The Strategies to Foment Growth and Eradicate Poverty: In the Context of

Bangladesh
When almost 74% of the people lead a life below the poverty line all over the world,
Bangladesh is experiencing enormous economic growth during the period 2010 to present
though the growth has been less employment generating compared to the earlier years (CPD,
2019). According to a report of World Bank, in 2019 Bangladesh will be the third fastest
growing economy with expanding at 7.4% in this year in terms of achieving Gross Domestic
Product. Though the economic growth of Bangladesh is increasing in a tremendous way
nowadays, but it cannot able to represent the actual condition of majority of the people. The
share of population living under the upper poverty line is 24.3% In 2016 and in terms of lower
poverty line, the share of population living in extreme poverty is 12.9% in 2016 (Bhattacharya,
9th May 2019). The benefit of the growth mostly is enjoyed by the capital owners (CPD, 2019).
Moreover, it tries to hide the struggles of middle-class working people to lead a better standard
of living. According to a report of Prothom Alo, only 10% people own the38% of the total GDP.
There are several reasons why the economy of Bangladesh is increasing in a tremendous way.
Such as- Manufacturing, constructions, bumper crop harvest, remittance and so on (Prothom
Alo, 1st May 2019). But it is also necessary to trace out the veritable condition of those people
who relate to these sectors. They do not get the proper wage, health care facilities and so on.
The most effective way of earning higher rate of GDP is the garment sectors, but the labors of
these sectors are living a necessitous life. According to a report of Prothom Alo, 98 labors out
of 100 labors do not get the bare-minimum subsistence wage to lead a life, 3 out of 10 labors
do not have the ability to afford food for a day. Moreover, from those persons Bangladesh
earns 7% of the total GDP by their remittance, they also do not able to afford a healthy life and
at the age of 25 to 30 they must face critical health problem.With all these labyrinths
Bangladesh is making a prosperous economic growth by underestimating the struggles of
middle-class people. Moreover, this growth might not be as helpful as it should be because a
higher level of inequality between different classes of people is direct result of this kind of
knaggy economic growth.

The current nature of growth is not supportive for different class of people. It is favoring the
urban rich and rural very rich (Bhattacharya, 2019). Though from this kind of growth the
poverty rate may decline but this situation is more likely to create middle-income trap which
can be the major obstacle for the further development for a developing country like
Bangladesh. Middle income trap refers to that situation, in which a developing country that
able ensures a certain income gets stuck at that level of income Moreover Bangladesh has
made significant growth in all sectors but rising inequality through the distribution of income,
consumption of wealth has become the major obstacle. Moreover, disappointing employment
growth during the period of high economic growth gives a rise to a concern that Bangladesh is
experiencing “jobless growth”. Only the economic growth is not enough to remove this
barrier.Hence this is the high time for the policy makers to undertake these circumstances and
should punctuate more on mold or quality of the growth rather than focusing only on the
quantitative resultants. Some of the factors can be undertaken as effective antidotes to unravel
the crux of inequality and can also be played a vital role to decrease the poverty rate in
impetuous way. The factors are briefly explained below:

Investment in Human Capital:

Human development is an effective antidote, which is the basic raw material to build up a
nation. It helps to expand the choices of people by ensuring freedom which they have reason to
value (Sen, 1999). There are three factors of production, i.e., land, labor, capital (Mankiw,
2013). When economists are discussing about the means of economic growth, they often talk
about capital investment and physical capital has taken the entire stage, but the human capital
does not get the proper attention that it deserves. Though physical and human capital both are
the two necessary parts of factors of production, but human capital is often missing from many
developing countries. Bangladesh also should give priorities to human capital. Investment in
human capital can be a major tool for achieving a sustainable economic growth. Kuwait can be
ideal example from those countries who achieved development by ensuring investment in
human capital. By converting temporary gains into permanent income Kuwait achieved stable
economic growth (Ranis, 2000). This transformation took place because they gave the
importance to human capital and human initiative rather than giving importance in financial
savings. Without investment in human capital it is not possible to gain a stable growth of
production. Some neighbor countries achieved a great economic growth with same amount of
input that Bangladesh has but by investing in human capital their growth rate is more than us
and able to remove poverty in a higher rate (Ranis, 2000). Investing in human capital
(education, health) increases the skills of labor and the skilled labor force helps to increase the
productivity. It is considered that human beings are the means of development and that is why
they are treated as the residual elements of development. It is necessary for the stable
economic development of Bangladesh to treat human beings as the means and end of
development. Hence, investment in human capital is an essential antidote to be undertaken.

Adding the Missing People to The Policies of Development:

In any development policies it is the common problem is that the bottom or poor 40% people
are excluded. For removing this crux some steps can be taken by the government. They are

1) Though the first chapter of any development planning showed the macroeconomics
aggregates of GNP, savings and investment but it is necessary to present a complete and
comprehensive human balance sheet (Haque, 1995). Any development plan cannot be
implemented without the deficient knowledge about the people of that area. For that reason, it
is necessary to make a human balance sheet to recognize the human factors (Haque, 1995).
After recognizing the human resources, profile of income distribution, relative poverty, rapid
demography transition, unemployment rate, social attitudes of the people of anarea, it is easy
to undertake any policy that helps to remove the poverty.

2) Production and distribution process should be given the same priorities for the economic
development of the nation. By giving priorities to the redistribution process it can be ensured
the reduction of bypassed people from development planning.

Ensuring Equitable Distribution of Resources:

Equitable distribution should be taken place in terms of reducing poverty. Sometimes, equity
has replaced by promoting equality. Equity refers to give the opportunities to the people to
lead a healthy life according to their needs and equality ensures that everyone should get the
same opportunities to lead a healthy life(Haque, 1995). Though both are promoting the fair and
just distribution, but equality should be needed only when everyone starts from the same place
and needs the same thing to become successful. For that reason, ensuring same amount of
things to everyone is not fair unless they start from the same position. The main difference
between these two terms lies in the distribution. Equal distribution of resources cannot be a
fair path of distribution of wealth for everyone in the country like Bangladesh (Matin, 2017).
Sometimes for increasing inequality becomes the result of equal distribution. Because for equal
distribution of wealth the riches become more richer and the gap of inequality rises. At first it is
essential to make all people equal by ensuring equal opportunities for them to participate in
the development projects and ensuring equitable distribution of resources, then equality can
take place for the further development.

Ensuring Effectiveness of Institutions:

Institutions are necessary for a country for a stable market system, trade system or continuing
the stable domestic production and ensuring the property rights. Formal institutions refer to
the written constitution, laws or policies and are the tool of ensuring property right. Without
effective institution it is not possible to ensure a property right for everyone and without
ensuring the property right a market of a country cannot able to run and the also the people of
all sectors cannot ale to participate in market activity (Khan, 2013). Ineffective formal
institution can cause corruption, violence of rule of law and market failure and create inequality
between different classes of people (Ahmed, 2017). Thus, economic growth hampers and make
slower of the declination of poverty rate because of ineffective formal institution. Effectiveness
also needs for informal institution (unwritten traditional norms and customs) to make a better
society without any kind of cultural barriers or superstitions which can make a state disable to
function (Khan, 2010). Hence it is necessary to ensure the effectiveness of institutions for
eliminating the curse of poverty from the society.

Ensuring Instrumental Freedom:

Freedom is the tool which is needed for every individual for increasing the capability of
functioning (sen, 1999). Several instrumental freedoms are necessary to expanse the path of
eliminating poverty through making social choices. For example, Political freedom is the major
tool of participating in the decision-making process of nation; without this people cannot
participate the development policies and choices cannot be expanded, economic freedom is
also essential for the further economic growth and without economic freedom a stable market
system cannot be taken place. Moreover, social opportunity is the one of the vital tools that
can help to the expansion of the choices of the people of the society, which is essential to
remove poverty (Sen, 1999).

Ensuring Inclusive Development Policy:

Inclusive development policy refers to the development process where all excluded and
marginalized people can take part as a stakeholder. The idea of inclusive development has
come into light in the period of second half of the twentieth century. The term inclusive
development included all the individuals for the purpose of making participatory development
process (CPD, 2019). Inclusive growth refers to the growth that creates equal access to the
opportunities for the excluded people by ensuring economic freedom. It also gives priorities to
increase the GNP with the expansion of non-income aspects of wellbeing (Ahmed, 2017). There
are mainly two aspects of inclusive development. They are- sustainable and high rate of
economic growth for creating stable employment opportunities and ensuring equal access of
opportunities by social inclusion which are the necessary steps to reduce poverty rate.

Community-led Development Policy:

Community-led development policies can be effective way to eliminate poverty through
enabling the participation of all people in economic development. The aim of this process is to
overcome the deep resignation people in Bangladesh where they often find themselves as a
result of failed development initiatives. The aim of this process is to make community that
consists of some people with clear vision of them and train them as a leader by giving them all
basic needs and ensuring a successful career for them(Harvey, 2011). Then they will train some
other groups of people for further development process and the cycle runs with full of speed
and all the excluded human beings will take part of this process. Thus, the communities are
encouraged to make their own vision and an action plan to develop the society. It is also
necessary to ensure that the community members will work together to construct some new
policies, food banks, clean water sources, public latrines, rural banks and so on (Mann, 1999).

Promoting Decentralization:
Bangladesh has the right conditions in which decentralization can take please as an effective
tool to remove the curse of poverty (World Bank, 2019). Decentralization refers to the
redistribution of administrative responsibilities within the central government (Hussain,
2019).Moreover, decentralization also is the process in which devolution can take place which
means transfer of authority to autonomous and independent units of local government with
corporate status and privatization that encircles transfer of function from government to non-
government organizations (Hussain, 2019). In some regions of Africa decentralization helps to
empower the local elites and with the process of decentralization the underprivileged groups
can able to achieve some representation by which their command over resources has increased
(Crook). Therefore,it is the high time to promote decentralization for ensuring the participation
of the people of all sectors and it is also indispensable for reducing corruption as well as
poverty rate among the socially excluded people.

Ensuring Women Participation in Formal Sector:

According to radical feminists, women are the poorest among the poor. In a developing country
like Bangladesh the estate of women is not up to the mark. In Bangladesh 49.56% of the total
population is female (World Bank, 2016). According to a report of The Daily Star, only 36% of
female are engaged with formal labor market which is very low compared to the participation
of informal sector as well as to the men. When almost half of the people are female then these
circumstances are alarming. Moreover, technological furtherance is also responsible to take
away more employment opportunities from the women than the men and women are also
more likely to get low wages compared to men in similar kind of jobs. In these circumstances, it
is essential to take steps to make a better amount of women participation by giving incentives
with equal opportunities as men formal labor sector for ensuring a decent life for almost half of
the total population.

Ensuring Labor Rights and Minimum Wage:

To promote a sustainable democratic worker institution which would help to create a more
equitable distribution of wealth, it is necessary to ensure the labor rights (Hiatt, 2004).
Moreover, to fix minimum wage is also an essential factor for a country like Bangladesh.
Though there is no standard method to set an optimal level of minimum wage, but it is
necessary to set an optimal level of minimum wage to reduce poverty rate. Moreover, it
supports the incomes of those in the lower part of the income distribution- even when they do
not lift households above an arbitrary poverty line (IPC IG, 2018).

Bangladesh has immense potentiality to able to remove these obstacles from the path of
achieving sustainable growth through the higher rate of poverty rate reduction. It is the high
time for the nation to give focus on economic development through ensuring the equitable
distribution of resources by prompting inclusive participation. Hence economic development
should be the target to achieve by reducing the automatic process of social exclusion through
by participatory development practices.

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