The most recent official poverty estimate in Bangladesh shows remarkable progress in extreme poverty reduction. The extreme poverty rate in the country fell to 5.6% in 2022 (Household Income and Expenditure Survey, HIES, 2022) from 12.9% in 2016. The upper poverty rate has fallen to 18.7% in 2022 from 24.3% in 2016.

Bangladesh is progressively stepping forward to zero hunger, the daily per-capita calorie intake reached 2,393 kilocalories which was 2,210 kilocalories in 2016. Simultaneously, both income and consumption inequality are increasing and creating new vulnerable poor groups.

Bangladesh is committed to investing more in poverty reduction. In particular, investment for skills development programmes, such as the "Skills for Employment Investment Programme” and the "Employment Generation Programme for the Poorest”, are aimed at enhancing the income-generating capacity of the poor. More investment is needed for the vulnerable non-poor and multidimensional deprivation indicators. Such investment will drive positive impacts on other SDG indicators, such as health indicators (SDG 3), sustainable water and sanitation (SDG 6), gender parity (SDG 5), productivity through education (SDG 4), overall economic growth (SDG 8), development of small enterprises (SDG 9) and mobilizing financial resources for biodiversity and sustainable ecosystems (SDG 15).  

However, initiatives for poverty reduction may have trade-offs with initiatives for water conservation; reducing degradation of natural habitats; financing for biodiversity and ecosystems and sustainable management of natural resources. Therefore, poverty-eradicating initiatives should be based on the responsible use of natural resources and on developing biodiversity-resilient sustainable urbanization.

Source: Household Income and Expenditure Survey (HIES), 2022, Bangladesh Bureau of Statistics.

Bangladesh successfully maintained a GDP growth rate of more than 7% during the first three years of SDG implementation. In the fiscal year (July-June) 2018-2019, the GDP growth rate was 7.9%. It decreased to 3.5% due to COVID-19. While the GDP growth rate is on the path to recovery, Bangladesh needs higher and more productive investment  as a percentage of GDP that has remained at 30-32% for several years against the ongoing national five-year plan target of 36.59% by 2025. Bangladesh's higher GDP growth is driven by several factors, notably a robust demographic dividend, a large domestic market, a vibrant ready-made garments sector, resilient remittance inflows, expanding grassroot-level entrepreneurs, investment in girls' education and women’s empowerment, infrastructure development for digital connectivity and overall macroeconomic stability.  

Even during COVID-19, Bangladesh's per capita income continued rising and reached $2,688 in 2022. More investment for sustaining GDP growth may extend this positive impact to other SDGs, such as poverty reduction (SDG 1), better health outcomes (SDG 3), and more efforts towards resource management, including integrated water resources management (SDG 6), even transboundary cooperation.

The efforts for GDP growth are also expected to push SDG targets related to improving energy efficiency (SDG 7), infrastructure development and the upgrade of technology for supplying modern and sustainable energy services. However, growth-enhancing activities may push back SDG targets to reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination; access to safe water, protection of water-related ecosystems and several other SDGs.

Therefore, efforts towards GDP growth should be more climate resilient, environmentally compliant and sustainable. More initiatives for disaster loss recovery, including the development of sustainable housing, are necessary to sustain economic growth.

Source: National Budget Speech 2023-24, Ministry of Finance; World Bank (https://data.worldbank.org/country/bangladesh).

Productive employment is the primary avenue via which Bangladesh's rising GDP and per capita income growth may become more inclusive and reduce inequality. Bangladesh has a total population of 169.4 million that includes a working-age population of 120.35 million, and 61% of the working-age population is part of the labour force (Labour Force Survey, 2022). The participation of women in the labour force is 42.7%, almost half the participation rate among men. Moreover, the fact that more than 80% of the workers are informally employed raises question about the quality of employment.

The Government has undertaken several skills-development initiatives to improve the employability of the labour force, ensuring decent work and creating job opportunities, especially, for the youth. One key programme is the Skills for Employment Investment Programme (SEIP)¹. Moreover, the  Economic Acceleration and Resilience for NEET² (EARN) project is aimed at youths.

Bangladesh has a  significant youth population reflected in labour force statistics, namely 36.5% of the total labour force are in the 15-29 years age group. Depending on whether or not youths are employed productively will have two possible outcomes: the country may benefit from the demographic dividend or face demographic disaster.  

Bangladesh's rising labour force participation is driven mainly by the youths, more particularly by young women. However, there is still a digital divide between the rich and the poor, between men and women, between rural and urban areas. The Aspire to Innovate (a2i) project of the government, supported by UNDP, is working for digital transformation throughout the country, with the aim of lowering the digital divide and creating greater employment opportunities. While there are no gender discrepancies in the formal sector wage rates, huge gaps are noted in informal sector employment.

To remove the bottlenecks in boosting female employment, the prime focus must be on dealing with certain inherent constraints like child marriage, women's safety and security in the public sphere, along with policy interventions for dealing with the challenges related to gender-centric norms.

More investment in human capital will push other SDG targets, including better health outcomes;  more leadership opportunities for women; better management of water and sanitation; international cooperation on and access to science, technology and innovation, and also for further support on capacity building.  However, capacity-building initiatives need to consider energy-efficiency targets.

Source: Labour Force Survey 2022; Household Income and Expenditure Survey (2022); Bangladesh Bureau of Statistics.

¹ The SEIP programme (2014 to 2024) aims at transforming the labour market from “low-skill, low-wage equilibrium” to a “higher skill, higher scale virtuous cycle”, with a target of training more than 0.8 million people by 2024 and providing 60% of the trained individuals with gainful employment. It’s being executed by the finance division of the government of Bangladesh and supported by several ministries, institutions, and industry associations.

² Not in employment, education or training.

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In Bangladesh, a notable caveat in impressive GDP and per capita income growth is rising inequality. The Gini coefficient, a measurement of inequality, has been on the rise for more than a decade. According to the HIES (2022), the Gini Coefficient is 0.499 which was 0.482 in 2016 and 0.458 in 2010.

According to the SDG tracker, income growth of the bottom 40% of the population in Bangladesh is targeted to be 9.5% by 2025 and 10% by 2030 while it was 7.7% in 2018.

Inequality is a complex challenge. The 8th Five-Year Plan (2020-2025) incorporated six key interventions designed to directly address the immediate drivers of inequality. These include early childhood development and nutrition interventions;, attaining universal health coverage and access to quality education; cash transfer and progressive taxation, and expanding rural infrastructures, such as roads and electrification. While these are all good strategies, the rising inequality indicates that more targeted interventions are needed to make economic growth more inclusive. Programs that prioritize job creation, climate change adaptation, and social protection systems, along with robust revenue-generating institutions, can rapidly reduce income inequality.

Those interventions will have positive synergies on SDG targets toward health outcomes; access to water and sanitation; utilizing the possibilities of the blue economy; achieving gender equality; and others. However, distributional justice in water and sanitation access could be challenging to achieve.  

Source: Household Income and Expenditure Survey (HIES), 2022.