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Bangladesh: Poverty Reduction Strategy Paper

Author(s):
International Monetary Fund. Asia and Pacific Dept
Published Date:
March 2013
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Chapter 7: Managing Regional Disparities for Shared Growth and Sustained Poverty Reduction

Introduction

Bangladesh has traditionally been viewed as a country with a common language, culture and heritage and a land which is mostly a deltaic plain formed at the mouth of the mighty rivers, namely the Ganges (Padma), the Brahmaputra (Jamuna) and the Meghna. This simplistic narrative of the country, viewed as a single homogeneous entity, actually has masked remarkable heterogeneity in socioeconomic outcomes in different regions.

Regional disparity in the course of economic development is a common observation in all the countries throughout the world, developing as well as developed. This is to a large extent unavoidable due to differences in initial conditions including location, human development and infrastructure. Some regions grow faster as compared to others, for a number of reasons, including but not limited to, better communication facilities, access to energy and natural resources, higher concentration of entrepreneurs and skilled labor force, etc.

The Government is very much concerned about regional disparities and is committed to take all necessary steps to reduce disparities. The Sixth Five Year Plan provides a strong platform to develop a strategy for lowering regional disparities over the longer term and to provide a policy framework for initiating proper actions. As a reflection of its concern and strong commitment, the Government has decided to put special focus on this subject in the Sixth Plan.

Aspects of Regional Disparity

Income, Growth and Poverty Indicators

Incidence of Poverty

As noted earlier, Bangladesh has made impressive gains in terms of poverty reduction over the last two decades. But the commendable performance in terms of poverty reduction at the national level has not been equally shared among its different components at the sub-national level. Table 7.1 shows that large differences exist between the rural and urban areas. This is also evident that the pace of poverty reduction differed among different divisions. For instance, between 2005 and 2000, the poverty head count rates fell less rapidly for the divisions of Barisal, Khulna and Rajshahi, and in some categories, these rates even increased. This is in sharp contrast to the cases of three other divisions, namely, Dhaka, Chittagong and Sylhet, which have experienced faster poverty reduction.

Table 7.1:Incidence of Poverty (head count rate) by Divisions, 1995-96 to 2010
2010200520001995-96
NationalRuralUrbanNationalRuralUrbanNationalRuralUrbanNationalRuralUrban
Upper Poverty Line
National31.535.221.340.043.828.448.952.335.253.156.735.0
Barisal39.439.239.952.054.140.453.155.132.059.960.647.7
Chittagong26.231.011.834.036.027.845.746.344.244.947.229.2
Dhaka30.538.818.032.039.020.246.755.928.252.058.933.6
Khulna32.131.035.845.746.543.245.146.438.551.751.553.3
Rajshahi29.729.032.651.252.345.256.758.544.562.265.733.9
Rangpur42.344.527.9
Sylhet28.130.515.033.836.118.642.441.949.6
Lower Poverty Line (Extreme Poverty)
National17.621.17.725.128.614.634.337.920.035.639.814.3
Barisal26.727.324.235.637.226.434.735.921.743.944.828.9
Chittagong13.116.24.016.118.78.127.530.117.132.435.312.1
Dhaka15.623.53.819.926.19.634.543.615.833.041.510.8
Khulna15.415.216.431.632.727.832.334.023.032.233.225.8
Rajshahi16.016.414.434.535.628.442.743.934.541.644.419.2
Rangpur27.729.417.2
Sylhet20.723.55.520.822.311.026.726.135.2
Source: HIES Reports, Various Years, Bangladesh Bureau of Statistics.
Source: HIES Reports, Various Years, Bangladesh Bureau of Statistics.

Head-count poverty measure of the recently conducted HIES 2010 data suggests reversal of poverty reduction trend found between 2005 and 2000. More specifically, between 2005 and 2010, head-count poverty declined more rapidly for the divisions of Barisal, Khulna and Rajshahi (i.e. more than 12 percentage points over the five year period). In contrast, the rate of poverty reduction is only 1.5 percentage points for the Dhaka division. The trend in poverty reduction rates between 2005 and 2010 suggests that regional disparity observed in previous household surveys with respect to head count poverty has narrowed significantly. A number of important factors contributed to this reversal:

  • Public policy emphasis and support for agriculture.
  • Easier communication between the North-West region to the rest of Bangladesh due to more efficient operation of the Jamuna Bridge.
  • Private sector investment as well as activities geared up in the North-West region taking advantage of the easier communication.
  • Increased coverage of the public sector infrastructure and safety net programs for the Southern region.
  • Migration of poor people from less economically active regions (i.e. Barisal and Khulna) of the country to Dhaka city.

In terms of number and density of poor population, Dhaka division has the highest density of poor population – 477 poor persons per square kilometer (Table 7.2) surpassing Rajshahi division which had the highest density of poor population in 2005 (i.e. 495 poor persons per square kilometer. Dhaka division has the highest figure for density of poor population, but at the same time it has the highest density of population per square kilometer, thus it has a higher number of poor people not because of higher level of poverty incidence, but because of large concentration of people, since it includes the geographical boundary of Dhaka city and its neighboring areas. Sylhet division has the lowest concentration of poor persons per square kilometer. Thus according to HIES 2010, Dhaka division is the most poverty-concentrated region in the country, followed by Rajshahi (including Rangpur), Barisal and Khulna divisions.

Table 7.2:Number and Density of Poor Population by Division, 2010
DivisionAreaPopulationPoverty IncidencePoor PopulationPopulation Density

(per sq. km)
Sq.KmPercentMillionPercentPercentMillionPercentPoorAll
Barisal13,2979.019.346.2939.43.687.86276703
Chittagong33,77122.8828.2919.0526.27.4115.84219838
Dhaka31,12021.0948.6432.7630.514.8531.734771563
Khulna22,27315.0917.6811.9132.15.6712.12255794
Rajshahi *34,51423.3935.3523.8135.712.6026.943651024
Sylhet12,5968.549.186.1928.12.585.52205729
Bangladesh147,571100148.48100.0031.546.79100.003171006
Source: HIES 2010.

including Rangpur Division

Source: HIES 2010.

including Rangpur Division

Regional Disparities in Human Development

The regional disparities in human development are less of a problem as compared with poverty. The results are seen in terms of education and health outcomes. The better-than expected achievements of the poorer divisions in terms of human development indicators is partly explained by the active role and presence of the NGOs in the relatively disadvantageous districts/Upazilas of the lagging regions.

Education achievements: Barisal, Khulna and Rajshahi divisions outperform the richer Dhaka, Chittagong and Sylhet divisions on most indicators of education achievements (Table 7.4). Indeed, Sylhet shows the worst performance in terms of education achievements.

Table 7.3:Key Education Outcomes, 2009
DivisionNet

Intake Rate in

Primary

Education
Net

Primary School

Attendance

Rate
Net

Secondary

School

Attendance

Rate
Proportion of

Pupils

Starting Grade 1

who reach Grade 5
Gender

Parity

Index:

Primary

School

(Girls/Boys)
Gender

Parity

Index:

Secondary

School

(Girls/Boys)
Barisal76.084.752.281.21.031.20
Chittagong63.278.445.580.21.021.19
Dhaka68.282.548.179.91.021.13
Khulna73.687.057.974.21.031.20
Rajshahi*66.381.352.381.41.041.18
Sylhet55.974.236.980.61.031.16
National66.881.349.079.81.031.17
Source: MICS (2009).

including Rangpur Division

Source: MICS (2009).

including Rangpur Division

Table 7.4:Trends in Infant Mortality Rate by Division, 1996-2008 1
199620032008
DivisionTotalRuralUrbanTotalRuralUrbanTotalRuralUrban
Barisal677551565944354018
Chittagong687650464836343433
Dhaka667852596440444835
Khulna657549464936353241
Rajshahi *697650555840515055
Sylhet667449586048393555
Source: SVRS (2008).

including Rangpur Division

Source: SVRS (2008).

including Rangpur Division

Health outcomes: In the area of health, Barisal and Khulna again show better performance than Dhaka, Chittagong and Sylhet (Tables 7.5-7.7). The poor performance in the relatively prosperous Sylhet is surprising. However, health outcomes are pretty bad in Rajshahi, which is a particularly poor division.

Table 7.5:Under 5 Mortality Rate, per 1,000 Live Births, 2008 1
DivisionTotalCategoryTotal
Barisal60Male72
Chittagong57Female55
Dhaka67Rural66
Khulna57Urban53
Rajshahi *67within urban:
Sylhet74Municipality59
City Corporation42
National64Slum95
Source: MICS (2009).

including Rangpur Division

Source: MICS (2009).

including Rangpur Division

Table 7.6:Maternal Mortality Ratio by Division, 2003 and 2008 1
20032008
DivisionTotalRuralUrbanTotalRuralUrban
Barisal4.674.684.543.774.412.02
Chittagong4.605.132.493.574.032.37
Dhaka2.873.092.413.303.812.36
Khulna3.053.222.243.394.141.97
Rajshahi*3.914.042.813.493.742.80
Sylhet5.075.173.943.813.843.70
Total3.483.932.42
Source: SVRS (2008).

including Rangpur Division

Divisional Level Mortality Data beyond 2008 not available

Source: SVRS (2008).

including Rangpur Division

Divisional Level Mortality Data beyond 2008 not available

Table 7.7:Road Density by District, 2000 to 2009(in meter per sq km)
Total Roads and Highways
RankingDistrict2000200420052009
1Shariatpur41.7341.7334.0534.47
2Rangamati40.5540.5545.4842.35
3Bhola149.87149.8774.4970.23
4Chuadanga97.5897.5879.6079.45
5Sunamganj72.2172.2178.7882.02
6Khulna71.2271.2285.5085.32
7Thakurgaon86.7986.7992.1091.21
8Patuakhali87.0587.0593.8596.10
9Maulavibazar120.04118.9797.3397.18
10Bagerhat88.6688.66102.39102.30
11Bandarban113.64113.64102.85102.70
12Chittagong232.44232.44179.15103.54
13Barguna122.27122.27104.50104.26
14Noakhali122.74122.74107.51108.03
15Mymensingh148.98148.98116.19112.08
Source: Estimates based on Statistical Yearbook of Bangladesh, 2009, BBS.
Source: Estimates based on Statistical Yearbook of Bangladesh, 2009, BBS.

Factors Affecting Regional Disparity

A large number of factors have played a role in shaping the regional disparity in the country. These are briefly reviewed below.

Access to Growth Centers

An important factor that may have contributed to the differences in regional poverty indicators is the issue of the “east-west” divide in terms of access to growth centers. This divide is defined in terms of location of the divisions with reference to the three rivers: the Jamuna, the Padma and the Meghna. Three divisions are on the western side of the rivers: Rajshahi, Khulna and Barisal. The other three divisions, Dhaka, Chittagong and Sylhet, are on the eastern side of the rivers.

Both the capital city Dhaka and the port city Chittagong are located on the eastern side of the natural barrier, and there are no cities on the western side which are as comparable to these cities. The primacy of Dhaka has been well established for a while. Chittagong also has grown in importance over time owing to the location of the country’s primary seaport. Both cities have large industrial areas surrounding each of them, and trade and services have flourished. The differences between these city locations and other lagging regions in terms of living standards are also noticeable. One finding mentions that households in Dhaka metropolitan city on an average have a consumption level that is 78 per cent higher than that of the rural households in Rajshahi division. On an average, travel time to Dhaka city is smaller for the eastern region districts than for the districts on the western side. Also there are differences in terms of percentage of mouzas with electricity connections, presence of Bangladesh Krishi Bank, any Commercial Bank, market or bazaar and any bank in the mouza in between the eastern part and the western part, and more favorable results for the eastern part. Finally, on average, a higher share of public spending tends to concentrate in these two cities.

Until recently the physical access of the cities of the Western Divisions to the growth centers of Dhaka and Chittagong was constrained by the dividing rivers. As transport infrastructure developed, especially as major bridges like Jamuna Bridge got built, the transport barrier was lowered and communication got better. The easier access to these two growth centers in recent years for the western districts has on average contributed to a more rapid expansion of economic activities resulting in better economic outcomes and causing a reduction in the living standard gaps between the western and eastern divisions indicated by the HIES 201021.

Natural Disasters and Weather Factors

Natural disasters such as flood and cyclones bring catastrophic damages to human, dwellings, crops, livestock, fisheries, physical assets etc. almost every year in some parts of Bangladesh. Natural disasters like floods and cyclones damage physical infrastructure as well as transport and communication system of the affected areas. Therefore the overall economies of the areas are destructed by these adverse events. Other types of natural disasters include drought, riverbank erosion and landslide etc. With a history of repeated cases of natural disasters, most disaster prone areas in the country are more likely to be poorer compared to other areas.

Bangladesh is divided into three zones according to flood inundation classification: 80 percent floodplains, 12 percent hills and 8 percent terraces. Monsoon or seasonal floods are generally beneficial for soil fertility and agricultural output. Floods turn into natural disasters when water level rises higher than the expected level and occur earlier or later than the usual timing. In the past two decades three major catastrophic floods affected a large portion of Bangladesh, damaging crops, livestock, houses and other infrastructure. According to Bangladesh Water Development Board, floods in 1988, 1998 and 2004 affected 84 percent, 68 percent and 36 percent of total area respectively.

Southern parts of Bangladesh especially coastal districts of Chittagong, Barisal and Khulna western districts catastrophic cyclone in the last two decades which caused death of more than 138 thousand people. More recently cyclone Sidr destructed a major portion of Khulna and Barisal Division in November 2007. Due to some protective measures adopted by the government and local people it is now possible to minimize human casualties during catastrophic cyclones.

Western districts of Bangladesh are susceptible to drought due to lack of rainfall. Prolonged rainless days during Kharif or Rabi season can appear as drought. Drought prone areas are divided into five classes according to their severity. About 0.58 million hectare land in Rajshahi and Nawabganj districts are considered as the most severely drought prone areas. Drought may cause fall in agricultural production if it continues for long extended period.

Access to Energy

Availability of energy plays a critically important role in helping develop regional economies. Due to the primacy of Dhaka and Chittagong, the availability of electricity has been more pronounced in the eastern districts than in the western and southern districts. Similarly, there are substantial differences in terms of availability of natural gas. Large areas of the northern and the southern parts of the country still do not have natural gas coverage.

Availability of Transport and Communication System

Table 7.7 provides data of road density of districts measured in terms of meters of road per square kilometer area. Evidence shows that on average the southern and western districts tend to have lower road density than the eastern districts22. However, more recently, with the construction of the Jamuna Multipurpose Bridge, the western and north-western districts have been better connected with the capital, which definitely has contributed to the regional development of the north western areas.

An important communication infrastructure with substantial positive spillover effects on economic growth is the location of the port facilities. Bangladesh has two sea ports, one in Chittagong and the other in Mongla (Khulna). For over a long time Chittagong continues to dominate the handling of international trade. Indeed, the share of Mongla port is actually shrinking both in terms of the absolute values and the relative shares. The rapid loss of importance of Mongla port needs to be reversed both for helping the growth of Bangladesh as well as contribute to more balanced regional development.

Availability of Financial Infrastructure

Financial institutions (e.g. banks, MFIs) can play an important role in reducing poverty and regional inequality. High density of bank branches is indicative of vibrant economic activities. The density of bank branches varies from as high as 12.4 (number of bank branches per lac population) in Dhaka district to as low as 2.30 as in Kurigram district (Table 7.8). In general, the spread of banking activities tend to be tends to be much more concentrated in Dhaka and Sylhet divisions as compared with Rajshahi and Khulna.

Table 7.8:Density of Bank Branches(Branches per 100,000 population)
RankingDistrictDivisionNo. of Reporting BranchesAvailability (Per 100,000 Population)
1KurigramRajshahi482.30
2MymensinghDhaka1292.48
3SherpurDhaka372.54
4NetrokonaDhaka592.60
5GaibandhaRajshahi722.90
6KishorganjDhaka862.91
7BholaBarisal593.01
8LalmonirhatRajshahi413.22
9JamalpurDhaka833.39
10NilphamariRajshahi633.47
11SunamganjSylhet813.51
12SatkhiraKhulna763.52
13TangailDhaka1363.57
14KhagrachhariChittagong223.58
15MadaripurDhaka483.61
National73905.12
Source: Scheduled Bank Statistics, April-June 2010, Bangladesh Bank.
Source: Scheduled Bank Statistics, April-June 2010, Bangladesh Bank.

Table 7.9 shows per capita deposits and advances as on June 2010. The Table shows that there are large differences among the divisions in terms of both per capita advances and deposits. Advances and deposits in all the other divisions are very low relative to Dhaka and Chittagong indicating the low level of depth of financial intermediation in the lagging districts. Sylhet division exhibits high per capita deposits but low per capita advances. This is explained by the fact that Sylhet receives huge amount of remittances from abroad and possibly require less loans from banks in relation to available economic opportunities.

Table 7.9:Per Capita Deposits and Advances by Division, 2009 and 2010
30th June 201030th June 2009
DivisionPer Capita

Deposits
Per Capita

Advance
Per Capita DepositsPer Capita Advance
Barisal5,8072,8315,0372,464
Rajshahi6,8634,9854,8003,531
Sylhet17,1874,46115,6053,703
Khulna8,2396,6187,1125,621
Chittagong23,03618,24019,27414,714
Dhaka48,28638,17039,89131,502
Rangpur3,8033,614
National23,43817,85419,62214,681
Source: Scheduled Bank Statistics, Bangladesh Bank, Various Issues.
Source: Scheduled Bank Statistics, Bangladesh Bank, Various Issues.

A review of micro-credit coverage however suggests that the coverage is relatively higher in the lagging regions. For example, around 28 percent of population (economically active) is covered in the Rajshahi division whereas the corresponding figure for Chittagong division is 17 percent.

This is not a surprising finding. Microcredit programs are designed to improve the access to finance for the rural poor. As such, microfinance coverage is expected to be high in poor areas and low in well-off areas. Nevertheless, the demand for microcredit much exceeds the present supply and coverage of microcredit schemes. As a result, some of the poorest districts have very low coverage of micro credit programs. These include all the three hill districts of Chittagong division, Habiganj and Sunamganj districts of Sylhet division, and Mymensingh district of Dhaka division. All these districts have high incidence of poverty (HC>0.47) but have relatively low coverage of micro credit programs.

Access to International Migration and Foreign Remittances

Inflow of foreign remittances is the single most important informal safety net program in Bangladesh. It has been a major factor in helping Bangladesh to reduce poverty since the 1990s. According to Ministry of Expatriates’ Welfare and Overseas Employment 5.575million Bangladeshi workers were working abroad as of June 2009 and every year around 0.5 million people are migrating with overseas employment. In the fiscal year 2009 the country received 9.7 billion USD as workers’ remittances, which is 151 per cent higher than the comparable figure of 2005. Remittance is now contributing 11.15% to the GDP which is 6 times higher than the ODA and 13 times higher than the FDI. Such growth of workers’ remittances contributed to the well being of remittance receiving households. Since households having expatriate workers are highly concentrated in some areas of the country relative to others, the excluded or marginally included regions have gained little from inward foreign remittances of the country (Table 7.10). Chittagong and Dhaka divisions dominate the share of expatriate workers; around 78 per cent of total expatriate workers belong to these two divisions. In terms of total population Chittagong division has the highest proportion of its population working abroad (7.7 percent) followed by Sylhet division (4.28 per cent), both surpassing Dhaka division (4.04 per cent). On the other hand, less than one per cent of Rajshahi division’s and little less than 1.5 per cent of Khulna division’s population are working abroad. Barisal does better, but still lags behind the more prosperous eastern divisions.

Table 7.10:Division Wise Distribution of Expatriate Workers 1976-2007
DivisionNo. of ExpatriatesAs Per Cent of PopulationAs Per Cent of total

expatriates
Barisal193,5102.064.0
Chittagong2,135,4987.7042.2
Dhaka1,806,5934.0435.7
Khulna235,5461.414.7
Rajshahi316,3000.916.3
Sylhet391,0874.287.7
Total5,078,5343.57
Source: Ministry of Expatriates’ Welfare and Overseas Employment.
Source: Ministry of Expatriates’ Welfare and Overseas Employment.

Empirical evidence shows that there is a significant correlation between district level poverty head count rates and share of expatriate workers. Data pertaining to district wise distribution of migrant workers shows that most of districts of Rajshahi divisions have less than one per cent of their population working abroad. Though Chittagong division has the highest share of expatriate workers, the three hill districts of these divisions have very small number of expatriate workers. Indeed, a key factor underlying the more favorable poverty outcomes in Sylhet is the large inflow of remittances that have helped finance consumption even though per capita income flows have grown below the national average.

Specific Targets for Reduction of Regional Disparity in the Sfyp

The Government of Bangladesh is committed to economic development with equity and social justice. Accordingly it is conscious of the need to take all possible measures to ensure that the benefits of development are distributed equitably across regions. Efforts to reduce regional imbalances in growth and poverty will be redoubled during the Sixth Plan period.

In order to measure progress with reduction of regional disparities, the Sixth Plan will establish benchmarks and targets for poverty reduction, income and human development at the regional level. These targets are indicative in nature and are used to provide a reference point to measure progress rather than fixed commitments.

Target 1: Poverty Head Count Rates

The first target is for the poverty line (Table 7.11) for the plan period. For the base year 2010, the divisions of Barisal, Khulna and Rajshahi have poverty head count rates higher than the national average, while, Chittagong, Dhaka and Sylhet divisions have lower head count rates than the national average. The first regional disparity reduction target is to reduce the gap between the poverty head count rates of lagging divisions with the average national head count rates by 75% over the end of the SFYP period (FY15). What this implies is that the SFYP will seek to achieve the target set for overall national poverty reduction in a manner such that poverty reduces at a faster pace in the lagging regions as compared with the leading regions. The targets are defined with reference to both the upper and lower poverty lines.

Table 7.11:Target 1- Head Count Poverty
Target 1.1 Upper Poverty Head Count
200020052010 (Base)2015 (Projected)2015 (Target)
NationalRuralUrbanNationalRuralUrbanNationalRuralUrbanNationalRuralUrbanNationalRuralUrban
National48.952.335.24043.828.431.535.221.324.828.316.022.525.314.1
Barisal53.155.1325254.140.439.439.239.931.031.529.924.927.418.4
Chittagong45.746.344.2343627.826.23111.820.624.98.919.423.48.4
Dhaka46.755.928.2323920.230.538.81824.031.213.522.627.312.7
Khulna45.146.438.545.746.543.232.13135.825.324.926.923.423.417.6
Rajshahi *56.758.544.551.252.345.235.736.630.728.129.423.024.126.916.7
Sylhet42.441.949.633.836.118.628.130.51522.124.511.320.823.110.6
48.94031.524.822.5
Target 1.2 Lower Poverty Head Count
200020052010 (Base)2015 (Projected)2015 (Target)
NationalRuralUrbanNationalRuralUrbanNationalRuralUrbanNationalRuralUrbanNationalRuralUrban
National34.337.92025.128.614.617.621.17.712.315.64.111.514.73.5
Barisal34.735.921.735.637.226.426.727.324.218.720.112.813.916.76.2
Chittagong27.530.117.116.118.78.113.116.249.212.02.19.212.02.1
Dhaka34.543.615.819.926.19.615.623.53.810.917.32.010.916.02.0
Khulna32.3342331.632.727.815.415.216.410.811.28.612.011.25.2
Rajshahi*42.743.934.534.535.628.421.622.715.615.116.78.213.015.95.1
Sylhet26.726.135.220.822.31120.723.55.514.517.32.912.916.02.9
34.325.117.612.311.5
Source: HIES various rounds and SFYP Projections.

including Rangpur Division

Source: HIES various rounds and SFYP Projections.

including Rangpur Division

Target 2: Monthly Household Income

Poverty reduction target cannot achieve or sustained unless this is backed up by policies and measures to increase the income of the target group. Table 7.12 illustrates the target monthly average household income so as to reduce the gap by 75% between the values of monthly household incomes in the lagging regions and that of the national average.

Table 7.12:Target 2 Monthly Household Income (Taka)
BaseProjectedTarget
2005201020152015
National 237,2038,88110,95011,239
Barisal6,0947,5149,2649,686
Chittagong8,65410,67013,15613,156
Dhaka7,9499,80112,08412,084
Khulna6,0067,4059,1309,585
Rajshahi*5,8647,2308,9159,423
Sylhet8,31510,25212,64112,641

Including Rangpur Division

Including Rangpur Division

Target 3: Health Outcomes

Three targets have been constructed for health outcomes to be achieved by the end of the sixth five year plan period. These targets concern maternal mortality rate, infant mortality rate and under-five mortality rate. Targets here are aimed at reducing gaps between the outcomes in the lagging regions and that of the national average (Tables 7.13-7.15).

Table 7.13:Target 3.1 Maternal Mortality Ratio
20072010 Projected2015 Projected2015 Target
DivisionTotalRuralUrbanTotalRuralUrbanTotalRuralUrbanTotalRuralUrban
Barisal5.45.55.25.25.24.94.84.84.63.53.63.4
Chittagong3.03.31.92.93.21.82.72.91.72.72.91.7
Dhaka2.73.11.62.63.01.52.42.81.42.42.81.4
Khulna4.94.94.74.74.74.54.34.44.23.43.53.3
Rajshahi3.53.81.43.43.71.43.13.41.33.13.41.3
Sylhet5.65.74.55.35.54.34.95.14.03.63.72.9
National3.53.92.23.43.62.43.13.32.22.93.12.0
Table 7.14:Target 3.2 Infant Mortality Rate
20072010 Projected2015 Projected2015 Target
DivisionTotalRuralUrbanTotalRuralUrbanTotalRuralUrbanTotalRuralUrban
Barisal37382537.939.827.030.932.422.030.932.422.0
Chittagong42443634.235.429.627.928.824.127.928.924.1
Dhaka46464440.342.133.832.934.327.631.532.926.4
Khulna27263530.831.727.525.125.922.525.125.822.4
Rajshahi48465841.142.733.133.534.827.031.632.925.5
Sylhet46491840.842.133.833.334.327.631.632.526.2
National43434238.039.732.431.032.426.430.031.425.6
Table 7.15:Target 3.3 Under Five (5) Mortality Rate
20072010 Projection2015 Projection2015 Target
DivisionTotalRuralUrbanTotalRuralUrbanTotalRuralUrbanTotalRuralUrban
Barisal63.365.846.053.655.739.040.141.729.238.640.128.0
Chittagong66.569.754.656.359.046.342.144.134.639.140.932.1
Dhaka59.460.856.050.351.547.437.638.535.537.638.535.4
Khulna40.140.040.734.033.934.525.425.325.825.425.325.8
Rajshahi65.064.767.555.154.857.241.241.042.838.838.640.3
Sylhet57.663.320.448.853.717.336.540.112.936.540.112.9
National60.161.654.250.952.245.938.139.034.336.737.733.1

Target 4: Education Outcomes

Three targets have been constructed for education outcomes to be achieved by the end of the sixth five year plan period, and these are targets in net enrolment rates (in entering the primary education, in class 1, combined of boys and girls) and survival rate in primary education (the rate at which a boy or girl student who gets admitted in class 1 reach class 5 (not necessarily completes class 5, which is a different indicator, called the completion rate)). The targets here are aimed at reducing gaps between the outcomes in the lagging regions and those of the national average (Tables 7.17- 7.18).

Table 7.16:Target 4.1 Net Enrolment Rate
Division200620072010 Projected2015 Projected2015 Target
Rajshahi90.390.893.299.5100.0
Khulna95.394.397.6100.0100.0
Dhaka89.489.992.398.5100.0
Chittagong90.589.892.899.1100.0
Barisal93.895.097.2100.0100.0
Sylhet90.791.793.9100.0100.0
National90.991.193.7100.0100.0
Table 7.17:Target 4.2 Survival Rate in Primary Education
Division200620072010 Projected2015 Projected2015 Target
Rajshahi45.547.548.751.255.3
Khulna55.056.558.461.461.4
Dhaka51.051.053.456.156.5
Chittagong55.256.258.361.361.3
Barisal52.757.757.860.860.8
Sylhet45.650.150.152.755.6
National50.752.253.956.657.9

SFYP Strategies and Policies to Address Regional Disparities

Achievement of the specific targets for reducing regional disparities will require well thought out strategies and policies in the Sixth Plan to ensure that the growth process is inclusive and that the human development and other poverty reduction policies are sensitive to the needs of the lagging regions. In addition to national policies, the location of most lagging regions on the border areas with India suggests that a policy of more and better regional cooperation with India will help promote growth and investment in these border districts by strengthening access and connection to growth centers across the border.

On the national policy front public investment and financial sector policies are of particular importance in addressing the lagging regions problems. Available recent data from the Ministry of Finance indicate that the lagging districts get a relatively lower share of the development expenditures in per capita terms. Lagging areas also have limited access to finance relative to economically more advanced areas with substantially lower per capita deposits and advances as well as lower density of bank branches. Both these issues bear critical policy implications for balanced regional growth strategies.

One important policy initiative to address regional disparity would be to establish a separate fund in the framework of the annual development program for supporting the development of the lagging regions. In addition, emphasis should be given to projects that address regional inequalities in the selection of projects.

In view of the importance of addressing the lagging regions problem, the idea of setting up an institutional arrangement will be explored to oversee the progress of regional development and formulate strategies, policies and programs towards equalizing growth within the country. Any policy intervention at the regional level should be backed by adequate data and related information. Therefore a set of indicators at the regional level and other policy related dataset should be created to formulate policy and monitor the development process. In this regard, the Government will place special emphasis to tackle the special problems of the coastal regions such as Barisal that face tremendous risks of natural disasters owing to geography (Box 7.1).

Box 7.1:Paying Special Attention to the Problems of the Coastal Region of Barisal Division

Despite recent progress, the head count poverty is the highest in Barisal, which is predominantly a coastal region. Among other adverse factors, the large incidence of natural disasters is a major detrimental factor to growth and poverty reduction in Barisal. The onslaught of the Sidr and Aila cyclones and associated damages to the Barisal economy in the recent years are striking examples of this vulnerability. Moreover, being a coastal region, Barisal faces a higher risk of the adverse effects of climate change.

To address these concerns, in addition to policies and programs to remove the constraints of lagging regions in general, the Sixth Plan will seek to reduce the vulnerabilities of Barisal and other coastal belt regions through focused programs in agriculture, environment, climate change and disaster management.

Specifically, the comprehensive program will include: (i) development of infrastructure; (ii) increasing crop and non-crop agriculture production that are best suited to the climate of the coastal belt; (iii) development of small and cottage industries using the energy from the solar system; (iv) provision of agricultural credits and micro-credits (v) improvement of existing waterways; (vi) programs to strengthen human development focused on the poor; vii) ensuring better access to safe drinking water; and (viii) enhanced preparedness for natural disasters.

Some of the specific policies and actions that will be taken in the SFYP to address the regional disparity issue are discussed below.

Development of Infrastructure

Improvement of infrastructural facilities is one of the key interventions that will open the door of economic opportunities in the lagging regions. Following measures will be taken.

  • Communication system between the better off regions and lagging regions would be improved in order to increase economic activities in the lagging regions. One of the major communication projects, construction of Padma Bridge, is expected to open a new door of opportunities for the south-west region.
  • Better connectivity with growth centers in neighboring countries through regional cooperation efforts will be important.
  • Appropriate measures would be adopted for intensive utilization of Mongla port. The implementation of transit access to the neighboring countries (India, Bhutan and Nepal) will be of immense benefit to the revitalization of the Mongla Port.
  • Creation of export oriented industrial zone near the Mongla port will be considered with special emphasis to direct foreign investment.
  • Supply of electricity would be increased in the lagging regions on a priority basis.
  • Construction of gas transmission line to the lagging regions would be expedited.
  • Both inter district and intra district road communication system would be developed to increase economic mobility within the lagging regions.
  • Intensity of bank branches would be increased in the lagging divisions to increase financial services for general people as well as investors of the regions.
  • Communication system in three hill districts would be developed to create economic opportunities for these areas.
  • The long-term dredging programs of inland waterways would be expedited.
  • Block allocation for local government institutions for infrastructure development in lagging regions, particularly in lagging districts, would be enhanced.
  • Emphasis will be given to the completion of the upazila connecting roads in Barisal, Rajshahi and Khulna divisions.

Industrialization in Lagging Regions

  • Industrialization will be promoted in the lagging regions to create jobs. Since private investment has less of an incentive to locate itself in these regions, this process needs to be implemented with the help of government support at least in the initial stages.
  • Industrial policy would be made flexible to support investment in lagging regions.
  • Industrial zones would be established in lagging regions with all adequate infrastructural facilities so that entrepreneurs can get benefit from economies of scale. Construction of industrial park at Sirajganj would be expedited and other industrial zones would be established. Promulgation of special incentive for prospective investors would proceed simultaneous to encourage faster investment in this industrial park.
  • Small and medium enterprises would be encouraged with low cost financing facilities. Rate of interest for bank finances would be lower in the lagging regions which will increase investment,
  • Special fiscal incentive such as tax holidays would be offered on a selective basis for high-priority private investment in the lagging districts.
  • Steps would be taken to establish indigenous and export oriented industries in the lagging regions of the country.
  • SME credit facilities will be used to promote indigenous small and medium industries in the poorer divisions, which use local raw materials such as food processing to meet the local demand. This will facilitate the use of local raw materials and employment generation which in turn will reduce poverty.

Development of Agriculture and Rural Economic Activities

Even though the share of agriculture in GDP is shrinking over time, still this is the focus point of the rural economy. Special emphasis will be given to development of agro-processing, non-farm economic activities in the lagging regions. Following steps can be taken:

  • Careful attention would be given to removing the specific constraints and vulnerabilities to farm production and agricultural incomes in the lagging regions in terms of weak rural infrastructure (power, rural roads and irrigation) and adverse effects of natural disasters (floods and droughts). This would be done in the context of allocation of Sixth Plan resources as well as through special programs for the lagging regions. Improved farm productivity and income in the lagging regions will go a long way to reduce regional imbalances and lower rural poverty.
  • The farmers in the poorest Upazilas would get priority in terms of agricultural subsidy. The Government will explore the possibility of increasing the provision of agricultural loan at a lower interest rate in the poorest Upazilas.
  • Efforts will be made to expand BR-33 rice and cassava cultivation in the lagging regions, especially in the Monga areas.
  • Emphasis will be given to support the expansion of storage facilities for the poor and marginal farmers to for preserving their fish and agricultural products in order to get suitable price for their product in the market.
  • Microfinance institutions will be encouraged to operate in poverty prone areas by providing special incentives, e.g. providing fund to MFIs at low rate of interest if they disburse this fund in poor regions.
  • Policy measures will be taken to attract microfinance in environmentally vulnerable areas such as cyclone prone coastal areas, land logged and other flood prone areas and Monga prone areas.
  • Nonfarm economic activities will be promoted in the lagging districts through providing training and financing facilities. Partnership between the government and MFIs/NGOs can play an important role in this regard.
  • Local government institutions such as Union Parishads would be strengthened to conduct rural development activities of the government through these institutions.

Creating Opportunities for International Migration

The flow of remittance earnings is amongst the most potent way for improving the local economy. As was noted earlier, the flow of remittance earnings is low in the lagging regions. Following measures would be taken to promote labor migration from lagging regions:

  • Technical and vocational training institutions for specific skills would be established in the lagging regions based on a careful review of the external demand for skills.
  • Special financing scheme would be directed to support prospective migrants from lagging regions.
  • Special attention would be given to export manpower on a large scale from Monga and other under-privileged areas.
  • Logistic support and technical advice will be provided to potential migrant workers through establishment of foreign employment exchanges in the lagging districts in cooperation with private sector.

Human Development and Social Protection Policies

An important way to redress the lagging regions problems is to offset the initial disadvantage in regards to human capital. As noted many of the lagging divisions have already made progress in improving human development and even having better performance than the better off divisions. The target for human development will be set for lagging regions at the district and upazila level. With proper investment in human capital, the skills constraint in the lagging can be substantially eased.

  • Priority will be given to the lagging districts/Upazilas in the location of school and health facilities. Additionally, policies will be taken to ensure the availability of teachers and medical personnel in the lagging regions.
  • Special emphasis will be placed on girl’s education in lagging regions. This will help increase female labor participation as well as improve family welfare.
  • The design of social protection schemes including employment guarantee schemes would consider the location issue very carefully, putting priority to the availability of these schemes in the lagging regions.
  • Partnerships with NGOs will be particularly helpful in reaching out the lagging regions, especially those areas that have geographical disadvantages in terms of small size and dispersed population as well as distance and remoteness.

Monitoring and Evaluation

  • A well-functioning institutional mechanism would be established within the government (possibly assigned to the Planning Commission) to address all issues of spatial inequality in Bangladesh. The designated institution would monitor regularly the situation of the poverty stricken areas including the Monga areas and suggest measures for early preparation.
  • The institution will monitor and coordinate implementation of on-going projects and programs in these areas.
  • Solid analytical work on various dimensions of lagging regions and possible policy options would need to be developed to help the government in designing specific interventions.
  • A proper benchmark and database of indicators will be established to monitor implementation progress.
21The qualifier “on average” is important because there are a number of very poor districts on the Eastern side of the country. Also, on average eastern districts tend to be more densely populated than the western districts making poverty reduction that much more challenging in the eastern districts.
22Data are for roads maintained by the Roads and Highways Department only and does not include rural roads and town roads maintained by the Local Government and Engineering Department
23National average household monthly income was TK. 5,842 in 2000.

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