Social Watch Report 2009

angladesh
More poverty, vulnerability and food insecurity
Poverty, vulnerability and food insecurity have increased in Bangladesh. The high price of food grains
and the high level of inflation have led an additional 12.1 million people into poverty. There is increased
frequency and severity of natural disasters. Two consecutive floods, plus Cyclone Sidr, together with
the global price of food have led to food supply problems. It is the poorest and the female-headed
households who are worst hit by the hike in prices for basic goods.
Unnayan Shamannay
Taifur Rahman
Arifur Rahman
100
Basic Capabilities Index (BCI)
100
BCI = 56 GEI = 53
Children reaching
5th grade
55
Gender Equity Index (GEI)
Empowerment
Since its independence in 1971, Bangladesh pursued
an inward looking development strategy with
19
excessive government intervention in every aspect of
0 6
0
0
economic activity. With the vision of a socialist type
of agriculture, cooperative farming was encouraged
20
34
99
93
while the procurement and distribution of seed, fertilizers,
pesticides and all sorts of agricultural 98equip-
Births attended by
54
100 100 100
100 100
100 100
86
ment was controlled by the Government. A series of skilled health personnel
Survival up to 5 Economic activity
Education
measures, quantitative IEG restrictions, of Bahrain highly = 46 differen-
BCI of Bangladesh = 56
IEG of Bangladesh = 52,7
tiated tariff rates (ranging from 0% to 400%), and
huge subsidies, along with an overvalued exchange
rate, were put in place to protect domestic farms
from competition. This restrictive environment was
reinforced by domestic market policy interventions
in the form of credit ceilings, 100 arbitrary licensing and
which translated into sectoral policies that supported
macroeconomic liberalization. Reform measures
adopted included the rationalization of tariffs, the
liberalization of investment in irrigation, the privatization
of trade in fertilizers, agricultural machinery imports,
seed delivery and 100food distribution systems,
98
price controls.
as well as management of agricultural research and
These policies did not result in a sustained extension systems. Moreover, reforms in farming
increase of production and productive efficiency; led to a shrinking role of the Government; this was
on the contrary, the gap between 29 demand for and reflected in the distribution of goods, the reduction of
supply of agricultural products widened over the subsidies, the liberalization of markets with producers’
price incentives, the gradual elimination and nar-
0
0
years. To find a way out of this crisis in the 1980s,
the country pursued a policy shift away from state rowing down of the public grain distribution system,
100
100
100
interventionism to more market -oriented policies price stabilization through open tender procurement
100 100 68
100
100 100
98
policies and the liberalization of food grain imports
by the private sector.
The liberalization efforts were not confined to
the agricultural sector. The whole economy began
to go through all-out liberalization, particularly after
the early 1990s, and became 100 one of the most rapidly
liberalized in the world. Although some claim that
this was done too rapidly, the World Bank observed,
“While trade liberalization occurred in fits and starts
43
in Bangladesh, stronger and more decisive commitment
to trade liberalization was seen in the majority
0
of the rest of the world. As a result Bangladesh lags
behind on most measures of trade openness. Even
after the reduction in nominal protection in the financial
year 2007 budget, Bangladesh has the 97 highest
100
64
100
100
CHART 1.
level of trade protection in the region, which itself is
BCI of
the most trade restrictive IEG of Czech region Rep. in the = 68,1 world”. 1
IEG of Cyprus = 65,1
República Checa = 99,2
Despite mounting pressure for more liberalization,
Global
Price Crisis
Climate
Change
Global
Financial Crisis
the results of past liberalization measures must
also be assessed. Did common people benefit from
the process of liberalization or were the only beneficiaries
some booming multinational giants? One
Global
Increased frequency
Reduced flow
of the major consequences of the all-out reforms
food price 100increase
and severity of
100
100
of remittances
natural disasters
has been increased dependency on imports, including
agricultural products. As a result, despite being
81
an agricultural nation, the country has been losing
control of the prices of many ordinary products that
0
Shortage of
Reduced
people need every day.
8
food supply
purchasing 0
0
capacity
The impact of the
NO
global
VA0
crises
92
37
89 95 The diagram in the opposite page illustrates the 99
100 100 78 100
100 100
100 100
100
impact of the inter-related global crises in climate
Increased
food insecurity, poverty
change, commodity prices and economic and financial
IEG of India = 40,7
and vulnerability
BCI of Irak = 88,4
crises on poverty and food insecurity.
IEG of Iraq = 0
100
100
7
7
Source: falta fuente falta fuente falta fuente!!!!
1 World Bank. Bangladesh: Strategy for Sustained Growth,
Bangladesh Development Series, 2007.
National reports 56 Social Watch
100 100
100