Poverty Dynamics and Poverty Reduction Strategies

Abstract

Analysis of Household Income and Expenditure Survey 2010 data (HIES 2010) by the BBS indicates a remarkable reduction of poverty in rural Bangladesh during 2005–2010 as the incidence of poverty in rural area dropped from 43.8 % in 2005 to 35.2 % in 2010, 8.6 point in percentage reduction over the period (BBS 2011). At national level this reduction was from 40.0 % in 2005 to 31.5 % in 2010 (8.5 %). Though a large number of households (7,840) were interviewed in HIES 2010, these findings have limited explanatory power and do not explain the process of poverty reduction. Of course, this type of static analysis has limitations to explain the processes of falling into poverty and getting out of it and, thus, to get a deeper understanding of the dynamic nature of poverty. Static analysis does not provide complete guidelines for framing appropriate policies for poverty alleviation. In order to overcome this type of limitations, there is a need for measuring dynamics of poverty in multidimensional aspects such as household characteristics, human capital, vulnerability, women’s empowerment, assets and liabilities beyond analysis of income and consumption expenditure. Such a cross-disciplinary analysis is important for measuring poverty dynamics and for framing policies for poverty reduction.