The economic liberalization during the last couple of decades led to impressive economic growth and poverty reduction in many developing countries. This period has also witnessed worsening of income inequality and widening of spatial disparity (World Development Report (2009); Kanbur and Venables (2005); Kim (2008)). There is considerable worry among policy makers about the extent to which this rise in spatial inequality is due to increasing disparity in opportunities in terms of provision of basic infrastructure and services. The recent growth and poverty reduction experience places Bangladesh as an exception to this trend of increasing spatial inequality. Bangladesh made significant strides in poverty reduction between 2000 and 2010 with incidence of poverty falling from 48.9 percent to 31.5 percent. During the same period, the incidence of poverty declined more than proportionately in traditionally poorer regions, reducing welfare gaps across regions. There is also no evidence of significant change in overall inequality over the same period. What made spatial disparity in Bangladesh to decline while its economic growth accelerated substantially? What were the sources of decline in spatial disparity in welfare?
In the policy discussions related to hunger, malnutrition, poverty and wellbeing, calorie intake is often the focus. Increasingly, however, micronutrient malnutrition appears to be a critical problem in many developing countries. Women and children are most vulnerable to micronutrient malnutrition due to their elevated micronutrient requirements for reproduction and growth. According to some estimates, nearly three billion people (including 56% of the pregnant and 44% of the nonpregnant women) suffer from iron deficiency anemia (IDA), and one-third of the world's population suffer from zinc deficiency. Twenty percent of the maternal deaths in Africa and Asia are due to IDA. One in every three preschool-aged children in the developing countries is malnourished. Undernutrition, coupled with infectious diseases, accounts for an estimated 3.5 million deaths annually. At levels of malnutrition found in South Asia, approximately 5% of GNP is lost each year due to debilitating effects of iron, vitamin A, and iodine deficiencies alone.
The potentially deleterious effects of gender disparities on growth and poverty reduction have been receiving progressively more policy attention (reflected, for instance, in the inclusion of the promotion of gender parity amongst the Millennium Development Goals and the 2012 World Development Report). Inequities in labor market opportunities are of particular concern since labor earnings are the most important source of income for the poor in the vast majority of developing countries.
Although the vast majority of the poor live in rural areas and rural non-farm enterprises account for about 35-50% of rural income and roughly a third of rural employment in developing countries, relatively little is known about gender inequities in rural non-agricultural labor market outcomes due to data-limitations. This is unfortunate given the proliferation and diversification of rural non-farm activities and their potential to alleviate poverty, especially in countries where the importance of agriculture as an employer is likely to diminish.
The seasonality of poverty and food deprivation is a common feature of rural livelihood in Bangladesh, but it is more marked in the northwest region of Rangpur. The recently launched policy interventions in the region provide a test case of what works and what does not in combating seasonal hunger.
The analysis of Bangladesh’s experience with seasonal hunger vis-à-vis year-round poverty shows a clear distinction between what is observed and what is excluded from placement and evaluation of poverty-mitigation policies, based on official poverty statistics. The key recommendations from this analysis are as follows:
Global warming may have severe consequences for developing countries prone to extreme weather events. Projections by the Intergovernmental Panel on Climate Change and the World Meteorological Organization suggest the frequencies and/or intensities of climate extremes will increase in the 21st century. Some recent extreme weather events illustrate how severe their consequences can be. Examples include heavy floods in Australia and Brazil in 2011, extreme winter weather all over Europe, heat wave in Russia, devastating floods in Pakistan, India, China, and Mozambique in 2010, and super cyclones in Myanmar (in 2008) and Bangladesh (in 2007).
For the last two years, there has been a mystery about the evidence supporting the past favorable assessments of the scope for reducing poverty using microfinance instruments such as the famous Grameen Bank (GB). The chances for many poor people to benefit from access to this form of credit rest, in part, on solving that mystery.
To understand the mystery we need to go back to an influential paper by Mark Pitt and Shahidur Khandker (PK), published in the 1998 volume of the Journal of Political Economy. PK documented research supported by the World Bank—research that came to provide the most cited scholarly evidence yet to support the view that microcredit helps reduce poverty.
Microcredit has been in the spotlight lately. This innovative banking program, pioneered by Professor Muhammad Yunus, has created the option for millions of poor people, especially women, to become self-employed entrepreneurs. By empowering women, microcredit has created opportunities to lift countless families out of abject poverty. Clearly, this has been a net gain for society. Yet current criticism of microcredit points to its failure to alleviate poverty, high indebtedness of borrowers, high interest rates, coercive loan-collection tactics, lack of transparency in public fund management, and uncertainty of succession in leadership.