Poverty and Inequality

This chapter narrates the experience of Bangladesh’s fight against poverty and deprivation including inequality. Along with standard uni-dimensional conceptualisation of poverty, changes in multidimensional poverty and poverty dynamics are also analysed as these are equally important determinants for designing appropriate interventions to eradicate poverty. Microfinance, especially through providing microenterprise loans, reduces the credit constraints that the poor entrepreneurs often face and that preclude enterprise development in the poor communities. The analysis highlights that, for the medium term, Bangladesh needs to create effective economic institutions and proper policy incentives, while also pursuing sound macroeconomic policies and efficiency-enhancing reforms over time. The key for Bangladesh is to build a robust middle class and reduce extreme poverty and social marginalisation for creating a more equitable society.