The New Nation - Internet Edition

Staff Reporter

Dropout from primary education is increasing in Bangladesh due to skyrocketing food prices that led food inflation to soar over 20 per cent, an independent economic research revealed yesterday.

"Food inflation for the country's marginalized population is more than double the national inflation rate," private research group Shamunnay said in its quarterly update 'Bangladesh Economic Outlook.'

The study explored the impact of the rise in food prices on the education of children in the poor and vulnerable households in Bangladesh.

Poverty is rising and huge number of people cannot afford food for their children, let alone spending on education. The poor are being forced to send their children for job and seek bread, Dr Atiur Rahman, chairman of Shamunnya said.

The Shamunnay's report contradicts the government's report on inflation. According to the BBS, food inflation rate was 13.19 per cent in July and inflation in non-food sector was 5.94 per cent.

In June, food inflation was 14.10 per cent and non-food inflation was 3.54 per cent. In April this year, the Government claimed inflation was down to 7.66 per cent from 7.44 per cent in May.

The Shamunnay said poorer households with higher than average numbers experienced greater probability of children dropping out from school, while smaller families with higher per capita income have less probability of school dropouts.

The probability of dropouts also tends to be higher in rural areas compared to urban areas, the report reads.

Looking into the Government's '100 Days Employment Generation Programme', the report highlighted targeting the right groups, timely implementation, monitoring and evaluation as major challenges to the success of the initiative.

Touching on the country's macro-economic indicators, the report said trade deficit has significantly widened over FY 2008 paced by high import costs in food and fuel.

The report, however, said that the country's capital market outperformed other markets in the region over the year despite falling substantially since May '07.

Foreign reserves stood at about $6.1 billion which is about 21 per cent higher than the reserves held at the end of FY 07, boosted by a 32 per cent growth in remittances in FY 08. The private research group expects that it will grow further during the current fiscal year.

On the country's business scenario, the study said SMEs were recovering better than larger businesses, while the Business Confidence Index witnessed overall slight improvement.