The World Bank’s newly released “Bangladesh Poverty and Inequality Assessment Report 2025” discusses the country’s growing vulnerability to poverty. The report paints a worrying picture of how poverty has expanded in recent years and how it is affecting society. For the past four years, Bangladesh has experienced a steady deterioration in poverty levels. In 2022, the poverty rate stood at 18.7 per cent, which may rise to 21.2 per cent by the end of this year.
At present, around 36 million people in the country live in poverty. Another 62 million people remain just above the poverty line and could slip below it with even a minor shock.
One of the primary drivers of rising poverty is high inflation and the scarcity of employment. In the 2023–24 fiscal year, nearly two million fewer jobs were created than required.
In recent years, the quality of education has declined alarmingly. Students are struggling to compete in the open job market because the education system has failed to equip them with employable skills. Those pursuing higher education are, in many cases, becoming “educated unemployed”. A lack of technical training and relevant skills is preventing them from securing jobs.
Many institutions in Bangladesh are hiring mid-level skilled workers from India, Pakistan and Sri Lanka. Inequality and poverty are rising. Poverty takes many forms. Some people, having lost employment, are being forced to resort to begging in order to support their families. To address this, new avenues of employment must be created by revitalising the productive sectors. There is no alternative to boosting productivity in these sectors to generate jobs.
If large-scale factories were established across the country, new employment opportunities could emerge. Unfortunately, the industrial sector has slowed in recent years. Political uncertainty and various forms of social instability have made entrepreneurs hesitant to invest. According to a recent Bangladesh Bank report, private sector credit growth has dropped to 6.29 per cent — the lowest in 22 years. Imports of raw materials, capital machinery and intermediate goods have also fallen significantly. Foreign investment has likewise shown signs of stagnation.
Economists believe that to safeguard a family from financial hardship, employment opportunities must be created for multiple members of that family. In the past, the income of a single employed member was often enough to support an entire household. Today, rising financial demands have made that impossible. As a result, employment opportunities for several members of each family have become essential.
Even where jobs are available, adequate wages and benefits are not guaranteed. Wage growth has not kept pace with rising inflation. Consequently, many lower-middle-class families risk falling into poverty for the first time.
The previous government’s social protection programmes were poorly implemented. As a result, wealthier families often benefited instead of the poor. Almost 35 per cent of social protection beneficiaries were affluent households. People naturally migrate to regions where employment prospects are better.
Bangladesh has made economic progress in recent years, but the benefits of development have not been distributed equitably. A small group of wealthy families has captured most of the gains. As a result, the economic and social divide between rich and poor has widened further. One of the core goals of Bangladesh’s Liberation War was to eliminate economic disparity and ensure social stability and protection. Many will recall the Awami League’s pre-1970 election poster titled “Why is Golden Bengal a Crematorium?”, which exposed the economic inequality between the two wings of Pakistan. During the Pakistan era, we fought against the dominance of 22 families. Today, we face inequality created by 22,000 families.
After independence, in the 1972–73 fiscal year, income inequality was relatively manageable. However, during the Awami League’s three-and-a-half-year authoritarian rule, corruption spread rapidly. State-backed corruption permeated both urban and rural areas. Consequently, the gap between the rich and the poor widened significantly. Over the last 16 years, we have witnessed the extent of the Awami League’s entrenchment in corruption. A government elected without people’s votes had no accountability to the public, allowing corruption to become institutionalised. When a peon working in the Prime Minister’s Office owns assets worth Tk 400 crore, it is easy to imagine the scale of wealth accumulated by those in higher positions. Investigations by the interim government have uncovered staggering amounts of illicit assets accumulated by former leaders. One former state minister has been found to own more than 300 houses and flats abroad. While ministers were buying properties overseas, the number of internally displaced people in Bangladesh has grown at an alarming rate.
According to the World Bank report, since 2016 the benefits of economic growth have disproportionately favoured the wealthy, increasing the hardship of the poor. Bangladesh is not short of resources, and the country is now in a golden era of demographic potential. For nearly 20 years, Bangladesh has been experiencing a demographic dividend, where two-thirds of the population is between 15 and 60 years old — the most productive age group. Economists consider this period to be the most favourable for socio-economic development. A demographic dividend is a once-in-a-century opportunity; those countries that fail to utilise it cannot achieve long-term prosperity. China maximised its demographic dividend and rose rapidly. Japan, on the other hand, is falling behind because it has moved beyond its demographic dividend. It held the world’s second-largest economy position for 44 years, but China has now overtaken it. Bangladesh, despite being in the demographic dividend stage, has not taken initiatives to harness this advantage. Meanwhile, the number of elderly people in the country is increasing, meaning we are on the verge of losing this opportunity.
Economic development is not difficult; the challenge lies in fairly distributing the benefits of production. Those who run the state often behave as though the country is their personal property, believing they alone deserve to enjoy its resources.
With the public uprising of 2024, the nation has entered a new era. People expect that the upcoming February election will establish a democratic and humane government. Those who form the next government must remember that if the public turns against them, even the most powerful governments can fail.
Reviewing the overall situation, it appears that the interim government has not taken significant steps towards poverty alleviation or reducing inequality. Therefore, any future government must prioritise these issues. To ensure this, a people-centred and employment-oriented education system must be introduced promptly to produce a skilled workforce. With increased employment and effective utilisation of skilled manpower, poverty can be reduced.
The writer is a former Vice-Chancellor of the University of Dhaka and former Ambassador of Bangladesh to Bahrain.
