The New Nation - Internet Edition

RATES of poverty in Bangladesh in all its dimensions have reportedly fallen significantly. A recent report on the situation of poverty reduction released by International Food Policy Research Institute (IFPRI) showed this positive trend in Bangladesh's efforts in this respect. According to Bangladesh Economic Review 2007, the percentage of people living in absolute poverty decreased from 47 in 1991-92 to 40 in 2005. On the other hand, percentage of people living in hard-core poverty has come down to 19 in 2005 from 28 in 1991-92. This also shows a significant progress in Bangladesh's efforts to reduce poverty. But, according to IFPRI, Bangladesh could not convert her economic growth proportionately into poverty alleviation. She, along with other South Asian countries where 19.7 million or 12 percent of the world's poor live, was less able than any other country in the East Asia and the Pacific region to convert her economic growth into poverty reduction, principally due to lack of income distribution.

According to the Economic Review, GDP growth of the country has achieved significant progress in recent years. It developed to Tk 4,67,497 crore in 2006-07 from Tk 3,70,707 crore in 2004-05, showing annual growth rates of 6.0 and 6.5 in 2004-05 and 2006-07 respectively. The foreign exchange reserve grew from US$ 1602 million in 2000 to US$ 4360m up to mid-May 2007 and more subsequently. As of date, foreign exchange reserve has risen to above US$ 5 billion. Remittances from Bangladeshi expatriates have also grown from US$ 1217 million in 1995-96 to US$ 3824m in 2006-07. Many industrialists and business tycoons in Bangladesh have been doing booming business leading to a significant growth of their wealth. But in the absence of equitable distribution, the workers are deprived of sufficient wages as they deserve in view of the growth. The workers of some readymade garment industries, according to BGMEA itself, are not getting even the minimum wages fixed under the tripartite agreement. Recently a few thousand jute mill workers lost their jobs. The poor and marginalised people hit by the recent floods have lost properties and become unemployed. A large number of hawkers have lost whatever meagre investible surplus they had. All of these together have cast a shadow on whatever successes Bangladesh has achieved.

The economic growth of a country needs to be transformed into economic development characterised by equitable distribution of wealth resulting in reduction of poverty and defusion of social tension. But due to lack of a fair distribution of wealth, a lion's share has concentrated in the hands of a minority of the population, whereas a great part of the poor, marginalised and unemployed masses is engaged in hard struggle to eke out an existence. By ensuring an equitable distribution system, among others, it would be possible on the part of Bangladesh to take its poor sections of the people out of the vicious cycle of unemployment and poverty. Huge investments to pave the way for massive industrialisation and development of agriculture, commerce, handicraft and service sectors are expected to create employment opportunities and help reduce poverty. It is hoped that all concerned quarters would give due attention to equitable distribution of the benefits of economic growth that has accelerated in recent years with a view to reducing poverty at a greater speed.

ACCORDING to an AFP news agency report from Paris the other day, the rich world's energy watchdog painted a 'bleak picture of the next two decades' with the world's dependence on fossil fuels set to rocket at a time of global alarm about climate change. The International Energy Agency, an adviser to 26 countries, issued its World Energy Outlook 2007 report identifying the long-term trends that will shape energy policy up to 2030. Coal will make a comeback, the Middle East and Russia will grow in influence as oil suppliers, and emerging giants like China and India will account for most of the increase in energy demand. The trends in energy demand, coal use and greenhouse gas emissions shown in this year's World Energy Outlook are even worse than projected in WEO 2006, the International Energy Agency warns.

As reported by the news agency, it gave little hope to those looking for a technological breakthrough, which many believe is necessary for a meaningful reduction in world greenhouse gas emissions. The Paris-based research centre did not identify a clean, new source of energy that can provide the power needed to fuel improvements in living conditions for the world's poor without damaging the environment. Instead, it predicted that coal, one of the oldest and dirtiest sources of energy, would be more in China and India in 2030. In line with its spectacular growth over the past few years, coal sees the biggest increase in demand in absolute terms, jumping by 73 per cent between 2005 and 2030, the agency said. China and India, which already account for 45 per cent of world coal use, would take over four-fifths of the increase in its use by 2030. The 663-page IEA report was packed with alarming statistics based on a 'reference scenario' in which energy consumption continues on current trends without government measures to reduce demand and greenhouse gas emissions. Under this model, energy demand increases by more than 50 per cent up to 2030, with 84 per cent of the new demand supplied from fossil fuels.

China and India's energy needs measured in tonnes of oil equivalent, more than double from 2005-2030. China's energy demand surpasses that of the United States after 2010 and its pollution problems worsen. China is also set to become the world's biggest emitter of greenhouse gas emissions this year, an IEA report said. Coal-fired power stations have been the primary cause of the surge in global emissions in the last few years and new power stations in China and India are likely to be mostly coal-fired. Because of this, the IEA urged governments to focus on development of clean coal technologies, in particular carbon capture and sequestration, which entails capturing carbon and storing it underground. According to its calculations, if governments do not take further action the world's temperature could rise by six degrees Centigrade beyond 2030, IEA research chief predicted as quoted by the news agency.

Dr. M. Azizur Rahman

In the recent past, inflationary environment of Bangladesh used to be characterised by price stability. Prices used to be rising slowly and predictably. However, very recently international inflation has had a severe impact on inflation in Bangladesh moving from a double digit- towards a galloping inflation of 20% or over, which is a stagflation - high level of unemployment and low level of economic growth. Analysis shows that inflation has adverse impact on the real economy including redistribution of income and wealth among different groups.

Stagflation is fairly a high rate of inflation even when we have a slow rate of economic growth, lower level of output and income, lower production of goods and services with a high unemployment and idle-capacity. Usually, stagflation occurs when we have a cost push inflation, or a higher inflation due to increase in the cost of production or import prices of goods and services including those of intermediate goods that are used in production.

Higher inflation and higher unemployment are going together, the main cause of which is the higher cost of production. Higher cost of production is attributed to higher prices of energies and oil since the U.S. invasion to Iraq four years ago. Oil price used to be $6 per barrel during 1973, which is about $100 per barrel in this month of November /2007.

The economic stage of stagflation has been complicated this year by flood, river-erosion. rainfall and drought and crop damage. The political instability has been added as one among the few significant reasons for lower economic growth. The engine of production and supply of goods and services and manufacturing business have lost its confidence in investment in the present regime for a severe move for anti-corruption. Stakeholders or investors are simply scared for being caught probably for their black money to invest.

What is really happening is that attempt of anti-corruption is too quick and too hard to cure the economy. We have to have a device to provide a better treatment. Otherwise, the economy may be in more trouble. We may not be able to avoid a possibility of an economic crash. Hopefully, the Government is thinking of Truth Commission to rescue the lass and help grow the business and the economy not by killing the business. This might be a good idea.

The rate .of GDP growth remaining substantially too law to accept may be from 2% to 4% far the next decade from now. Due to higher price and decreased competitiveness, exports from our Apparel Sector has decreased by 24%. The foreign investment in Bangladesh has already decreased significantly far a reason .of political instability.

Consumers are losing their purchasing power.

Fighting inflation has become a priority. In order to fight the inflation the following strategies are suggested:

The usual remedy of a cast-push inflation is to control the increase of prices and income through a policy, which will control the social pressure to raise wages and the ability of the producers and suppliers to increase prices. A market intervention to lower the pressure for wage increase and control of prices will temporarily suppress the inflation, which is also beyond our control. Because this is a world wide increase in prices due to higher prices of energies. Import prices of intermediate goods have also increased in the exporting country. Import prices of many essential goods from foreign countries and India in particular including food and related items, fabrics and female dresses of three pieces and saries have increased. Therefore, lowering prices are beyond our control. Suppressing the claim of wage increase would be very inhuman as the wage level is already too low for the workers to afford essential goods. As mentioned before, consumers have already lost their purchasing power significantly, which have greatly increased the social and political concern.

Concentration on supply-side to increase productivity may be the last hope to fight the recent inflation. Technological improvement and innovative discovery for production and supply can decrease the cost of production far a given output, or can increase the output with the same or similar amount of input. All these will tend to decrease the price.

Additionally, the Government would have to give subsidies for the production of essential goods including food item. We do not increase the tax rate since it is not a demand pull inflation but we can increase the coverage of tax payment by each and every citizen of taxable income to maximise the tax revenue of the Government. We also need to decrease tarrif and increase import quota, if any, for essential consumer goods and intermediate items to keep their prices reasonably low.

The other significant reason in this major importing country is that our exchange rate is too low to afford the imported goods and services. The Government should think of a fixed exchange rate at a relatively high level, which might help the consumer to afford imported goods to some extent.

As mentioned above, consumers' purchasing power has substantially decreased. Purchasing power of the consumer will have to be increased so as to enable them to buy their essential goods and services to meet their basic needs in life. Since this is more of a cost push than a demand pull inflation, we do not reduce the government expenditure to purchase goods and services by reducing the budget deficit, money supply and hire purchase. Rather, we need to take an expansionary economic policy by increasing budget deficit or money supply or both and not increasing the tax rate, so that this policy will directly and indirectly increase the consumer's purchasing power, domestic consumption and domestic private investment. Increased burden of Government loan will be taken care of in a gradual fashion.

(The writer is Vice-Chancellor and Economist, Uttara University)

Bijan Lal Dev

About 25,000 people die every day across the world, which is one person in every three and a half seconds, of hunger or hunger-related causes, according to the United Nations. Unfortunately, it is children who die most often. The deaths have one thing common: they result from extreme poverty. Poverty keeps hungry people from buying enough food to nourish them. Poverty keeps sick people from receiving basic medical treatment or taking simple preventive measures against AIDS, Pneumonia, Diarrhoea, Tuberculosis, Malaria, and Measles. The vast majority of these preventable deaths occur among the poorest people in the poorest countries. They do not have enough money for medical treatment as over 70 percent of their income is being spent on food.

There is plenty of food in the world for everyone. The problem is that hungry people are trapped in severe poverty. They lack the money to buy enough food to nourish them. Being continuously malnourished, they become weaker and often sick. This makes them increasingly less able to work, which then makes them even poorer and hungrier.

Over a billion people have to live on $1 a day or less. More than 800 million people most of them women and children know what it's like to go bed hungry. They are losing their health and lives, their potential for prosperity and their hope for a better future. 226 million children are stunted physically and mentally from malnutrition wrecking their chances for a good education and productive future. Millions of pregnant women miscarry or give birth to malnourished children. 2 million babies a year are so weak from hunger that they die when they get a bad case of diarrhoea. This downward spiral often continues until deaths for them and their families.

These should not be the phenomena of a civilized world. World should get rid of hunger and poverty. But how and when it would be furnished? And who will take the lead? These questions remained unresolved till 17th October 1987 when over a hundred thousand people gathered at the Trocadéro in Paris, where the Universal Declaration of Human Rights was signed in 1948, to honor the victims of extreme poverty, violence and hunger. Since then, the people of all walks of life have gathered there on the day to renew their commitment and show their solidarity with the poor.

The United Nations General Assembly on 22 December 1992 declared 17 October as the International Day for the Eradication of Poverty. From 1993 the Day is celebrated every year throughout the world. The theme for the day in 2007 was 'People living in poverty as agents of change: 20th Anniversary of the International Day for the Eradication of Poverty.' The day was also observed in Bangladesh with a fresh vow to eradicate poverty.

The UN estimated that about $195 billion a year is needed to stop deaths from hunger and poverty-driven diseases. Responding to the demand 22 developed countries in 2002 agreed to work towards each giving 0.7 percent of their national income as aid to the poorest countries. 5 countries have so far reached the goal. Another 11 countries set up a schedule to reach the goal from 2012 to 2015. But six potential countries including the United States, Japan, Canada, Australia, New Zealand and Switzerland have not yet set up a schedule to give 0.7 percent.

As a result, most of the least developed countries including Bangladesh can not implement their poverty reduction initiatives including efforts to achieve the Millennium Development Goals. In order to achieve MDGs, Bangladesh should get at least $7.5 billion in foreign aid in a year but Bangladesh gets 1.5 billion on average and specifically $1.625 billion in 2006-07 and $1.567 billion in 2005-06. Besides the majority shares of the aid came as loan and the percentage of grant is reducing every year.

Bangladesh has made some definite progress in the fight against poverty. The indicators like reducing child mortality, improving life expectancy, enhancing net primary enrolment, empowering women, participating more and more women in economic activities, improving rural infrastructure and communication network, expanding micro-credit equally both in villages and slums in urban areas. But still there are a number of challenges to be addressed to eradicate poverty in Bangladesh and to achieve MDGs by 2015.

These are: demolition of extreme poverty pockets concentrating in the northern region, removing social barriers in consolidating women's gains in social and economic fronts, accelerating the growth process by public-private partnership in all socio-economic sectors and ensuring good governance. Strong monitoring and coordination of the social safety net programs to rein in their flaws and speed up the poverty alleviation process is also needed. At the same time, the authorities should note that the transfer of food and cash are complementary, not alternative to ensuring food for the extreme poor. Faster growth is essential for speedier poverty reduction. There is no other trick to it. At the same time, achieving a sustainable growth trajectory of around 8 percent by 2015 is necessary to make a significant dent in poverty.

The Caretaker Government is progressing steadily to that goal in addition to its prime goal to ensure a free, fair and credible election and establish a sustainable corruption-free environment in the country. The on-going anti-corruption drive will also have an impact on reducing inequality in accumulating wealth and distributing resources to rural and urban areas in a long run. Let us put our collective efforts to achieve a poverty-free Bangladesh where only a spirit of peace and prosperity will remain.

(PID Feature)

Md. Masum Billah

The two fresh developments in Musharraf's declared state of emergency gained momentum towards going to democracy-first one the release of Benazir Bhutto after twenty hours of her house arrest. The second one is the declaration of elections by February 15, sate media quoted President Pervez Musharraf as saying he moved to quell global outrage over his imposition of a state of emergency. The statement came hours after US president George Bush telephoned Musharraf to urge him to repeal emergency rule, hold polls that were due in January and quit as army chief. Geroge W. Bush personally intervening in the political crisis in Pakistan is telling President Musharraf he must hold parliamentary elections soon and resigning as army leader. " You cannot be the president and the head of military at the same time." It was Bush's first contact with Musharraf since he declared emergency rule on Saturday and granted sweeping powers in authorities to crush political dissent. "My message was very plain ,very easy to understand and that is the United States wants you to have the election as scheduled and take your uniform off". Bush said during a news conference with French President Nicolas Sarkozy held at George Washington's home on the banks of the Potomac River in the capital of Verginia suburbs. United States has soft corner for Pakistan for her own interest i.e. waging war against the terrorism of Al Quida. John Negroponte Deputy Secretary of state in Congress said ,"No country has done more than Pakistan in terms of inflicting damage and punishment on Taliban and Al-Quida since 9/11. He continues, "US is reviewing its aid to Pakistan but hopes USA will not punish Pakistan."

Pakistan is heading for a very uncertain time because this special kind of coup is challenged by political parties. This will also build strain between Musharraf and the military. Benazir Bhutto said for her countrymen" I am your sister fighting for democracy." Police blocked her with armour personnel carriers. She said in response to it " I am not afraid of these tactics. My struggle is for the people of Pakistan, for their rights and for an end to dictatorship." Pakistan's sacked chief justice urged people to rise up against Musharraf's emergency rule on as the government ignored a global outcry and cracked down on fresh protests. He urged people to save the constitution."I want lawyers to spread my message to the people of Pakistan, the time for sacrifice has come to rise up for the supremacy of the constitution."

Defying the red eyes of military, paramilitary forces countrywide protest against Musharraf's emergency has engulfed the nation. 5000 PPP supporters have already been arrested. The bloodless coup Pakistan embraced several times but the present coup proves different now. This time the cause clearly proves personal daggers drawn between Musharraf and Iftekhar Chaudhury . He wants to teach the judges and lawyers of Pakistan who what he says intervened in exercising executive power of the state. Not only that he further says because of the intervention of the judiciary in the state affairs the religious extremism sprung up in the country.

So, Musharraf says, " Inaction at this moment is suicide for Pakistan and I cannot allow this country to commit suicide.'' Musharraf speaks in the same voice as Yahya Khan said 36 years ago, " We have imposed martial law for the good of Pakistan and to preserve the unity of Pakistan." All the generals come to the power uttering such kind of patriotic and religious sermons. They want to expose that God has sent them to save the country and people have given them popular verdict to shoulder the responsibility. So, beating, harassing and torturing the intellectuals are legal actions and they have got the license. The human rights activists must be arrested. The lethal forces who have been nurtured by the public exchequer would be used against the innocent people as generals are the ambassadors of God.

It is true 667 people had been killed and 2000 injured in terrorist attacks this year in Pakistan including an unprecedented 43 suicide bombings. It is also true that these sad incidents took place during the time when Musharraf held full executive power of the state. So, he cannot avoid the either his lethargic or lenient attitude towards the extremists. The present turbulent situation of Pakistan created by him on the plea of curbing or eradicating religious extremism fails to convince the civilised world. Even, Pakistan's close allies China says, "We are concerned about the situation in Pakistan." We are also concerned over deteriorating human rights situation and the strangling of democracy in Pakistan.

(The writer works as a specialist in Brac Education Programme, PACE and regularly writes on national and international issues.)