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Bhutan poverty rate estimated at 8.2%

Bhutan poverty rate is estimated at 8.2%, according to the Bhutan Poverty Analysis Report 2017 that was released on Wednesday.

According to the report, one out of 12 persons belongs to households whose per capita real consumption is below the total poverty line of Nu 2,195.95 per person per month with estimated food and non-food requirements of Nu 1,473.45 and Nu 722.50 respectively.

The analysis shows that poverty is still a rural phenomenon with poverty rate of 11.9% compared to only 0.8% in urban areas. Only 1.5% of the population is subsistence poor or in extreme poverty (i.e. persons belonging to households with per capita consumption below food requirements).

“Consequently, efforts toward poverty reduction ought to continue with a strong focus on rural development,” the report states.

Of the estimated surveyed population of 692,895 persons in the country, 56,855 are estimated to be poor and 10,687 are subsistence poor.

The overall poverty rate in the country reduced from 23.2% in 2007 to 12% in 2012 and further to 8.2% in 2017. Rural poverty reduced from 30.9% in 2007 to 16.7% in 2012 and 11.9% in 2017. However, the proportion of poor in urban areas remained practically unchanged at about 2% between 2007 and 2012, but significantly reduced to 0.7% in 2017.

Among the dzongkhags, poverty rates are found to be high in Dagana, Zhemgang, Mongar, Trongsa, and Pemagatshel. However, Haa, Thimphu and Paro have the least poverty rates. The four Thromdes: Phuentsholing Thromde, Samdrup Jongkhar Thromde, Gelephu Thromde and Thimphu Thromde: have lower poverty rates of at most 1% of their respective populations.

The poverty line, the minimum acceptable standard of per capita consumption needed to assure a minimum standard of living, is obtained using the Cost of Basic Needs (CBN) approach, a commonly used methodology in many countries for constructing the poverty line.

This approach estimates the food component of the poverty line as the cost of a food bundle attaining a pre-determined minimum food energy requirement (of 2,124 Kcal per person per day), and then adds some non-food requirements to the food component in order to yield the total poverty line.

While understanding the drivers of poverty reduction requires extensive data analyses, the National Statistics Bureau preliminary analyses show that most of the poverty reduction between 2012 and 2017 was due to increasing nonfood consumption with no major change in food consumption patterns. For example, surveyed households on average spend more on transportation, clothing, and recreation in 2017, compared to 2012, after adjusting for inflation.

Both poverty rates and subsistence poverty rates increase with the size of the households. On average, female-headed households are observed to be less poor than male-headed households. The trend is observed to be similar in both urban and rural areas. However, the sex of the household head does not have much influence on subsistence poverty.

Among the employed, poverty rates are higher in households whose heads are working in agriculture (9.6%), though this is a decrease by almost half from the 2012 (18.5%) figure for the same.

As expected, the higher the level of education completed by the household head, the lower the poverty rate for the household. In other words, the level of poverty decreases as the educational level of the household head increases. About 9% of the households with household heads who had not attended a school are poor.

Pema Seldon from Thimphu

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