Poverty alleviation will continue to be the central agenda for
both the government and external donors. Reducing poverty through accelerated
economic and agricultural productivity is the main thrust of the government’s
Fifth Five-Year Plan (2016-2021). Poverty incidence is targeted to decline from
40 percent to 20 percent by 2021, while the annual average GDP growth rate is
set at 7.5 percent, a level necessary to significantly decrease poverty.
Halfway through the plan, growth had averaged above 6 percent. The plan
emphasizes the role of the private sector, especially in export-oriented
industries, as the main engine for sustainable economic growth and employment
opportunities. This will be facilitated by reforms in the financial and capital
markets. Because 70 percent of the population still lives in rural areas,
self-sufficiency in food grains is emphasized as a route to sustainable poverty
reduction. Other measures to tackle poverty are human resource development;
promotion of small-scale enterprises through microfinance; participation of
local-level institutions in rural development; and good governance. Prospects
for poverty reduction in Bangladesh
were set back in 1998 2004 by heavy floods. Progress has been slow despite
substantial government effort and resources that included allocating about a
fourth of the annual development budget to social infrastructure. Thus, the use
of the development budget allocated to the social sectors and social
infrastructure needs to be extensively analyzed, and a strategy developed for
increasing budget efficiency to reduce poverty in a cost-effective manner. Microfinance has been extended to a large segment of the rural
population. It is time to establish stronger ties between these small-scale
enterprises and the formal sector by developing more effective marketing and
distribution links with medium- and large-scale industries. Non government
institutions organized to assist small-scale industry can play a key role.
These links will also enhance the role of the private sector in poverty
reduction through generating employment and income for rural small-scale
industries, many of which are run by women.
