only 1.2% in
LFS 1989. Unemployment rate in the urban areas is higher as opposed to that of the
rural areas. For example, in the 1999 LFS (BBS, 2004), unemployment rate for both
sexes in the urban areas was 5.5%; whereas it was 3.2% in the rural area (Table
A.1.5, Appendix-A and Figure 1.5).
Both Sex
Male
3.8
Female 3.7 3.6
2.5 2.7
2.3
1.9 2 1.9
1.2 1.3
1
1989 1990-91 1995-96 1999-2000
LFS
Figure 1.5 Trend in Unemployment Rate in Bangladesh
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23. 1.9 Balance of Payment
The trade balance has always been deficit during the last 6-7 years and the amount of
deficit was the highest in FY 2002-03. In 1996-97, the trade deficit was US$ 2113
million, whereas the same in 2003-04 has increased to US$ 2207 million (MoF,
2004). Current account balance remained negative till 2000-01 after which it became
not only surplus but also shows increasing trend. Balance of payments fluctuated
over the last 6-7 years, but following financial year 2000-01 it started becoming a
surplus. (Table A.1.6, Appendix-A).
1.10 Human Development Index
Bangladesh is ranked 138th in the Human Development Report 2004, with a recent
most HDI value of 0.509 (Table A.1.7, Appendix-A). This value can be compared to
the best and worst performer in South Asian region. The best performer Maldives has
a HDI value of about 47.7% higher than Bangladesh; while the worst performer in
the same region, Pakistan has a 2.36% lower HDI value than Bangladesh (UNDP,
2004). This indicates that the human development status of Bangladesh is far off
from the best performer. However, the hope lies in the fact that Bangladesh has
shown a steady growth trend in HD indices since 1985 to 2002. Bangladesh is ranked
126th in terms of life expectancy, 140th in terms of combined primary, secondary and
tertiary gross enrolment ratio; and 138th in terms of GDP per capita (Table A.1.8,
Appendix-A).
E-21

24. 2 POVERTY SITUATION IN BANGLADESH
2.1 Introduction
This chapter provides a review of poverty situation of Bangladesh. The nature and
extent of poverty, its trend, measurement approaches, national and regional
distribution, factors affecting poverty and poverty reduction strategy of the
government and so on have been discussed.
2.2 Poverty dimensions and measurement
Poverty is a state of non-fulfillment of minimum requirements of food, shelter, fuel,
clothing etc. that is basic needs. It has manifold expressions, many dimensions and,
indeed, many roots. Given the multidimensionality, all routes: income and non-
income matter for combating poverty in the country. Poverty seen in this context
cannot be conceived as something reducible or summarily expressible in terms of
quantitative indicators alone. What is critical is to recognize the heterogeneity of
voices and perspectives expressed in economic as well as socio-cultural terms such
as class, gender, caste, ethnicity, and community.
Poverty is measured in Bangladesh using two approaches; of which the first method
is based on Direct Caloric Intake (DCI). A household with a per capita caloric intake
of less than 1805 k.cal per day is considered “hard core poor”, while a household
with less than 2,122 k.cal per day per capita is considered as “absolute poor” BBS
(2003). The second method is the cost-of- basic needs (CBN) method. To be
considered as poor, a household must have a per capita expenditure below a given
poverty line. DCI and CBN methods have been used to measure the extent of poverty
in the latest Household Income and Expenditure Survey (HIES) of Bangladesh. In
earlier household expenditure surveys (HES), up to 1991-92, BBS used both Food
Energy Intake (FEI) and DCI methods for measuring the incidence of poverty in the
country. This is the second times in HES series of BBS that CBN method had been
used to measure incidence of poverty. (B.2.1., Appendix-B, for details of the poverty
estimation methods)
2.3 Extent of poverty and its trend
The latest available estimate for poverty is for the year 2000, when 44.3 percent of
the total population was estimated to be in absolute poverty level on a DCI. The
corresponding figure for population was 55.9 million. This 44.3% absolute poor
includes 20.0% hard core poor, who consume only 1805 k.cal/day/person (Table
2.1).
Based on the CBN method, percentages of population under absolute and hardcore
poverty in 2000 were 33.7% and 49.8% respectively (Table 2.2). Interpreting in
terms of CBN method, one out of every two citizens is absolutely poor; and two out
of three of the poor are hardcore poor (Ahmed et. al., 2002). Over the last 10 years
(during mainly nineties), the incidence of absolute poverty at national level has
decreased to 33.7% in 2000 from that of 42.7% in 1991-92, according to the lower
line of poverty. The same trend also holds for the upper poverty line, which
decreased to 49.8% in 2000 from 58.8 in 1991-92. Poverty ratio, as measured by
E-22

25. CBN, fell by about one percentage point per year during the 1990s (Table 2.2). The
incidence of poverty in rural areas is more for both poverty lines I & II.
Table 2.1 Incidence of Poverty (Head Count Ratio) by DCI Method
Poverty Line I Poverty Line II
Year Absolute Poverty Level Hard Core Poverty Level
(2122 k.cal/day/person) (1805 k.cal/day/person)
Population (million) % of Population Population (million) % of Population
National
1983-84 58.4 62.6 34.3 36.8
1985-86 55.3 55.7 26.7 26.9
1988-89 49.7 47.8 29.5 28.4
1991-92 51.6 47.5 30.4 28.0
1995-96 55.3 47.5 29.1 25.1
2000 55.9 44.3 25.2 20.0
Urban
1983-84 7.3 67.7 4.0 37.4
1985-86 7.9 62.6 3.8 30.7
1988-89 6.3 47.6 3.5 26.4
1991-92 6.8 46.7 3.8 26.3
1995-96 9.6 49.8 5.2 27.3
2000 13.3 52.5 6.3 25.0
Rural
1983-84 51.1 61.9 30.2 36.7
1985-86 47.4 54.6 22.8 26.3
1988-89 43.4 47.7 26.0 28.6
1991-92 44.8 47.6 26.6 28.3
1995-96 45.7 47.1 23.9 24.6
2000 42.6 42.3 18.9 18.7
Sources: BBS (1998) Household Expenditure Survey, 1995-96
BBS (2000) Preliminary Report of Household Income and Expenditure Survey –2000
Table 2.2 Incidence of Poverty (Head Count Ratio) by CBN Method
Poverty Line I (Lower Line) Poverty Line II (Upper Line)
Year Absolute Poverty Level Hard Core Poverty Level (1805 k.
(2122 k. cal/day/person) cal/day/person)
Urban Rural National Urban Rural National
1983-84 28.0 42.6 40.9 50.2 59.6 58.5
1985-86 19.9 36.0 33.8 42.9 53.1 51.7
1988-89 22.0 44.3 41.3 43.9 59.2 57.1
1991-92 23.3 46.0 42.7 44.9 61.2 58.8
1995-96 14.3 39.8 35.6 35.0 56.7 53.1
2000 19.1 37.4 33.7 36.6 53.0 49.8
Source: World Bank (1998), Bangladesh: From Counting the Poor to Making the Poor Count.
BBS (2001) Preliminary Report of Household Income and Expenditure Survey-2000,.
Table 2.3 presents information on the incidence of poverty and squared poverty gaps
based on CBN methods in Bangladesh. The poverty gap (depth of poverty) provides
information regarding how far off households are from poverty line. This measure
captures the mean aggregate income or consumption shortfall relative to the poverty
line across the whole population. The squared poverty gap (poverty severity) takes
into account, not only the distance separating the poor from the poverty line (the
poverty gap); but also the inequality among the poor. That is, a higher weight is
placed on those households further away from the poverty line. The table reveals that
E-23

26. both the poverty gap and squared poverty gap show a declining trend for particularly
the national and rural context, but as far as the urban area is concerned they declined
from 1991 to 1995 showing an increasing trend thereafter.
Table 2.3 Poverty Gap and Squired Poverty Gap of CBN Method
Poverty Lines Year Poverty Gap (%) Squared Poverty Gap (%)
National Rural Urban National Rural Urban
Absolute poverty 1991
(Lower Poverty Line) 1995 7.6 8.6 2.6 2.5 2.8 0.7
2000 7.3 8.2 3.8 2.3 2.6 1.2
Hard Core Poverty 1991 17.2 18.1 12.0 6.8 7.2 4.4
(Upper Poverty Line) 1995 13.9 14.6 7.2 4.8 5.3 2.5
2000 12.9 13.8 9.5 4.5 4.8 3.4
Sources: BBS (2001) Preliminary Report of Household Income & Expenditure Survey-2000,.
World Bank: Poverty Trends in Bangladesh during the nineties
2.4 Differences in poverty estimates
Table 2.4 reveals that there exist sharp variations in the results of head count indices
computed with different methodologies. The table shows national poverty estimates
(head count index) in 2000, based on per capita income are more than 5 percentage
points lower than those based on per capita consumptions (44.2% vs. 49.8%). A
similar trend is also observed for rural and urban areas.
Table 2.4 Comparative statement showing head count index by different methods
Head Count Index (%)
CBN Method
Using Consumption Using Income
DCI
Year
Residence
Method Lower Lower
Upper Upper Poverty
Poverty Poverty
Poverty Line Line
Line Line
National 44.3 33.7 49.8 30.6 44.2
2000
Rural 42.3 37.4 53.0 34.1 47.4
Urban 52.5 19.1 36.6 16.9 31.3
Source: BBS (2003) Household Income and Expenditure Survey- 2000
2.5 Regional incidence of poverty
From the data of Table 2.5 it is evident that, under both measures of poverty, the
districts in the Rajshahi Division are the most poverty stricken. Within the Rajshahi
Division, incidence of poverty is less in urban areas than the rural areas. The second
most poverty stricken area is the Khulna Division, in which it also follows the same
urban-rural poverty pattern as that of Rajshahi Division. In these two regions, the
incidence of poverty is even higher than the national poverty figure, under both
measures.
E-24

27. Table 2.5 Incidence of poverty (Head Count Ratio) by Regions
Poverty Line I (Lower Line) Poverty Line II (Upper Line)
Absolute Poverty Level Hard Core Poverty Level
Regions (2122 k. cals/day/person) (1805 k. cals/day/person)
Urban Rural National Urban Rural National
National 19.1 37.4 33.7 36.6 53.1 49.8
Barisal 19.5 29.6 28.8 37.9 40.0 39.8
Chittagong 23.3 25.3 25.0 44.0 48.4 47.7
Dhaka 12.0 41.7 32.0 28.2 52.9 44.8
Khulna 27.5 36.8 35.4 47.1 52.2 51.4
Rajshahi 32.3 48.8 46.7 48.1 62.8 61.0
Source: BBS (2003) Household Income and Expenditure Survey- 2000
Table 2.6 Incidence of poverty according to Main Occupation of Household Head
Poverty Line I (Lower Line) Poverty Line II(Upper Line)
Absolute Poverty Level Hard Core Poverty Level (1805 k.
Main occupation of head (2122 k. cals/day/person) cals/day/person)
Urban Rural National Urban Rural National
Professional, technical and related 12.0 21.9 18.8 26.6 35.5 32.2
works
Admin and management works 1.9 12.7 4.9 1.9 23.0 7.7
Clerical, related works and govt. 22.0 40.5 33.1 39.2 54.8 48.6
executives
Sales workers 14.6 27.3 22.6 29.4 45.2 39.4
Service workers 29.6 39.4 35.9 53.5 56.2 55.2
Agriculture, forestry and fisheries 25.0 40.6 39.9 49.3 56.3 56.0
Production, transport and related 20.0 37.2 31.2 39.1 53.4 48.5
works
Head not working 10.7 26.5 22.2 18.2 36.1 31.3
All 19.1 37.4 33.7 36.6 53.1 49.8
Source: BBS (2001b). Preliminary Report of Household Income Expenditure Survey-2000. p.29.
2.6 Incidence of Poverty by Main Occupation of Household Head
Table 2.6 presents information about the incidence of poverty according to main
occupation of household heads. It is clear that highest incidence of poverty are for
households where the occupation of the head was agriculture, forestry and fisheries.
This holds for both the lower and upper poverty lines. The incidence of poverty for
the heads having agriculture, forestry and fisheries as occupations were 39.2% and
56% for the lower and upper poverty lines respectively. On the contrary, the lowest
incidence of poverty (4.9%) was observed for households with head in
administration and managerial works. There exists notable difference in terms of
poverty incidence between urban and rural areas.
2.7 Income and its inequalities among the households
Average monthly income per household at current prices was estimated to be Taka
5842, Taka 4816, and Taka 9878 at the national, rural and urban level respectively.
Incomes per member were Taka 1128, Taka 928 and Taka 1926 at the national, rural
E-25

28. and urban level respectively. Incomes per earner were Taka 4029, Taka 3368 and
Taka 6414 for the same levels respectively. In terms all the household income,
income per member and income per earner; the 2000 level is higher than those of the
1995-96 and 1991-92, meaning that the trend is on the increase (Table 2.7).
Table 2.7 Household Income, Income per member and earner
HES Household Income Income per member Income per earner
survey National Rural Urban National Rural Urban National Rural Urban
year
2000 5842 4816 9878 1128 928 1926 4029 3368 6414
1995-96 4366 3658 7973 830 697 1504 2950 2505 5014
1991-92 3341 3109 4832 625 581 905 2421 2253 3501
Source: BBS (2003) Household Income and Expenditure Survey- 2000, p. 19
Table 2.8 Percentage Share of income of Households by Decile Group
Decile of Household National Rural Urban
(Household Income 2000 1995-96 2000 1995-96 2000 1995-96
Scale)
Total 100.0 100.0 100.0 100.0 100.0 100.0
Lowest 5% 0.67 0.88 0.75 1.00 0.63 0.74
Decile 1 1.84 2.24 2.08 2.56 1.70 1.92
Decile 2 3.13 3.47 3.55 3.93 2.81 3.20
Decile 3 3.96 4.46 4.45 4.97 3.60 4.06
Decile 4 4.77 5.37 5.34 5.97 4.46 4.98
Decile 5 5.68 6.35 6.23 6.98 5.37 5.97
Decile 6 6.84 7.53 7.42 8.16 6.43 7.20
Decile 7 8.32 9.15 8.87 9.75 7,86 8.98
Decile 8 10.40 11.35 10.88 11.87 10.06 11.35
Decile 9 14.30 15.40 14.50 15.58 14.10 16.29
Decile 10 40.72 34.68 36.62 30.23 43.56 36.05
Top5% 30.66 23.62 26.74 19.73 33.64 24.30
Gini-Coefficient 0.472 0.432 0.430 0.384 0.497 0.444
Source: BBS (2003) Household Income and Expenditure Survey- 2000, p. 21
Table 2.8 shows that income gap between the poorest of the poor (bottom 5%) and
richest of the rich (top 5%) is widening as far as the income distribution is
concerned. In 1995-96 the income share of the top 5% of the households was 23.6%,
which was about 27 times higher than the income share of the lowest 5% of the
households. In 2000, income share of the top 5% of the households went up to
30.7%, marking about 46 times that of the income of the lowest 5% of the
households.
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29. 0.47
0.46
0.45
0.44 National Gini Coefficient
0.43 Rural Gini Coefficient
0.42 Urban Gini Coefficient
G in i c o e ffic ie n t
0.41
0.4
0.39
0.38
0.37
0.36
0.35
0.34
0.33
0.32
1983-84 1985-86 1988-89 1991-92 1995-96 2000
Years
Figure 2.1 Inequality of Income over years in Bangladesh
Although there has been growth in the economy inequality in income distribution
still exists. Over the last two decades, the National Gini Coefficient has been
increasing, which indicate that the inequality in the distribution of income has been
on the increase. When the rural and urban Gini coefficient is compared, it is evident
that the inequality is even more in the urban area. From the Figure 2.1 it is seen that
somewhere between 1984, the Urban Gini coefficient was lower than the national
inequality. However, after 1988-89 the inequality in urban areas exceeded the
national coefficient. Ever since, the urban Gini coefficient is showing an increasing
trend. The inequality in the rural area is the lowest. The national inequality in income
displays a decreasing trend since1995-96. (Table B.2.2, Appendix-B)
Contributions of different sources of income at national level, in order of importance
in 2000 were professional’s wage of salary accounting for 29.4%, business and
commerce (25.9%), agriculture (18%), gift remittances (10.9%), housing services
(7.8%), and others (8.0%). The trend of contribution were declining for agriculture
and increasing for business and commerce. Changes in contribution of the
professional’s wage salaries were very minimal (Table 2.9).
Table 2.9 Percentage Share of Income of Household by Sources of Income
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30. HES/HIES Total Agriculture Business Professional Housing Gift Others
and wages of services remittance
commerce salary
National
2000 100 18.3 25.9 29.4 7.8 10.9 8.0
1995-96 100 26.3 20.3 30.3 6.8 9.1 7.2
1991-92 100 33.4 14.8 24.3 9.4 10.3 7.8
Rural
2000 100 25.5 22.4 27.7 5.0 11.0 8.4
1995-96 100 35.4 14.7 27.7 6.5 9.6 6.1
1991-92 100 40.1 12.4 21.1 9.1 10.6 6.7
Urban
2000 100 3.7 32.4 32.6 13.1 10.6 7.5
1995-96 100 4.8 33.4 36.6 7.4 7.9 9.9
1991-92 100 5.9 24.7 37.9 11.0 9.1 11.4
Source: BBS (2003) Household Income and Expenditure Survey- 2000, p. 22
2.8 Per Capita Calorie Intakes
Table 2.10 shows that average per capita per day intake of energy is 2240 k.cal in
2000, which is 0.62 % less than that of 1995-96. This decrease is mainly due to the
receipt of low calorie food in urban area than the rural area. Rice constituted 75.4%
of the calorie intake in 2000, while fish accounts for 2.4% of the total calorie intake.
Calorie intakes are more in rural area.
Table 2.10 Per Capita Daily Calorie Intake by Food Items
National Rural Urban
Food item groups
2000 1995-96 2000 1995-96 2000 1995-96
Cereals 1609.9 1758.8 1746.0 1804.5 1470.9 1528.2
Potato 53.8 44.0 53.1 41.5 56.6 56.4
Vegetables 78.6 72.5 80.5 74.4 71.0 63.0
Pulses 55.6 47.7 52.9 44.0 62.2 66.3
Milk/milk products 31.0 37.5 29.1 34.7 38.6 51.1
Edible oils 115.4 88.1 101.1 75.3 171.9 152.9
Meat, poultry, egg 24.4 19.7 20.4 16.0 39.8 38.9
Fish 53.1 63.6 51.5 59.7 59.4 83.4
Condiments and spices 53.1 38.0 51.2 37.0 60.2 43.2
Fruits 19.3 18.9 17.9 16.9 25.1 28.9
Sugar/gur 27.3 36.8 25.3 36.2 35.0 40.0
Miscellaneous 38.3 28.4 34.1 22.9 55.4 55.8
Total 2240.3 2254.0 2263.2 2263.1 2150.0 2208.1
Source: BBS (2003) Household Income and Expenditure Survey- 2000, p. 33
2.9 Determinants of poverty
Planning Commission (2004), by making use of the HIES 2000 data, has employed a
regression analysis to identify the major factors behind poverty in Bangladesh. Ten
variables or factors were considered in the analysis. The variables were of three
different types. First, there were three quality and demographic aspects of the
households, viz. the gender of the household head, the literacy level of the household
head, skill level of the household head, the religion of the household, the size and
location of the household (i.e. rural or urban). Then there were intervention variables,
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31. i.e. whether the household has electricity connection and is the recipient of female
stipend. Finally, land ownership and income from assets owned were the asset and
income variables.
The findings suggest that households with electricity connections (as a proxy of
infrastructural facilities) are likely to avert the incidence of poverty. The female
stipend programme is another important factor which is likely to help reduce the
incidence of poverty. Households whose heads are literate and have acquired skills
are also likely to escape poverty. Households owning cultivable land are less likely
to be poor, which is in line with the general perception that land ownership is an
important factor in reducing poverty in Bangladesh. Similarly, households who have
asset income are likely to be non –poor. An important observation is that the higher
the size of the household the higher is the probability of being poor.
The findings regarding literacy and skill of household head as they relate to poverty,
underscore the need for expansion of literacy and skill development programmes as
one of the factors in reducing poverty in Bangladesh. Similarly, provisioning of basic
infrastructure (as proxied by electricity) is likely to pave the way for poor households
to engage in productive activities, raising their income and hence reducing poverty.
The objectives of the female stipend programme are twofold: (i) to influence or
induce households to send their girls to primary schools; and (ii) to receive cash
transfer from the government in recognition of their decision, which may also raise
the income of the recipient households. It is believed that both of these channels are
likely to have a positive effect on reducing poverty incidence. This indicates the
importance of this programme in reducing poverty in Bangladesh and hence the
programme should be continued and may even be expanded.
One major reason for larger household size contributing to the probability of being
poor is the uncertainty arising from a low life expectancy at birth and up to five years
of age. IT is expected that an expansion of the basic health services aimed at
reducing IMR and U5MR will help reduce family size. However, the evidence of
TFR remaining on a plateau is a major cause of concern which may have negative
impacts on population stabilization, household size and the poverty situation. Thus,
attention must be given to reactivate the population programme to attain
demographic targets.
2.10 Bangladesh’s Poverty Targets and Social development Goals
The vision of Bangladesh’s poverty reduction strategy is to substantially reduce
poverty within next generation. For this, poverty reduction has been made the
overarching development goal and Bangladesh’s commitment is to achieve the
MDGs and targets set in the PAPR with the ADB. Through adopting a
comprehensive approach, the Strategy visualizes that, by the year 2015, Bangladesh
would achieve the following targets:
1. Reduce the number of people living below the poverty line by 50%;
2. Attain universal primary education for all girls and boys of primary school
age;
3. Eliminate gender disparity in primary and secondary education;
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32. 4. Reduce infant and under five mortality rates by 65%, and eliminate gender
disparity in child mortality;
5. Reduce proportion of malnourished children under five by 50% and eliminate
gender disparity in child malnutrition;
6. Reduce maternal mortality rate by 75%; and
7. Ensure availability of reproductive health services to all women.
Given the pattern of economic growth, which is accompanied by rising inequality,
the growth elasticity of poverty reduction for rural areas was estimated at -0.73,
while the figure for urban areas is -0.64. Using these elasticities, the results show
that the attaining of Millenium goal of reducing the income poverty by half by 2015
will require significant additional efforts. The rural head count index will be halved
by the year 2015 only if the per capita rural consumption expenditure grows at a rate
of at least 4% per year. The calculations show that if the goal of reducing the
incidence of poverty by half is to be achieved by 2015 then Bangladesh needs to
sustain a GDP growth rate of about 7% per year over the next 15 years.
As regards other indicators, the likelihood of target achievement is higher given the
encouraging performance of the nineties in reducing child mortality and child
malnutrition as well as success in removing gender inequality at primary and
secondary schooling. The available evidence also suggests that the MDG target of
halving malnutrition rates by 2016 is not likely to be met through economic growth
alone. More effective public actions than in the past will be necessary in attaining the
goal of halving malnutrition. This would also require the exploitation of important
synergies between income and non-income indicators. Many of the social indicators
included under the MDGs are influenced by economic growth through the channels
of income- poverty reduction and public expenditures on social sectors. As the level
of income-poverty gets reduced and private spending on social sectors increases,
progress in attaining social development goals will be further stimulated. Better
governance of social expenditures along with higher allocations through government
and non-government channels, as emphasized under the strategy, would provide
additional momentum to the process of social development.
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33. 3 ECONOMIC GROWTH OF BANGLADESH
3.1 Introduction
Bangladesh is one of the most vulnerable economies in the world characterized by an
extremely high population density, low resource base, high incidence of natural
disasters, and persistent political instability during the most of the period after
independence. Notwithstanding these difficulties, the economy has performed
relatively well as is reflected in the real per capita income of the people has nearly
doubled during the last three decades. This has also been accompanied by an
impressive progress in human development (BIDS, 2001). Yet the development
challenges are still formidable in view of the low per capita income US$444 along
with nearly half of the population living below the poverty line. The purpose of this
chapter is to investigate into the pattern of economic growth the country has achieved
over time along with contribution of fisheries sector to the growth process.
3.2 Time Phases of Economic Growth of Bangladesh
During the last 32 years (1972/73-2003/04) in the history of economic growth in
Bangladesh, three successive time phases of policy changes can be clearly identified.
These are the phase of intensive intervention, the initial phase of liberalization and
the phase of economic reform.
Phase one starts from 1972/73 and goes up to 1977/78. This phase was characterized
by the post independence reconstruction that broadly corresponds to the
implementation period of the First Five Year Plan (1973/74-1977/78). The objective
of planned development was to achieve socialism in a democratic manner. All
financing organizations and industries were nationalized. There was considerable
state control over the economy. Agriculture enjoyed heavy subsidy and the public
sector was responsible for input distribution. Domestic industries were protected
from foreign competition through import restriction. Thus the first six years of post
independence period can be identified as the phase of intensive intervention.
Phase two goes from 1978/79 to 1989/90. Three development plans, namely the Two
Year Plan (1978/79-1979/80), the Second Five Year Plan (1980/81-1984/85) and the
Third Five Year Plan (1985/86-1989/90) were implemented during this period. This
was a phase of army-led development. This phase was marked by denationalization
of industries, gradual withdrawal of subsidies from agricultural inputs and
privatization of input distribution system. Government policies were influenced by
structural adjustment policies of the World Bank and the IMF (Alam, 1999). These
12 years can be identified as the initial phase of liberalization.
Phase three starts from 1990/91 and goes up to 2003/04. During this phase the Fourth
Five Year Plan (1990/91-1994/95) and the Fifth Five Year Plan (1997/98-2001/02)
were implemented. The economy relied more on market forces and state intervention
in the economy was substantially reduced. There was a marked reduction of tariff
rates on imports and reduction of subsidies from agricultural inputs. A tight monetary
and fiscal policy and a flexible exchange rate policy were followed throughout this
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