High level poverty is a major economic challenge before a developing country like Bangladesh. A large population, low level of literacy, high unemployment rate, resource constraint, inadequate infrastructure and frequent natural disasters are the main reasons behind poverty in Bangladesh. After the independence, poverty reduction and socio-economic improvement of people have been given a top priority in development plans and initiatives. The country has demonstrated a positive progress in reducing poverty on an average by 1.0 per cent a year since1990, but still approximately 11.0 per cent people live below the poverty line who are called extreme poor.
As a way out from poverty, efforts are required for sustainable employment generation and addressing multidimensional issues of poverty. Around 47 per cent of the total workforce in Bangladesh is engaged in the agriculture sector, which is characterised by seasonality, shadow and under employment etc. Farmers remain almost unemployed for a number of hours and months in a day and year respectively. Unemployment situation becomes severe during the lean period before the crop harvesting time which is called 'monga' or seasonal unemployment. It is also observed that around 40 per cent workforce is engaged in self-employment such as off-farm activities especially in rural areas. But most of these off-farm self-employment activities have been related to 'low growth and low return' cycle, mainly due to capital scarcity. Therefore, a sustainable financing mechanism was required to support these self-employed income-earning activities of poor people.
Bangladesh has a long history of informal lending and other forms of small loans such as borrowing from relatives, friends and money lenders for both self-employment activities and consumption purposes. Such lending or borrowing does not promote any employment creation for sustainable poverty reduction. Microfinance services in Bangladesh have been successful in providing millions of poor households with access to credit for engaging them in sustainable income generation activities. But microfinance is often criticised for not adequately addressing the extreme poor and seasonal crises. The problem of reaching the extreme poor is basically absence of flexible enough financial services, lack of regular cash inflow and paucity of non-financial services for the well-being of the extreme poor. Therefore, unless some mechanism is developed to address the problem, the extreme poor will always have difficulty in benefiting from the so called microfinance services.
The government of Bangladesh established the Palli Karma-Sahayak Foundation (PKSF) for employment generation through the provision of financial and non-financial services. The PKSF started a programme named Programmed Initiative for Monga Eradication (PRIME), a programme for the extreme poor, in 2006 aimed at supplementing the government's efforts for eradicating Monga (Seasonal unemployment in lean period) from the Rangpur division, the most vulnerable and poverty-stricken region of Bangladesh. The four critical areas were addressed from the inception of the programme. These were targeting the right extreme poor, flexible financial services along with ensuring non-financial support, scaling up and sustainability of the programme and disaster-coping management of the extreme poor. Target people have been selected through census and based on some specific selection criteria. Cash for work, skill training for income generation, awareness programme to cope with disaster, flexible savings and credit, health services, capacity building of the target people and Micro Finance Institutions(MFIs), cost-effective and climate-friendly technology transfer have been brought under the programme for sustainable development.
The selection of approximately 513,000 households who fall in the category of extreme poverty is one of the unique features of this programme. A benchmark study by an independent institute acknowledges the accuracy of targeting the households of the PKSF-financed extreme poor programme. With the change in poverty dynamics of the country after the devastating cyclones SIDR and Aila, the PRIME programme of PKSF has been extended to 156 unions of 15 upzila of the southwest part of Bangladesh. The research revealed that the average monthly income of programme participants increased by more than 100 per cent from its baseline. It also found 97 per cent PRIME households have found employment opportunities -- from occasional to full time -- during Monga period and 82 per cent were fully food-secure. Health-related expenditure has been reduced and productivity of the programme participants have been increased due to the integration of the health services in the programme. PRIME has a built-in disaster management system to cope with seasonal vulnerability as well as natural or other calamities. A rapid study found the success of PRIME participants is sustainable after the major shocks like flooding because of cash and non-cash interventions, awareness, asset creation and income diversification.
The government of Bangladesh and other agencies are trying to undertake more effective and target-oriented programmes for reducing extreme poverty. In doing so, a pragmatic approach, right selection, demand-driven skill training, effective disasters coping programmes, continuation of the interventions for certain period of time, credit along with non-financial services and regular effective monitoring are the key to sustainable poverty reduction of the extreme poor under PRIME of the PKSF.
The writer is General Manager, PKSF
khaled@pksf-bd.org
Addressing the extreme poor
Md. Hasan Khaled | Published: December 27, 2016 20:16:25 | Updated: October 21, 2017 06:28:06
Addressing the extreme poor
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