strategy for economic growth and poverty
Globalisation can help us overcome poverty quickly, if we can prepare our poor to participate in the globalised market. Most important thing is the participation. We must bring IT to the poor, to participate in and take advantage of globalisation. If we leave our poor at the mercy of the global forces without preparing them to ride on the tidal waves of globalisation, they'll get drowned by the globalisation...Actions to be taken to reduce poverty by half by 2015 are well-known. Just pick the strategic ones and go for them with full force.
disappointed, more so, hurt, by the way the strategy document has been
prepared. I am hurt because we may miss great national opportunity to
organise ourselves for the most important task ahead of the nation. But on
the positive side, I am glad that we have a document around which we can
hang our thoughts leading to the preparation of the real strategy
document. Reading the document I felt that it is not a strategy document,
it is an academic document. It could be better titled as: "All You Wanted
to Know About Poverty". An executive in charge of national poverty
reduction will have very little use of this document in taking decisions.
Every ministry of the government can continue to do whatever they have
been doing before this document was prepared, still no one can point
accusing fingers at them by
What would I have done if I had to draw up this strategy paper? I would have started out by suggesting the creation of a strong poverty monitoring outfit for continuous monitoring of poverty upazila by upazila.
I would have warned the government that if something cannot be monitored continuously, it cannot be achieved within a timeframe, just like a multi-million dollar construction work ---- you can finish it on time only because you monitor everything, every day.
I would have recommended that the government publicise the progress of the poverty reduction in each upazila, listing them in order of merit, every six months. By doing that government will create occasions for upazilas to celebrate their achievements, express their disappointments (even anger) for their failure, and prepare themselves to catch up with others. Government can encourage various enterprises to announce awards, prizes, honours, for achieving various achievements by upazilas, within each half yearly segment of the total time span.
Government can also encourage the business enterprises, social organisations to give awards and honours to persons, organisations, institutions for their special contribution in achieving specific results. They may even announce competitions.
I'd have also identified the programmes, organisations, institutions, ministries, agencies, policies, even persons, who made negative contribution to poverty reduction during the past 15 years. I'll grade them according to their negative contribution.
The reason why
I'd have done this, is a very simple one. On the basis of this
information, I'd recommend that in the coming 15 years government provide
all the support to assist the recognised "heroes" of the past so that they
can contribute more, that Government inspire others to follow their path,
help generate more innovative ideas. If the "heroes" of the past have more
ideas the government should go out of the way to provide them every
support to try out their new ideas. Obviously, at the same time government
should do everything in its capacity to restrain the "villains"
Poverty eradication is a simple task: In its basic form poverty eradication is a very simple task. We should never allow ourselves to be duped by the smart people to think that it is a complicated thing. It is not. First thing to remember is that poverty is not created by the poor people. It is created by the institutions and the policy environment created by the designers and managers of those institutions. There is nothing wrong with poor people. They can get out of poverty by themselves. All they need are opportunities. That's what State must provide. They need opportunities for earning income. That's all.
How does the State do it? Enhance the scope of wage employment. That's why
agriculture becomes so important in Bangladesh. The more dynamic this
sector becomes, the more wage opportunities are created for the poor. Of
course, agriculture alone cannot provide all the employment that is
needed. The more we rely exclusively on agriculture the more chances will
be that agricultural wage will be reduced to mere pittance, because
We'll have to create environment for more investment, and expansion of the existing industrial base. We need strong local government to create local investment opportunities. (Strong local government is needed for another important reason. The lower the tier of the local government, and the stronger it is, the greater is the opportunity for the poor to participate actively in it to get things done in their favour.
Another option is overseas employment. Injection of income from remittances has played a vital role in giving a boost to rural economy and poverty reduction. While we are busy bragging about how remittances are helping economy in improving the foreign exchange reserve, we have paid very little attention to mobilising these remittances for investments within the locality or within the country. Most of it is wasted away in hiking up the real estate value or extravagant expenses on social occasions. While we must put all our attention to ensure high growth in wage employment we must not forget that it is slow process.
Self-employment through microcredit: Luckily for us we have opened up another option which is almost limitless in scope --- that is self-employment. Microcredit is the vehicle which creates it. It has many attractive features. Over the last twenty-five years it has been studied by researchers in its every single aspect. They come up with very positive findings with regard to the impact of microcredit. They find steady movement of the borrowers from poverty to non-poverty, improvement in housing, sanitation, nutrition, education, child mortality, women empowerment etc.
At least 7
million poor families in Bangladesh have access to microcredit. Around Tk
5000 crore is disbursed each year as microcredit. In a country where
conventional banking is stuck with Tk 20,000 crore in overdue loans,
microcredit sector has created a financial service with near 100%
Best news about
microcredit is that they are sustainable; they can cover their cost from
their own income. They do not need budgetary allocation to keep them
afloat. Grameen Bank alone lends out nearly Tk 2000 crore each year. It
has stopped accepting donor money since 1995. It has stopped borrowing
money locally too. It generates enough deposits to carry out its credit
programme and pay back all the past loans without ever falling behind in
repayment even by a day. Currently 82 per cent of its outstanding loans is
financed from its deposits and own resources. By the year-end this
percentage will exceed 100%. During the next year, Grameen Bank will enter
into a phase where it will have more money in deposits, mostly from its
own borrowers, than outstanding loans, unless it expands its business.
Grameen Bank is owned by the borrowers. The borrowers come under life
insurance coverage, without paying any premium, by being a shareholder of
Professor Muhammad Yunus is the Managing Director of Grameen Bank.
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