The South Asian Network on Economic Modeling (SANEM) on Saturday said the percentage of the population living below the poverty line (upper poverty line) has nearly doubled from 21.6% in 2018 to 42% in 2020, while the percentage of extreme poor (lower poverty range) trebled from 9.4% in 2018 to 28.5% in 2020.
Executive Director of SANEM Dr Selim Raihan disclosed the survey results at the 10th episode of SANEM Shongzog on “COVID-19 Fallout about Poverty and Livelihoods in Bangladesh: Outcomes from SANEM's Nationwide Survey (Nov-Dec 2020).”
The poverty rate has increased in both urban and rural areas in Bangladesh. The percentage of the populace below the poverty brand in rural areas was 45.3%, as the number was 35.4% in cities.
The percentage of extreme poor in rural areas was 33.2%, while in urban areas it was 19%.
“We conducted the nationwide household survey from 2 November to 17 December 2020 to unravel the COVID-19 pandemic’s effect on three broad indicators, namely Poverty, Inequality, and Career (PIE),” the Professor of Economics Department at Dhaka University as well said.
Compared to 2018, the common per capita home expenditure in 2020 features decreased by 45%, 29% and 17% in extreme poor (people young and old below LPL, or decreased poverty line), average poor (people among the LPL and UPL, or higher poverty line) and vulnerably poor (guys between UPL and 1.25 times UPL) households, respectively. As well, it has raised by 6% in non-poor and non-vulnerable households.
Because of this analysis, households have been classified as "old-poor" and "new-poor" depending on if they were already poor prior to the pandemic or whether they have fallen below the poverty line consequently of the pandemic.
In households categorized as poor just before the pandemic, 37% of household heads are self-employed, 20.5% will be wage-employed, and 39.5% are day labourers.
On the other hand, in households that contain fallen into poverty as a result of the pandemic, 42.3% home heads are self-employed, 23.9% are wage-employed, and 30.2% happen to be evening labourers. Among households categorized as "old-poor", 43.4% count on agriculture, 5.2% on the sector, 46.5% on service, 0.3% on federal government allowances, and 3% on remittance income source.
Besides, among new-poor households, 36.6% depend on agriculture, 6.4% on the industry, 51.2% on service, 0.4% on government allowances and 3.2% on remittances as their primary income source.
To understand the effect on inequality, the study crew constructed consumption expenditure Gini and some various other measures of inequality. The Gini coefficient has heightened from 0.32 in 2016 to 0.31 in 2018 and 0.33 in 2020.
The ratio of income share between richest 5% and poorest 20% households increased from 2.05 in February 2020 to 2.45 in November 2020. Similarly, the ratio of expenditure share in richest 5% households to that in poorest 20% households increased from 1.34 found in 2018 to 2.15 in 2020.
Simply because, the expenditure share of the richest 5% households increased by 1.02% whereas that of the poorest 20% declined by 3.13%. However, since virtually all ultra-rich households were not included in the survey, the real impact on inequality might get much larger than expected.
Common per capita education expenditure has got fallen for all households between 2018 and 2020, with the decline getting the sharpest for extremely poor households (58%).
On the other hand, average per capita health expenditure has increased for all households, with the increase being the best for moderately poor (97%) and non-poor (104%) households.
This study also attemptedto determine the inequality in access to online (TV, Internet etc.) education for college students: the findings advise that 19% students from rural areas and 27% pupils from urban areas participated in some type of online/Television learning. Among the college students who took portion in online/Television set education, 15% belonged to poor households, whereas 26% belonged to non-poor households.
The respondents mentioned the unavailability of classes on the web (49.1%), no usage of technological devices (6.1%), insufficient usage of devices (5.3%), insufficient access to web connection (5.4%), inability to bear the cost of internet connection (6.5%) as the most frequent reasons behind not having the ability to take part in online/TV learning.
The study also highlighted a paradox in remittance earnings: although remittance inflows at the macro-level had increased, at family members level, the amount of money received from migrant participants had decreased. 82.1% households claimed that they received less remittance from abroad while 64% claimed that they received much less remittance from within the country in comparison to what they received before the pandemic.
A possible explanation because of this paradox is that a substantial amount of remittance was received through informal channels ahead of the pandemic. Since these channels had been blocked, households received less overall compared to before.
Dr Raihan said SANEM, found in collaboration with the General Economic Division (GED) of Planning Commission, conducted a good nationwide survey covering 10,500 households in 2018. For the present study, SANEM approached the same group of households and may successfully conduct phone interviews with 5577 households from 500 Principal Sampling Models (PSUs) distributed across 64 districts.
“The survey questionnaire included questions related to income, occupation, education, expenditure, remittances, experience with COVID-19 aid and social proper protection programmes. We kept up to date the poverty collection incomes (both lower and top poverty line) based on the 2018 Home Survey conducted by SANEM and adjusting it for enough inflation,” he added.
Dr Raihan highlighted five major suggestions---management of the COVID-19 crisis, increasing social safety net coverage including direct income transfer to the poor, price stability of vital products, reduction of corruption, and creating employment opportunities.
Chairman of the Economics Division Professor Dr Mahbubul Mokaddem, economist Dr Zahid Hussain and Executive Director of Center for Insurance policy Dialogue Dr Fahmida Khatun also spoke there.