51pc of the total poor are ‘newly impoverished’: BIDS

Staff Reporter  :
The aftermath of Covid-19 and the economic downturn have caused a significant increase in poverty levels, raising concerns as urban observe a staggering 51 per cent rise in newly impoverished individuals, exacerbating the existing poor population.

The Bangladesh Institute of Development Studies (BIDS) unveiled its BIDS Research Almanac 2023, with Director General Dr. Binayak Sen presenting the information during the inaugural session at a city hotel on Wednesday.

The event was also attended by Planning Minister MA Mannan, State Minister for Planning Shamsul Alam, and Secretary of Planning Division Satyajit Karmaker.
Binayak Sen said, “About 50 per cent of the total poor are newly impoverished. We must take care of this category of people who are in distress.”

He further stated that self-employment plays a significant role in reducing poverty during the post-COVID period. Those who had financial savings have utilised them for self-employment. Additionally, modern technology, especially mobile financial services (MFS), has helped reduce poverty by providing assistance in financial empowerment.

BIDS conducted this research on 2,046 households in 2022. It is mentioned that before the pandemic in 2019, the rate of self-employment among the poor was 33.60 per cent. After the pandemic last year, it increased to 38.56 per cent. On the other hand, among the ultra-poor, the rate of self-employment was 15.47 per cent before the pandemic, which increased to 33.21 per cent afterwards.

In 2019, 39.29 per cent of poor households used mobile financial services (MFS). After the pandemic, i.e., in 2022, it increased to 78.78 per cent. Although the number of bank accounts opened by them did not increase significantly, before the pandemic, the percentage of families with bank accounts was 32.22 per cent. Later, it increased to 33.79 per cent.

On the other hand, the trend of using MFS has also increased among the extremely poor families. In 2019, 15.15 per cent of such families used MFS, which increased to 66.67 per cent after the pandemic. However, the inclination to open bank accounts did not increase among these extremely poor families.
Binayak Sen stated that many children have dropped out of school during the pandemic. This trend is more prevalent among low-income families. In urban areas, where social protection facilities are limited, special attention needs to be given to these areas.

Planning Minister MA Mannan stated, “When wealth is created, inequality arises. We are working to reduce inequality. As part of that effort, we are providing elderly allowances, widow allowances, and similar benefits. They receive these benefits even without working.”
He further said, “Ensuring equitable opportunities can reduce inequality. We are striving to achieve that.”