Rural poverty reduction: Priority in budget

Keeping this in view, the millenium development goals and poverty reduction strategies, Bangladesh focuses on five broad issues of which expanding the scope of pro-poor economic growth is the most important one. In fact, all road maps of the country lead to poverty reduction. Any meaningful poverty reduction strategy for Bangladesh needs to be based on a multi-sectoral approach with due importance to relevant dimensions.

The Government of Bangladesh has formulated a plan to halve poverty by 2015. It indicates that 50% of the population living below the poverty line will get an opportunity to improve their economic, health and environment status within 9 years. The time is very short and the task is stupendous. Every budget is, therefore, important to address this challenge with strategic approaches, firm commitment and resource mobilization as top most priority .

At present, 76.61% percent of the population lives in rural areas of Bangladesh. It indicates that out of 14 crores of population about 10.72 crores live in rural villages. The incidence of poverty in Bangladesh shows a downward trend after liberation. The periodic Household Income on Expenditure Survey, conducted by BSS, reflects a significant decline in rural poverty from 83 percent to 44 percent while hard core poverty was reduced to around 20 percent. It indicates that about 4.71 crore people are living below poverty line, of which around 2.14 crores are hard core and extremely poor. They have no means to take two square meal and earn a dollar in a day. Any approach to development must therefore, address the poverty of the rural population and their needs and demands for existence. The priority of the budget must aim at creating opportunities for the rural poor in employment and in organization as well as improving the negotiating capacity of the poor to defend their rights and access to resources.

The major strategies for rural poverty alleviation should at least ensure at the following:

*Higher growth with more investment and raising farm and non farm income in rural areas.

*Significant mobilization of resources in social sector specially in education and health.

* Targeted projects for income generation and employment creation with the encouragement of fisheries, livestock, poultry etc.

*Building up social safety nets for the poor with different measures like vulnerable group development, food for education etc.

The specific areas of interventions are many and diversified. A few of them need to be addressed in the budget of 2006-2007 with due diligence and priority as below:-

Agriculture
Every 1 percent increase in agriculture productivity reduces poverty by 0.48 percent and so takes a larger portion of the rural poor out of poverty cycle than any other means. Agriculture has the potential to contribute to poverty reduction through direct effect on farm increases and indirect effects on overall economic growth with its impact on the price of food and other essential. The contribution of agriculture to the GDP is around 22% at present with the employment of two-third of the workforce in this sector. Unfortunately, growth in agriculture in the last fiscal year was only 0.3 percent. It appears that adequate attention has not been given to agriculture. The sector is beset with different problems of which fertiliser shortage, credit availabity, irrigation etc are prominent.

The government, during the last four years, had earmarked more than Tk. 5500 crores as credit for the agriculture sector but poor rural farmers preferred informal arrangements and rushed to Grameen, BRAC, BRDB, PKSF, PDBF etc. The formal sector could not reach the rural farmers as expected. Therefore, rural financial sector reform is an imperative for a strong and efficient system of financial intervention for effective rural poverty alleviation. The budget must provide a policy so that poverty stricken rural population can at least, receive the declared support of the government

The landless poor
A steady increase in the number of land less households in Bangladesh is alarming, particularly in the context of the scarcity of alternative employment opportunities in the farm and non-farm sector. It appears from different studies that landlessness has increased at the same rate as the population of Bangladesh. There is a close correlation between landlessness and poverty. This is very prominent and visible in rural areas. It appears from a news item published in Daily Ittefaq on June 2, 2006 that 95% of the population are landless in 106 villages of the 5 upazillas of Pabna, Sirajgonj and Natore. On the other hand, in Chalan Beel area 64,000 acres of vested property are occupied by land grabbers in addition to 60,000 acres of Khas land under their possession.

The long standing demand and repeated appeal to distribute alluvial land and land under khas khatian to the poor must be given due importance in the budget. This is in fact ,consistent with the declared policy of the government.

Indigenous population ,residents of hard to reach areas
Different studies clearly identified the poverty level among the indigenous population, residents of haor, beel, char and riverine areas as alarming and predominant. The scope for employment and access to resources are very limited. They are a very vulnerable and disadvantaged group neglected repeatedly in financial policy, and with no significant budgetary provision to address their grievances.

Rural poverty reduction in Bangladesh is a colossal task for which strong international support is required in addition to domestic policies, reforms, investments. To achieve the target of reducing poverty by half by 2015, every budget must ensure a GDP growth of 9 percent, prioritising rural poverty reduction as the top most one. Investment to reduce rural poverty has an impact to reduce urban poverty since migration from the rural to urban is increasing significantly every year. There should be a clear policy for raising farm income, crop diversification, non-crop agriculture, horticulture and floriculture. Rural non - farm activities have a strong linkage with poverty alleviation.

The budget for 2005-2006 provided an allocation of around 43% for poverty alleviation under different projects. The budget of 2006-2007 must increase the allocation by more than 60% since the previous allocations could not make remarkable breakthrough in the absence of effective monitoring and specific quantification of the allocation. The government of Pakistan, as indicated, is going to allocate Rs 41,500 crores for this in their budget of 2006-2007 which is more than 50% of the total outlay, as stated by their Finance Minister,

The Agenda for Action adopted in Copenhagen Social Summit, 1995, Platform for Action of Beijing World Conference for Women 1995, World Food Summit in Rome 1996, suggested action for poverty alleviation as top priority one, of which Bangladesh is a signatory. Above all, poverty alleviation is in our Constitution as a national policy and, thus, it is obligatory for the government to devise effective policy, with budgetary provisions, to reduce the poverty of the hard core poor who cannot take two square meals a day.

Dhiraj Kumar Nath is a freelance contributor.