ABSTRACT
Bangladesh has made some progress in reducing poverty but still faces the reality that about 41 per cent of its population lives in poverty. This figure is about 41.1 per cent for rural areas. Of the poor, two out of three are caught in extreme poverty, as measured by the direct calorie intake (DCI) method [Bangladesh Bureau of Statistics (2004) ]. But because of population growth, Bangladesh entered the new millennium with the same absolute number of poor among its people as ten years earlier [World Bank and Asian Development Bank (2003) ]. Significant reduction of poverty required a higher level of economic growth with social justice so that it reaches the poor and expands their opportunities. The economic growth elasticity of poverty in rural Bangladesh was estimated at −1.9 in 2000 and −1.8 in 1991-1992, while income inequality elasticity of poverty was 0.5 and 0.2 respectively [Sen and Hume (2004) ]. These findings indicate that significant poverty reduction is not possible with the present level of economic growth if accompanied by high income inequality.
