51pc of poor in cities ‘New Poor’: BIDS

A staggering 51 per cent of the people living below the poverty line in cities are ‘new poor’, according to a study conducted by Bangladesh Institute of Development Studies (BIDS).

The statistic was disclosed during the BIDS Research Almanac 2023 at a hotel in Dhaka’s Gulshan on Wednesday. The institute’s director general Binayak Sen disclosed this information during the opening speech of the conference.

“50 per cent of the total poor population are ‘new poor’. They have gone down from the lower middle-class. We must pay attention to this crisis-hit class,” Binayak said.

He further added that in the post-Covid period, entrepreneurship has played a huge role in reducing poverty. Those who had some savings, used it for self-employment. Furthermore, integration of digital technologies, especially mobile financial services (MFS), have helped reduce poverty.

BIDS conducted a survey on 2,046 households for this study. The report said that in 2019, before the Covid-19 pandemic, the rate of self-employment among the poor population was 33.60 per cent. In 2022, post-Covid, the rate increased to 38.56 per cent.

Meanwhile, the rate of self-employment among the extreme poverty-stricken population was 15.47 per cent before the pandemic. Since the pandemic, it has risen to 33.21 per cent.

The study further said that in 2019, 39.29 per cent of households would use MFS. In 2022, the rate doubled to 78.78 per cent. However, the rate of bank accounts has remained low. Pre-Covid, 32.22 per cent of households had at least one bank account. Post-Covid, the rate has slightly increased to 33.79 per cent.

The extreme poverty-stricken families are also using MFS more than before. In 2019, 15.15 per cent of households used MFS. After the pandemic the rate has increased to 66.67 per cent, which is more than four times the previous amount.

Binayak Sen said in his speech, many children dropped out of school during the pandemic. This tendency was higher among low-income families. In cities, social security measures are limited, hence more attention needs to be paid in this area, said the BIDS director general.

Planning minister MA Mannan was the chief guest of the conference. He said, “When wealth is created, inequality is unavoidable. We are working to reduce disparity. As part of that, we are providing allowances like old-age allowance and widow allowance.”

“If we can ensure equal opportunities then we can reduce discrimination. We are trying to do exactly that,” he added.