Market-Oriented Reforms in Bangladesh and their Impact on Poverty?

After providing some general background on developments in Bangladesh’s economy, the article indicates the nature of international political pressures, as represented by the Washington consensus, put on Bangladesh to adopt market-oriented reforms. The sequencing and pattern of Bangladesh’s market reforms and their consequences for its external balance are then examined. Particular attention is given to the fact that its macroeconomic reforms preceded its microeconomic ones. The impacts of Bangladesh’s market reforms on the incidence of poverty can be seen as part of the general question of the effects of these reforms on social welfare. The Human Development Index (HDI) for Bangladesh is considered in this context. Poverty may be measured in different ways. Here, the Human Poverty Index (HPI) and the incidence of poverty (based on Bangladesh’s official poverty line) are considered as indicators of the extent of poverty in Bangladesh, and these measures are qualified. The relationships of HDI, of HPI and of the incidence of poverty in rural and urban areas to the progress of Bangladesh’s market reforms (as measured by the openness of its economy) is examined. No strong evidence is found to indicate that the market reforms have reduced the incidence of poverty in Bangladesh.