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Portfolio: Archtecture Portfolio, Software Engineer portfolio

2011-06-17T13:36:00.000-07:00

Portfolio means a collection of work example. Which help someone to understand one’s capacity or ability in a field of work. Such as for a programmer his portfolio may contain some software, webpage, algorithms etc he developed.

Importance of portfolio depends on field of work and level of career. Say an construction engineer applying to a real estate company as a designer. Here it is good to present his portfolio or folder containing document markable previous works. But for manager a portfolio will be like providing salt for making coffee.

Actually most important purpose of making portfolio is to impress bodies. So it is no need to say people try to gather document of best performances in portfolio.

Portfolio also means a type briefcase because the word portfolio came from the art workers who were used a small case to carry some example works to display their work qualty. Now portfolio is used in a variety of discipline such as Information Technology, Graphics Design, Architectural Design etc.

Architecture student portfolio

Students of Architecture discipline has culture of saving and pursuing a strong portfolio because they believe, when they will sit for interview they have impress the examiner by the portfolio. Architecture students make a book like binding of best works. This book is called architecture student portfolio and it represents his quality to an architectural or developer farm.

Architecture portfolio examples

Architect portfolio

Both student and experience architect's portfolio is architect portfolio but people actually means the extraordinary works done by an experienced architecture who compete for owning and eligible for medium to large projects. Sometimes well known architect's extraordinary practices are popular to the sectoral people thereby they do not carry any portfolio.

Software Engineer Portfolio

A portfolio of a software engineer includes some algorithm, application or total software package. Usually these are not cried in case, technology professionals upload their portfolio on a website and when need to show it, they refer to the website. Thereby each of them try to make a attractive portfolio website.

Income Inequality and Poverty

2009-02-28T06:50:00.001-08:00

Income inequality and its distribution are now common phenomena. Many economists now work on it. The income inequality is sharp in lower income countries than middle or higher income countries. Again the income range of low-income countries also very few than other countries.

However, income inequality and poverty are closely related with each other. Inequality creates poverty. Here is proved this statement in two perspectives.

Inequality and Inequity
Empirical evidence

Inequality and Inequity: Philip B. Coulter defines "inequality" as a special case of "inequity". If I understand Coulter correctly, then

Inequity is the deviation of an observed distribution from any defined reference distribution.

Inequality is an inequity for which the reference distribution is defined by A_i/E_i=A_i+1/E_i+1, that is, all shares are evenly distributed.

In case that inequality is a relative measure, then inequality = 1-equality. As for equal distribution within a group, all members receive the same share. Equities, however, are shared based on the (perceived) value of the receiving individuals. The values of the group members may be determined by merit.

However, if the income share is not equal in any country then it occurs the following situations.

Relation of income inequality and poverty:

Income inequality.
Inequity in the society.
Create poverty.

Inequality and Inequity: Empirical Evidence: For empirical evidence here is considering some matters. These are –

GNP per capita, rate of poverty (%) and share of income groups of a country and here the considering country is Bangladesh;
The situations are taken for two decades for finding average trends.

Table: Relation of income inequality and poverty

Year	Share of income groups (%)	GNP ($)	Rate of poverty (%)
1970-80	45% share of top 20%. 25% share of middle 40%. 30% share of bottom 40%	150	60
1980-90	40% share of top 20%. 25% share of middle 40%. 35% share of bottom 40%	350	35.6

Source: Report on Rural Development in CIRDAP member countries, pp 36-63.

So, from the table it is cleared that for a negligible change of income share a gulf of difference is occurred in poverty situation and GNP per capita.

Rural Poverty in Bangladesh

2009-02-28T06:37:00.001-08:00

Bangladesh

is a developing country in the world. It has many problems like other developing countries. Poverty is a major constraint in the way of economic development of

Bangladesh

. Now a day the poverty situation of

Bangladesh

is prospering due to initiatives taken by the government and non-government organizations. From several studies it has been observed that the poverty situation is diminishing slowly day by day. It is a positive factor for the development of the economy. According the household expenditure survey, 1995/96, 47.1% people are staying under the poverty line i.e. they are taking less than 2122 kilocalorie food in a day and 24.6% people are staying under the absolute poverty line i.e. they are taking less than 1805 kilocalorie food in a day. The poverty situation and trend can be present by the following table.

Table 02. poverty status in Bangladesh(%)

Region	1995/96	1991/92	1988/89	1985/86	1983/84
	Poverty
National	47.5	47.5	47.8	55.7	62.6
Rural	47.1	47.6	47.8	54.7	61.9
Urban	49.7	46.7	47.6	62.6	67.7
	Absolute poverty
National	25.1	28.0	28.4	26.9	36.8
Rural	24.3	28.3	28.6	26.3	36.7
Urban	27.3	26.3	26.4	30.7	37.4

Source: Economic Review – 2000.

In the above table it can be stated that in the urban area the poor is larger than rural area due to population pressure, lack of employment opportunity, lack of housing facilities. It is mentioned that standard of life of people in the rural area have improved. In another study conducted in the urban area in 1995, it is observed that 60.86% people are poor and within this 40.2% people are absolutely poor. But 90% of the poor people use pure drinking water and 41% use the sanitary latrine, have mentioned in the report. 22% of the income of the rural people and 27% of the income of the poor are spend in crisis coping in the rural area, have also mentioned in the report.

The changes in rural poverty from 1987 – 1994 can be show in a table as follows:

Table 03. Types of poverty and its distribution in (%)

Types	1987	1989/90	1994
Absolute poor	25.8	30.7	22.5
Poor	31.7	28.6	29.7
Poor & absolute poor	57.5	59.3	51.7
Poverty gap ratio	21.7	24.8	19.2

Source: Dynamic of rural poverty in

Bangladesh

, BIDS, April – 1996

Recent Trend: In a survey of

Bangladesh

Bureau of Statistics (BBS) it has informed that the rate of poverty fall to 44.7% from 47%. In 1999 the rate of urban poverty was 43.3% and 44.9% in rural area. From this information it can be said a small positive change exists in the poverty situation. The recent trend of poverty can be easily presented by a table, as follows:

Table 04. Percentile distribution of poverty in Bangladesh.

Region	1995/96	1991/92	1988/89	1985/86	1983/84
	Poverty
National	47.5	47.5	47.8	55.7	62.6
Rural	47.1	47.6	47.8	54.7	61.9
Urban	49.7	46.7	47.6	62.6	67.7
	Absolute poverty
National	25.1	28.0	28.4	26.9	36.8
Rural	24.3	28.3	28.6	26.3	36.7
Urban	27.3	26.3	26.4	30.7	37.4

Source: Economic Review-2000

According to the table, it can be stated that the rural poverty is higher than urban poverty. Again both the national poverty and urban poverty are more or less closer to each other due to the existence of large amount of rural areas.

Bangladesh

has achieved quite improvements in social and economic indicators. The annual growth rate of GDP during 1991-1997 was 3.2 per cent. And GDP further expanded at the rate of 5.5 per cent during 1996-1999 despite huge damages brought by recurring floods in 1998/99. Real gross GDP has increased by 64 percent during 1991-2000 as major sectors like agriculture; service and industry have shown significant growth by 41 percent, 58 percent and 103 percent respectively. It should be noted that per capita income growth rate of 3.7 percent per annum during 19996-99 is respectable performance especially with high population growth at 1.8 percent per year. The incidence of poverty has decreased from 58.8 percent in 1991-92 to 49.8 percent in 2000. However, despite its 9 percent decrease, actual numbers of poor remain the same at 63 millions due to a high population growth. The incidence of extreme poverty has also decreased from 42.7 percent to 33.7 percent in 2000 and the number has also decreased from 45.2 million to 42.5 million. The poverty rate is higher at rural areas at 53 percent than at urban areas at 36.6 percent in 2000. There have been remarkable improvements in human poverty indexes. Progress in reducing some aspects of deprivation was faster than in case of others. According to the UNDP report, total fertility rate has dropped from 6.3 in 1975 to 4.3 in 1991, and further gone down to 3.3 in 1997-1999. Accordingly, population growth rate has gone down from 2.9 percent per annum in the mid-1970s to 1.6 percent in the late 1990s. Infant mortality rate has declined from 104.6 per 1,000 live births in 1985-89 to 92.8 in 1990-94 and further to 66.3 in 1995-99. Maternal mortality rate is believed to have declined from 6 per 1,000 live births to 4.4-4.8. Declining mortality rates have led to an increase in average longevity of the population and life expectancy at birth improved from 55/56 years in the 1980s to 60 years in 1999-2000. The overall adult literacy rate increased from about 26 percent in the mid-70s to 29 percent and to 60 percent by 1999. The gross enrollment in primary schools has increased from 59 percent in 1982 to 96 percent in 1999. The gender gap in gross enrollment at the primary has significantly narrowed down in the order of 6 percent in 1999.

Role of NGOs in Poverty Reduction

2009-02-28T06:35:00.001-08:00

Poverty is one of the important problems in our country. It creates other many problems for the people. In this situation, it is very much necessary to alleviate the poverty from Bangladesh. For poverty alleviation, different organizations, NGOs and associations have taken various effective programmes and steps. On the other hand government also has taken some plans and policies for poverty alleviation. In 2000-20001 fiscal year, government has declared a large amount of money for poverty alleviation and rural development now I would like to mention the following steps, programmes, plan and fiscal also should be followed for poverty alleviation

Bangladesh

At first, to decrease the population growth rate by giving proper training and facilities of health and family planning training center.

To ensure the equal distribution of resources which is available in the country.

To create the employment opportunities for the poor by expanding and establishing cottage and small-scale industries.

To remove the poverty, it is necessary to increase the productivity by using modern technology and skilled manpower.

To create skilled manpower by providing proper training for the unskilled manpower.

We can reduce poverty through micro-credit facilities among the poor people.

All cultivable land can be converted into three-cropped land by means of irrigation.

To raise literacy rate by taking various programmes—Food for education programme, Compulsory primary education, adult education etc.

Facilitate agriculture development through institutional support and expansion of irrigation.

Increase basic physical infrastructure (roads, markets) in the rural area.

Promote participation of women in development activities.

Utilize the resource properly to reduce poverty.

Remove the social corruption for poverty alleviation.

Increase the awareness of poor people by teaching and proper training.

Various NGOs can play a vital role for poverty alleviation. So, we should take the opportunities of different projects and programmes of NGOs and association, such as--- Grameen Bank Prokalpa (GBP), Small Farmers credit project (SFCP) etc.

We can alleviate poverty by taking proper plan and utilization of resource

NGOs:

Microcredit Programmes

Over the years, Bangladesh has emerged as the pioneer in innovating and managing microcredit programmes for income/employment generation along with social programmes and support activities. Microcredit programmes have a wide network in the country involving both the Government agencies and the NGO sector. The Bangladesh Rural Development Board (BRDB) disbursed more than Tk. 17 billion as microcredit to 1.3 million beneficiaries during 1991-2000.17 There exist many other institutions which are involved in microcredit including the NGOs. The Palli Karma Sahayak Foundation (PKSF) is a Government financed institution which disbursed nearly Tk. 8 billion through NGOs till December 2000. The Grameen Bank’s cumulative disbursement of microcredit was Tk. 137 billion till December 2000. While comprehensive statistics are difficult to arrive at, available information show that different microfinance NGOs distributed more than Tk. 109 billion to 10 million borrowers till June 2000 (CDF 2001). The microcredit activities, in general, are economically efficient which generate a net surplus for the poor borrowers. These programmes also create positive impact on socioeconomic indicators including children’s schooling, nutrition, and fertility (Khandker 1998). What is impressive about microcredit is its massive expansion in recent years covering nearly half of the target households (usually defined as those having half an acre of land).

To bring the rural poor into mainstream of development, NGOS focuses on nstitution building as a strategy. NGOS believes that a common platform that is created and owned by the poor is a prerequisite through which the poor can make themselves count in the development process. The Village Organization (VO) is an association of the poor and the landless people who come together with the help of NGOS to try and improve their socioeconomic position. NGOS’s approach to social and economic development of the poor, especially women, involves four inter-related strategies: institution building, service delivery, social mobilization and public sector mobilization.

NGOS’s core approach and competency is the delivery of health, education, microfinance, and microenterprise services on a large scale to the rural poor, primarily women. NGOS decided to train local women to help deliver these services and organize local groups. As a result, NGOS’s service delivery contributes to building local leadership and local organizations.

As of December 2002, NGOS had organized its 3.53 million members into 113,756 VOs across the country. NGOS’s microfinance staff meet VOs once a week to discuss and facilitate credit operations, the social development staff meet VO members twice a month to discuss various socioeconomic and legal issues and the health staff meet with the VOs once a month to discuss health issues.

BRAC is a leading NGO in Bangladesh. The programmes of BRAC are as follows as an NGO Example.

Microfinance Program

The microfinance program of BRAC is a tool for poverty alleviation and empowering the poor. Lack of access to the formal banking system deprives them of the facilities to borrow, save and invest in productive activities, and this is a major reason why poor people remain poor. The formal banking sector also requires collateral. Making credit available to the rural poor enables them to become involved in different income generating activities which, in turn, allows them to become economically self-reliant. Through this process BRAC’s microfinance program works to create a self-sustaining and reliable financial service program for the poor.

Credit

Credit is provided to its VO members to initiate different income generating activities. While loans for individual and joint activities do not require collateral, members must have some savings with BRAC before they are eligible for loans. Credit operations are carried out through a Revolving Loan Fund (RLF). This RLF consists of donors’ fund, members’ savings, Polli Karmo Shohayok Foundation (PKSF) loan and other loans. Loans realized from VO members are credited to and form part of the RLF for extending further credit. A 2% loan loss reserve is kept to cover the risk of bad debts and death. Regular borrowing and payments allow the borrower to take larger loans.

Key Features of Loan

- Loan range: US$ 17 (Tk.1,000) to US$ 345 (Tk. 20,000)
- Service Charge: 15%
- Repayment mechanism: Equal weekly installments
- Loan products: General loan, sector program loan, housing loan and emergency loans given at the time of disaster

In 2002, US$ 294 million (Tk. 1,707 crore) has been disbursed to 2.9 million borrowers with repayment rate of over 98%.

Savings

Savings is an important component of microfinance services. Experiences show that there is a positive correlation between savings and sustainable credit operation. From the member ’s point of view, savings represent an opportunity to save in small amounts to form a lump sum that earns interest. This is an opportunity that the formal market or regular financial institutions do not provide.

Micro Enterprise Lending and Assistance (MELA)

Micro Enterprise Lending and Assistance (MELA) program was launched in December 1996 to provide loan to small enterprises with growth potential. The objective of this program is to provide credit facilities and technical assistance to new and existing small businesses.

The characteristics of MELA loans are:

- Loan range: US$ 345 (Tk. 20,000) - US$ 3,448 (Tk. 200,000)
- Service Charge: 15%
- Repayment modality: Equal monthly installments
- Loan duration: 12 months, 18 months and 24 months
- Twenty different business sectors are supported by MELA loan

By the end of 2002, a total amount of US$ 48 million (Tk. 260 crore) was disbursed to 45,503 borrowers in 64 districts of Bangladesh with an average loan size of US$ 1,077 (Tk. 62,484).

Employment and Income Generation (EIG) Program

BRAC has learned that besides lack of access to finance, the two major constraints that have prevented the poor from improving their lives are the absence of self-employment opportunities and lack of skills to sustain those activities. BRAC realised that if different employment opportunities were created, along with sufficient training and refreshers for capacity development, the poor could be linked to the mainstream economy which would ultimately bring them out of poverty.

Activities approved for BRAC sectoral lending and other support enterprises can be classified under the following broad categories.

Poultry & Livestock Program
Approximately 70% of the rural landless women are directly or indirectly involved in traditional poultry rearing activities. The Poultry and Livestock Program is composed of several components: poultry and livestock extension program, poultry farms and hatcheries, feed mills and feed analysis laboratories, bull station and the disease diagnosis laboratories.

Till to date, 1.96 million people have been involved in this program.

The key persons under poultry and livestock extension program are i) Poultry and Livestock Extension Worker ii) Chick Rearer iii) Key Rearer iv) Cage Rearer v) Broiler Rearer vi) Egg Collector vii) Model Cow Rearer viii) Model Goat Rearer and ix) Artificial Inseminator.

Fisheries
The Fisheries Program, started in 1976, is now developed into one of the most promising and profitable EIG activities for rural women. The key components of the program are pond aquaculture, open water fisheries management, and fish and prawn hatchery.

BRAC aims to promote pond aquaculture by rural women to provide them with an additional source of income and improve their nutrition level thereby improving socioeconomic condition of the participants. BRAC provides training, undertakes production and distribution of quality fish spawn and prawn post larvae, extends credit assistance, and technical and marketing support. Till to date 47,421 acres of water-body have been brought under fish culture and 234,412 farmers are involved in fisheries program.

Social Forestry
The social forestry program is being implemented since 1988 to make the people aware of the necessity of planting trees and to increase the number and variety of trees not only to meet the basic needs such as timber, fuel and fruit but also to restore the ecological balance. The program components are horticulture nursery, grafting nursery and agro-forestry. One of the objectives of the program is to encourage people to plant trees throughout the country.

At present there are 73,508 agro and social forestry farmers.

Agriculture
The agricultural extension activities can be broadly categorized into vegetable cultivation and crop diversification (rice, maize, wheat, cotton, sunflower). This program has been undertaken to increase the nutrition and income levels of the households by increasing agricultural production of VO members through technology transfer. Under this program VO members, who have less than 0.5 acres of land in each area, receive training, technical support, inputs like HYV and hybrid seeds, fertilizers, and have access to BRAC’s microfinance to obtain the resources for investing in farming. Interested small farmers, who have land between 0.5 and 3 acres, also receive training and technical support.

Crop diversification contributes to increased agricultural productivity. Besides maize and wheat, which are used for poultry feed, rice, cotton, onion, mustard and sunflower cultivation are also being undertaken.

By December 2002, there were 157,280 vegetable growers brining 67,114 acres of land under vegetable cultivation and 1,169.37 MT of seeds have been distributed.

Sericulture
Sericulture is a labor intensive agro-industry. Sericulture Program links the rural producers with urban markets. The main components of the program are:

a) mulberry cultivation (roadside, homestead and bush),
b) silkworm rearing,
c) reeling and weaving, and
d) marketing.

Besides, there are other components of the sericulture program, which include silk Seed Production Centre and Sericulture Resource Centre (SRC). At present, BRAC is operating 8 Silk Seed Production Centres, 6 Sericulture Resource Centres, and 3 Reeling Centres.

The Sericulture Resource Centre provides practical training to the rearers on mulberry cultivation and silkworm rearing. In 2002, there were 7,407 silkworm rearers and 1.4 million Disease Free Laying (DFL) have been distributed.

Vegetable Export Program

Poor farmers require better skills and knowledge of modern agriculture practices. They also need assistance to obtain a fair price for their produce. BRAC Vegetable Export Program seeks to link the poor Bangladeshi farmers with international markets to bridge the gap between the local producers and the international consumers, in addition to introduction of technical training and modern agricultural inputs. BRAC started this program in 1997-98 with particular focus on vegetables that have high demand in the European markets and could be grown in Bangladesh. In the first year, 27 tons of beans were exported successfully to England, France, Belgium and Holland and in 1999, 26 tons of fresh potatoes were exported to

Singapore

.

BRAC has exported 621 tons of fresh vegetables and 350 tons of potatoes in 2002 to the wholesalers and supermarkets in England, France, Germany, the Netherlands, Belgium and Italy in Europe, and the UAE, Bahrain, Singapore, Malaysia and Hong Kong in Asia. In addition to French beans, Broccoli and Green chilli, demand oriented new items have been selected with the total export target of 800 tons of fresh vegetables and 1000 tons of potatoes for the year 2003.

Rural Enterprise Project (REP)

As the scope of employment and income earning sectors are limited, new livelihood opportunities are essential for reducing rural poverty. Moreover, many traditional livelihoods are becoming marginal and new opportunities are opening up with growing urbanization and globalization. However, the poor may not be able to gain from these opportunities without support. This realization led BRAC to initiate the Rural Enterprise Project (REP), to encourage employment and income generation through entrepreneurship. The project is involved in innovating non-traditional activities and introducing them to the program participants. REP was formed in 1985 to find and test new opportunities for rural development. The primary objective was to experiment with various income generating enterprises that can be owned and managed by rural landless women.

One significant change that took place in REP was the inclusion of a new unit called Non-farm Enterprises Extension and Reinforcement (NEER) to intensify the non-farm job creation program. The objective is to create employment in the non-farm sector for rural women and BRAC School graduates to make them self-employed. The present women owned and run projects under NEER program are:

Till 2002, a total of 9,410 restaurants, 30,675 grocery stores, 5,468 laundries, 13,418 tailoring shops and 3,637 other micro enterprises were operated by women members throughout the country.

Role of Government Organizations in Poverty Reduction

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At first, to decrease the population growth rate by giving proper training and facilities of health and family planning training center.
To ensure the equal distribution of resources which is available in the country.
To create the employment opportunities for the poor by expanding and establishing cottage and small-scale industries.
To remove the poverty, it is necessary to increase the productivity by using modern technology and skilled manpower.
To create skilled manpower by providing proper training for the unskilled manpower.
We can reduce poverty through micro-credit facilities among the poor people.
All cultivable land can be converted into three-cropped land by means of irrigation.
To raise literacy rate by taking various programmes—Food for education programme, Compulsory primary education, adult education etc.
Facilitate agriculture development through institutional support and expansion of irrigation.
Increase basic physical infrastructure (roads, markets) in the rural area.
Promote participation of women in development activities.
Utilize the resource properly to reduce poverty.
Remove the social corruption for poverty alleviation.
Increase the awareness of poor people by teaching and proper training.
Various NGOs can play a vital role for poverty alleviation. So, we should take the opportunities of different projects and programmes of NGOs and association, such as--- Grameen Bank Prokalpa (GBP), Small Farmers credit project (SFCP) etc.
We can alleviate poverty by taking proper plan and utilization of resource.

Government Organizations:

The Economic Development Program (EDP) works with and for the disadvantaged rural people of Bangladesh, especially women, and it has a compelling vision of a society where the poor and disadvantaged will be able to achieve sustainable improvement in their livelihoods, attain a high degree of self reliance and manage their own affairs with dignity and freedom.

In the last three decades, with more than three and a half million rural women, it has been able to reach a large number of poor people. EDP has been working in all the 64 districts of Bangladesh and has a wide range of interventions including institution building, microfinance, sector program, social development and health intervention. EDP's greatest strength lies in its innovative development programs and learning from experiences.

Bangladesh has made great strides since its independence in 1971--in foodgrain production, prevention of famines, effective response to natural calamities, and achievements on the social front. Rural poverty, however, remains extensive. More than half of Bangladeshis are below the poverty line and about 90 percent of the poor live in rural areas.

"To reduce poverty, it is crucial to develop rural areas--where most of the poor people live. This study identifies ways of accelerating growth in rural areas. Poverty in Bangladesh must tbe reduced by helping agriculture and rural non-farm sectors grow faster and by strengthening rural institutions that empower rural people to improve their income and welfare.

"The study identifies the critical constraints that prevent Bangladesh from realizing its strong potential to increase agricultural and rural non-farm growth. It also draws lessons from different programs to develop rural institutions and reduce poverty in order to design the future strategy.

"The proposed rural development strategy addresses the critical constraints to rural growth and to the building of rural institutions within a medium-term time frame. The key propositions of the strategy are to: i) improve short-term food assistance and reform food policy, ii) reform policy environment and public sector programs for farm and non-farm growth, iii) invest in improved infrastructure, iv) improve the efficiency of the rural financial system, and v) build a strong local government system."

In Bangladesh, the approach to poverty alleviation, particularly reduction of income poverty, covers several channels. An important channel is economic growth. Although the impact of economic growth on poverty is somewhat indirect, high economic growth, along

with measures to influence the ‘quality’ of growth such that its poverty alleviating capacity is increased, is an important element of a successful anti-poverty strategy in the country. In addition, direct efforts to reduce poverty cover several routes e.g. capability–raising of the poor by education, health and nutrition interventions; targeted employment, and safety nets programmes; and improvements in non-material dimensions of well-being including gender gaps, insecurity, powerlessness and social exclusion. In short, the approach sets three broad imperatives in the fight against poverty:

First, opportunities for employment and productivity growth must be created so that incomes rise and the poor are able to move out of poverty; Second, measures must be put in place to ensure that access to basic services is equitable so that the poor can benefit; and

Third, special measures must be taken to reduce the vulnerability of the poor to unforeseen events and shocks.

Over the years, significant diversity has emerged among each of these broad channels. The growth enhancing interventions, along with economic sectors and infrastructure development, have covered elements of good governance and an enabling environment such that growth prospects are enhanced. Similarly, the direct approach to reducing poverty has been broadened to cover different programmes. Along with microcredit based employment programmes which rely more on self-employment generation, other types of income transfer programmes have been evolved. At present, the Government’s targeted programmes cover a broad range of activities: food aid to create safety-nets for the poor, building and maintenance of rural infrastructure, rural development programmes, primary and girls education programmes, microcredit and other specific welfare programmes. While the initial focus of most of these programmes was on ‘transfer elements’ to supplement consumption, create employment opportunities, and help the poor to acquire access to income generating assets, significant changes have taken place in their approach and design to strengthen the development impact of the programmes. While such diversity in targeted anti-poverty instruments serves the immediate needs of different poverty groups, this also raises a moot policy issue: What should be the relative priority of different instruments for ensuring accelerated poverty reduction? In view of significant complementarities among these programmes as well as observed differentials across different poverty groups, one probably may not suggest an ‘either-or’ approach. But certainly it is desirable to identify relative impact of different approaches on the poverty reduction process and generate priorities in specific contexts, given the resource constraints. In short, this will help the policy makers to move towards a more ‘optimal mix’ of targeted anti-poverty programmes.

Food Assisted Programmes

Bangladesh has one of the largest systems of targeted food transfer programmes in the world through which, since 1993/94, more than 1 million metric tons of foodgrains are channelled to the target population. The food assisted programmes generally act as conduits of transfer to enhance household food security and, in many cases, as a means of promoting human development of the poor. During the 1990s, resources channelled through these programmes increased significantly (Table 3.1). The share of foodgrains distributed through food assisted programmes in the Public Food Distribution System (PFDS) also rose sharply in the 1990s: from less than 30 per cent in the early 1980s to over 80 per cent in the late 1990s.14

Table: Profile of food assisted programmes

Source: Food Assisted Programme Documents.

Rural Infrastructure Development Programmes:

The rural infrastructure development programmes support building and maintenance of rural roads, bridges and culverts, small scale irrigation structures, development of trading facilities in rural markets, and creation of trading network. The Local Government Engineering Department (LGED), under the Ministry of Local Government, Rural Development and Cooperatives, is involved in the development of rural infrastructure including rural roads, growth centres, embankments and other physical facilities.

Another unique programme of ‘cash for work’ in rural infrastructure development is the Rural Maintenance Programme (RMP) which started in 1983. All the beneficiaries of RMP are women. The programme employs 41,000 destitute rural women (with land ownership of less than 0.5 acre) from 4,100 unions of 435 upazilas in 61 districts as RMP crews. They are employed on a daily wage basis for maintenance of 15 miles of rural earthen road throughout the year. The RMP crews maintain a total of 42,596 km of rural roads in the country and remain in the payroll for a period of four years after which they graduate from the programme. The crews are organized and provided with training on income generating activities during involvement with RMP to assist them in livelihood activities using their own savings.

The Rural Maintenance Programme (RMP):

This program is similar to FFW programmes and is implemented by Union Parishads with assistance of CARE-Bangladesh. With the dual objective of maintaining rural earthen roads and providing employment and training to destitute women, RMP covers about 4,100 union parishads in the country. In each union, 20 km of rural roads, built under IFFD-FFW programme, are maintained by a road maintenance association (RMA) comprising 10 destitute women. The RMA is responsible for maintaining the given stretch of road with quality monitoring done by a union parishad member. The union parishad and a Project Implementation Committee oversee the beneficiary selection process. The eligibility criteria include: being divorced, separated, or otherwise destitute; work. The participating women are enrolled in a four-year programme of RMP work and training during which they are paid Tk. 43 per day as wages (about one-fourth per cent is retained as savings on their behalf). During the last year of the project cycle, the women are given more intensive training in basic business management to help them in pursuing gainful activities after graduation from the project.

Rural-Urban Poverty

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On the basis of area poverty is classified into two ways. Such as, Rural poverty and Urban poverty. Actually, these two types of poverty are more or less same, but due to its locality we can find some differences between rural poverty and urban poverty.

Rural poverty: Rural poverty refers to the poor who live in rural area. Mainly the absolute poverty is seen in the rural area. On the basis of this assumption, we can find out some component of rural poverty. That’s are

Lack of sufficient employment opportunity
Unable to maintain a minimum standard of living
Lack of health facilities
Inadequate educational support
Poor housing pattern

Urban poverty: Urban poverty indicates the poor who live in urban area. Basically, the picture of relative poverty is clear in the urban area. From the definition, we can mention some component of urban poverty. That’s are

Lack of urban basic services
Inadequate recreational facilities
Socio-cultural backwardness
No use of electricity
Political weakness

From the above points, we can identify the differences between rural poverty and urban poverty in the following way;

The urban poor are more vulnerable to changes in market conditions; cost of living is higher in urban area.
Urban worker’s livelihoods depend on access to jobs, rural poor have better safety nets including network of relatives.
Urban exchanges are more monetized, making asset ownership and credit availability more important.
The ability of the informal urban sector to absorb the unemployment is limited.
Female-headed household the most vulnerable of the poor are more common in the cities.
The urban poor tend to pay more for services and live in more deplorable conditions.
Exposure to environmental risks is greater in cities.
The urban poor share fewer communal assets that could shield them from individual circumstances.

Women in Bangladesh

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The birth of a female child is rarely considered a happy incident. If a woman cannot have a male child, usually the husband remarries. The female child is also given less priority. They are given less love and affection by the family and the relatives. Female child is usually offered less nutritious food; less money is spent on their education. They are more abused and rebuked. They have to do large part of the household work.

These meanings are complementary rather than contradictory. Poor women do tend to be poorer than poor men; even the better-off households often have poor women as members; and poor women suffer most from external shocks. The negative impact of reform measures that slashed public expenditure on health and education has hit women hardest. It has increased their burden since it is they who try to compensate for the shortfall of public services. During the Asian financial crisis of 1997/98, there was clear evidence that rural women bore much of the burden of the reduction in incomes caused by falling remittances from the urban areas. Women function as a ‘safety valve’ when public social security systems fail (Kelkar and Osawa 2000). In the rural areas of many countries in Asia, there are more women than men among the ‘working poor’ than among the poor as a whole. In other words, the female proportion of the working poor is larger than the female proportion of the working non-poor (Bardhan 1993). Women are also disproportionately concentrated in the lowest remunerated categories of self and casual wage labor.

Bangladesh

, like other South Asian countries, has been described as a staunchly patriarchal society. In the countryside, men work in the fields and move about freely, while women are often secluded in their homes. Women's direct role in major household decision making also appears to be limited. Yet societies change. More women are working in Bangladesh is expanding industrial sector, more are using contraceptives, and more girls are attending school. Have these and other changes been accompanied by improvements in the status of women? Between 1982 and 1989, the Mother and Child Health/Family Planning Extension Project of the International Centre for Diarrhoeal Disease Research, Bangladesh, collected data from 7,433 ever-married women between the ages of 15 and 56. The survey focused on two rural areas that differ in ecological, economic, cultural, and political termsó Sirajgong and Gopalpur subdistricts in north-central Bangladesh and Abhoynagar and Fultala subdistricts in the southwest. Survey results from these two areas provide a unique opportunity to explore the changing status of women in rural Bangladesh. The objective of the study, summarized in this issue of Asia-Pacific Population & Policy, was to identify variations in the general pattern of low status for women and to assess the socioeconomic and demographic characteristics associated with womenís changing roles.

Table: Cumulative contribution of selected predictor variables to explaining variations in women’s decision-making authority: Total percentage of variance explained

Source: United States Agency for International Development

Why Rural Poverty

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The causes of poverty are more complex and no single factor is sufficient to understand and explain the dynamics of socio-economic process of poverty. However, impoverishment, illiteracy, unemployment, and underemployment may be identified as visible effect of poverty, but important causes of it are noted in a complex web of demographic, economic, social, political and natural factors. These individually and collectively affect access to economic resources and rural income distribution as well as economic status. There exists currently near consensus on the factors that sustain and propel the incidence of poverty. In this context, I would like to mention some effective factors that are directly or indirectly responsible to create poverty. Such as---

High population growth and density
Low level of economic growth
Uneven social structure
Low resource endowment and low productivity
Inadequate and inappropriate rural development
Adverse effect of terms of trade
Illiteracy
Unemployment and underemployment
Natural calamities
Political issues of rural impoverishment
Capital intensive development
Inadequate land reform
Defective delivery system
Low level of human resource development
Unequal distribution of income and productive assets
Lack of subsidiary occupation
Improper use of existing resources
Lack of transportation and communication system
Exploitation
High dependency ratio
Lack of awareness
Weak government etc

Recommendations on Poverty Alleviation

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On the basis of the analysis made in this study and review of government plans and programmes the following important recommendations have been suggested for poverty alleviation.

The interrelationship between population and poverty suggests that a change from large to small household size, norms and consequently reduction of dependency ratio are important approaches for poverty alleviation.
The equity and redistribution aspects should be the main focus of almost all policy issues such as agricultural growth, industrial development, employment generation, creation of educational facilities, rural development etc. so socio-economic equity, redistribution of assets and providing access to resources appear to be a basic precondition for lifting a society out of poverty trap.
Intensive use of agricultural land is an essential strategy for alleviation of rural poverty. Spread of HYV crops, modern technology, expansion of landless- managed irrigation schemes, adoption of modern inputs etc are also important strategies for higher production and alleviation of rural poverty.
Special emphasis could also be given on the development of basic need goods industries in order to create multiplier effect on rural income. in the rural industrial sector could be intensified, there would some expansion of job opportunity of poor.
Special programmes for asset forming, self-employment opportunities in non-formal activities like manufacturing, fishers, livestock, social forestry trade etc can be implemented under various institutional arrangements with inputs support like credit training and expansion support services for income generation and thereby help in reducing poverty.
As human capital development is an important precondition for poverty alleviation through its impact on production and development process, meaningful linkage between formal and non-formal education should be interwoven to cover the large number of people in rural areas.
Fiscal transfer from the center to local government is needed in order to enable the letter to undertake such economic activities as a industrial development, modernization of agriculture, improved infrastructure and trained and skilled manpower of backward region. This would reduce interregional differences in incidence of poverty.
A kind of safety need for the poor is to be created through various capabilities- rising programmes, targeted self employment schemes, expansion of landless- managed irrigation schemes for income support for poor female headed households etc. Both Government and NGOs are to be involved in implementing such programmes of poverty alleviation.
To alleviate poverty, it is necessary to allocate public resources in favour of the rural agro related programmes in a pronounced manner.
For implementation of anti-poverty strategies over a time spectrum, The industrial planning machineries as well as political, economic, legal and social system including the channels of production and distribution need appropriate restructuring and strengthening

Poverty alleviation is burning issue in our country. From the above analysis, it was observed that incidence of poverty was closely and inversely associated with education as well as basic needs. Poverty decreases with the increases of education level. It is also observed that education had tremendous effect on raising income, quality of life status and reducing the dependency ratio. These phenomena call for the strategies for eradication of illiteracy through large-scale informal and vocational training and mass literacy programmes along with the formal primary education. There are also formidable needs for adult as well as technical education to develop manpower with technical skill for technological transformation, socio-economic advancement and poverty alleviation.

Micro Finance

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Over the past two decades micro credit programs have emerged as one of the leading strategies in the overall movement to end poverty. The idea began when Bangladeshi economist Professor Mohammad Yunus first demonstrated that poor people, especially poor women, could produce near-perfect repayment rates. Since then, his innovative scheme has attracted a range of non-governmental and state-sponsored institutions that today reach over 16 million people in developing countries and have a total portfolio of $US 2.5 billion!

According to Oxfam, micro credit consists of "very small scale financial services, including savings, loans for emergencies, day-to-day living, and investment in productive activities" Credit is usually provided to groups of individuals or village organizations that use joint-liability (a.k.a. peer pressure!) to enforce loan repayment. Through group savings and loans, poor people very often increase their economic security and well being.

Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral, thus creating a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in Bangladesh without any collateral requirements. Professor Muhammad Yunus, the founder and managing director of Grameen Bank, reasoned that if financial resources can be made available to poor people on terms that are appropriate and reasonable, "these millions of small people with their millions of small pursuits can add up to the biggest development wonder."

The origin of Grameen Bank, chronicled in Give Us Credit, by Alex Counts (Times Books, 1996) and The Price of a Dream by David Bornstein (Simon and Shuster, 1996), can be traced back to 1976 when Professor Yunus, then director of the Rural Economics Program at Chittagong University, launched an action-research program aimed at examining the possibility of designing a credit delivery system capable of providing banking services to the rural poor. The "Grameen Bank Project" (Grameen means "village" or "rural" in Bengali) came into operation with the following objectives:

To extend banking facilities to poor men and women;
To eliminate the exploitation of the poor by money-lenders;
To create opportunities for self-employment for the vast number of unemployed people in rural Bangladesh;
To bring the disadvantaged, mostly women from the poorest households, within the fold of an organizational format that they can understand and operate; and
To reverse the age-old vicious cycle of "low income, low savings, low investment" into an expanding cycle of "low income, credit, investment, more income, more investment, more income."

The project demonstrated its strength in Jobra (a village adjacent to the University) and some of the neighboring villages during the period spanning 1976 to 1979. In October 1983, the Grameen Bank project was transformed into an independent bank by a government ordinance. Today, Grameen Bank is owned by the poor (and formerly poor) borrowers themselves. Borrowers (also called members) of the Bank own more than 90% of the shares, while the government owns the remaining shares.

Currently, GB is the largest rural credit institution in Bangladesh. It has approximately 2.3 million borrowers, 94% of whom are women. With more than 1,100 branches; GB provides services in 37,352 villages-more than half of all the villages in Bangladesh.

More than 4,000 people form 100 countries have gone through Grameen's training and exposure programs over the last ten years. Some of these people have returned to their countries and replicated the Grameen Bank model to benefit their country's poor people. More than 200 Grameen Bank replication programs in more than 50 countries have been established since the mid-1980s. Taken together, they have reached several hundred thousand poor borrowers with credit.

The conception and implementation if poverty alleviation credit programmes are often based on the broad principles of social banking, in several developing countries including India.

In the process of pursuing the broader objectives of banking, however, certain weaknesses crept into the system of banking in general and rural banking in particular.

Although efforts were aimed at distributing formal credit to the landless and near landless, credit largely remained concentrated on the landed population.
Lack of provision of consumption credit
Creation of non-profit making assets on account pf poor repayment of loans.

Small business at the market place or small enterprises such as home based poultry farming, carpentry, etc. Initial loan for them Tk. 12,000 (US$ 226) and yearly increase amount Tk. 2,000 - 3,000 (US$ 38-57). Loan Term-1 year and Service Charge-15%.

From the beginning of the microcredit program, up to December 2000, the total disbursed amount and service charges were about Tk. 29,638 million. Total loan realized was Tk. 25,055 million and the amount of outstanding was Tk. 4,583 million among 1,128,693 group members. From January 2000 to December 2000, Tk. 8,487 million was realized including Tk. 996 million as service charges.

NGO’s Small Business credit product is one of the important components for poverty alleviation and effective entrepreneurship development program. All the group members of NGO’s are involved in various types of income generating activities and providing its members with consistently high quality services specially loaning to the small business including farming, poultry, livestock, handicrafts, grocery shop etc. NGO’s feels that conducting small business needs experience, discipline, proper planning, manpower, financial management skill, marketing etc. Because in small business capital is limited and risk is more. NGO’s have disbursed Tk. 3,491,637,050(cumulated) up to December 31, 2000 to the small business members but also helped them providing technical supports to avoid the risks.

Measurement of Poverty

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Poverty is more than physical deprivation. It has social and psychological effects, which prevent people from realizing their potential. Poverty can be measured in different ways. But limited resources and manpower mean that this is difficult to do, both on a national level and at the level of the household. However, both national and international organizations are making efforts to improve the collection of socio-economic data with the aim of better analysis and planning. Now for the poverty measurement, we can explain mainly two broadest measurements. Such as, National level measurement and household level measurement.

If we want to measure the poverty status of a country we must consider the national level method. It has also four methods. They are,

Head count ratio
Basic Needs Index (BNI)
Integrated Poverty Index (IPI)
Food Security Index (FSI)

Head Count Ratio: In this process per capita food intake and per capita income are considered to measure the poverty. In this method we can divide the poverty into two types i.e. poor and absolute poor. In the context of per capita food intake, if a man take less than 2122 but more than 1805 kilocalorie food in a day is poor and if a man take less than 1805 kilocalorie food in a day is absolute poor. On the other hand, in the context of per capita income, if the per capita income is less than $375 but more than $273 is poor and if it is less than $273 is absolute poor. It can be expressed by an index.

Hp=Np/N.

Here,
Hp=Head-count ratio;
Np=Set of population below the poverty line;
N= Population size.

Basic Needs Index (BNI): BNI method is comparatively better than the pervious method. In this method is considered the access to health facilities and education as the main factor of poverty measurement. Infant mortality rate, no of physician for people, sanitation, supply of pure drinking water and adult literacy, primary school enrolment etc. are the components of this method.

In this method the index can take value from 0 to 1. If the closer the value to zero the country is more needy. In this method we can classified the total population into three groups. They are 1) very needy; 2) moderately needy; 3) relatively less needy. If the BNI value is less than or equals to 0.5 the people are very needy, if it is more than 0.5 but less than or equals to 0.75 the people are moderately needy and if it is greater than 0.75 the people are relatively less needy.

Integrated Poverty Index (IPI): It is the most effective method for calculation of poverty status. In this method, income gap ratio, growth of GDP per capita and head count ratio are considered. IPI is calculated by combining the percentage of the population below the poverty line, with the income gap ratio, the distribution of income among the poor and the annual rate of GNP per capita. The income gap ratio is the difference between the highest GNP per capita from the selected country and the GNP per capita of any particular country.

The IPI can take values between zero to one; the closer the value is to one, the worse of the poverty. Countries are classified in to three groups; severe poverty, moderately poverty and relatively little poverty. When IPI is greater than or equals to 0.4 the country is severe poor, when IPI is less than 0.4 but greater than or equals to 0.2 the country is moderately poor and when the IPI is less than 0.2 the country is relatively less poor.

Food Security Index (FSI): The FSI method considers food production and food consumption to measure the poverty. It combines measures of calorie availability, the growth of per capita energy supply, food production, food staples self sufficiency and variability in food production and consumption. Country, which have high food production potentials and/or high import capacity and which experience a low level of variability of production and consumption would have a high food security status as reflected in the relatively high value of FSI.

Actually, FSI ranges from zero to one. If the FSI value is greater than or equals to 0.8 is having a medium food security and less than 0.8 is having low food security status.

Further, when we conduct a study of the household level, we can collect the necessary data and information on the basis of the given method. The following components are considered to calculate the poverty status of a locality. Such as---

Material deprivation(food intake, lack of education, housing, health condition)
Isolation from geographic location
Alienation
Insecurity
Lack of assets
Dependency
Lack of decision making
Vulnerability to access etc.

Implications of rural Poverty on Rural Economy and National Economy

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Poverty is the main problem in our economy. The high population growth and low level of economic activities may be identified as important causative factors for high incidence of rural poverty. On the other hand, the urban-based industrialization has done little to mitigate the problem of unemployment. Thus the various economic factors have primarily operated to create high incidence of poverty.

Bangladesh

The incidence of poverty has decreased from 58.8 percent in 1991-92 to 49.8 percent in 2000. However, despite its 9 percent decrease, actual numbers of poor remain the same at 63 millions due to a high population growth. The incidence of extreme poverty has also decreased from 42.7 percent to 33.7 percent in 2000 and the number has also decreased from 45.2 million to 42.5 million. The poverty rate is higher at rural areas at 53 percent than at urban areas at 36.6 percent in 2000.

There have been remarkable improvements in human poverty indexes. Progress in reducing some aspects of deprivation was faster than in case of others. According to the UNDP report, total fertility rate has dropped from 6.3 in 1975 to 4.3 in 1991, and further gone down to 3.3 in 1997-1999. Accordingly, population growth rate has gone down from 2.9 percent per annum in the mid-1970s to 1.6 percent in the late 1990s. Infant mortality rate has declined from 104.6 per 1,000 live births in 1985-89 to 92.8 in 1990-94 and further to 66.3 in 1995-99. Maternal mortality rate is believed to have declined from 6 per 1,000 live births to 4.4-4.8. Declining mortality rates have led to an increase in average longevity of the population and life expectancy at birth improved from 55/56 years in the 1980s to 60 years in 1999-2000. The overall adult literacy rate increased from about 26 percent in the mid-70s to 29 percent and to 60 percent by 1999. The gross enrollment in primary schools has increased from 59 percent in 1982 to 96 percent in 1999. The gender gap in gross enrollment at the primary has significantly narrowed down in the order of 6 percent in 1999.

Alleviation of rural poverty through higher production and employment generation was the major objective of almost all the rural development activities. But the integrated rural development programmes so far undertaken have put emphasis on development of physical infrastructures, area development, irrigated agriculture etc. for economic growth which benefited the rich and large farmers more than the others. It was observed that about two-thirds of the total investment was allocated for those projects. In the recent years, rural development programmes have been undertaken with focuss on employment generations and increased production for poor households but only 3-6 percent of employment and production programmes have been allocated for landless poor [ (1984)]. However, the outcomes of these programmes fell far short of the expectations and their coverages are very small compared to the needs. Food for work programmes (FWP) also relieve some acute needs of the poor but they have no potential either for generating wealth for future investment or for alleviating poverty on a permanent basis.

Table: Annual Growth Rate in Bangladesh

Source: Recovery and Reconstruction Department, International Labor Office, Geneva

How Poverty Marginalizes The Rural Poor

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The effects of these biases are manifest in the degeneration of the productive potentials of the poor, leading to increasingly unsustainable use of natural resources and further deterioration of the production environment. There is a general lack of recognition of the real contributions of the rural poor, particularly in upland areas, to the well-being of Asia as a whole and even of the world at large — for instance through valuable environmental services such as carbon sequestration and protection of biodiversity.

Rapid population growth is exerting tremendous pressure on productive natural tion has been accentuated. For example, the overvaluation of exchange rates and persistent budget deficits has hurt the poor; the former through heavy taxes on the export crops pro duced by the poor, the latter through inflationary impact. And persistent budgetary deficits sometimes induce ad hoc cuts in public expenditure on the health and social services meant for the poor. Weak access to basic health, sanitation, and immunization, adversely affects their productivity and income, and ultimately etc.

Several interacting factors contribute to the process of marginalization:

• Anti—poor national policies

• High fertility

• Environmental deterioration

• Natural disasters

• Cultural and ethnic factors

• Exploitative intermediation

• International processes.

Available evidence shows that the ind peoples are being increasingly displaced from land ownership; this is evident, fbrinstance, in the state of Tripura, or the Thane district of Maharashtra State, both in India. The displacement of thee indigenous peo pies means that they will eventually belong to the classes of landless and marginal farm ers (Nathan 1998). Areas where the tribals still dominate land ownership, namely the hill forest regions are marked by a substantial lack of infrastructure. Some of these areas have been opened up essentially to extract timber, minerals, non-timber forest products (NTFPs) and other natural resources, but these investments have also enabled the advance of non-tribal populations into the area. The result is that the tribals are losing their best lands.

What little development assistance the uplai populations have received has — until recently — been guided by the primary concerns of the lowlands and mainstream soci eties. The conventional industrial and agrarian sectors rarely flourish in the hills and mountains due to strong comparative disadvantages in terms of production costs, for example. The uplands do have attractive assets, but past efforts to exploit their com parative advantages have tended to dispossess the local populations. Environmental services, such as controlled hydrological flows or carbon sequestration and the preser vation of biodiversity, are taken from them without any compensation. The current process of globalization in a context of weak property rights of the indigenous peoples enhances the risks of further marginalization.

Food:

For a developing country like Bangladesh where the main socio politico-economic concern is the mass poverty which results in hunger, starvation and impoverishment, lack of shelter, clothing, education etc., the income method is considered to be more appropriate for estimating the extent of poverty. As described earlier, this teethed involves estimating the income level needed to fulfill a predetermined calorie intake and non- food essentials for proper functioning and living in the society.

Overpopulation, the situation of having large numbers of people with too few resources and too little space, is closely associated with poverty. It can result from high population density (the ratio of people to land area, usually expressed as numbers of persons per square kilometer or square mile) or from low amounts of resources, or from both. Excessively high population densities put stress on available resources. Only a certain number of people can be supported on a given area of land, and that number depends on how much food and other resources the land can provide. In countries where people live primarily by means of simple farming, gardening, herding, hunting, and gathering, even large areas of land can support only small numbers of people because these labor-intensive subsistence activities produce only small amounts of food.

Nutrition:

Malnutrition is one of the most common effects of poverty. In developing countries, the poorest people cannot obtain adequate calories to develop or maintain their appropriate body weight. Poor children often suffer the most, commonly from a deficiency known as protein-energy malnutrition. In these cases, children lack protein in their diets, especially from an insufficient amount of mother’s milk. Protein-energy malnutrition leads to a variety of problems, including gastrointestinal disorders, stunted growth, poor mental development, and high rates of infection. Prolonged malnutrition can lead to starvation, a condition in which the body’s tissues and organs deteriorate. Long-term starvation almost always results in death.

In addition to caloric malnutrition, most poor children and adults suffer from severe vitamin and mineral deficiencies. These deficiencies can lead to mental disorders; damage to vital organs; failure of the senses, such as poor vision; problems conceiving or delivering babies; and gastrointestinal distress.

Even in the major cities of developed nations, the poor often have unhealthful diets. Resulting in part from a lack of health care and nutritional education and in part from the lower availability and higher cost of better-quality foods, the urban poor tend to eat too much of the wrong kinds of foods. The urban poor commonly eat foods that are fatty or fried, high in sugar and salt, and made of mostly processed carbohydrates. Their diets are often high in low-grade fatty meats, chips, candies, and desserts and low in vegetables, fruits, whole grains, and high-quality lean meats and fish. Such diets commonly cause obesity and hypertension, both of which can contribute to heart disease and other ailments.

Deprivation:

In most developed countries like Bangladesh, rates of mental illness are highest among the poor. The most common disorders associated with poverty are depression and anxiety disorders. Without meaningful, well-paying work and the resources and social affirmation that come with it, many poor people develop low self-esteem and feelings of worthlessness. People who are stressed by the uncertainty of where they will get their next meal or spend the night often develop high anxiety. Because the poor experience high rates of severe mental illness, they also have high rates of suicide.

Some poor people attempt to relieve feelings of anxiety and depression associated with poverty through the use of mind-altering drugs. A common drug among the poor is alcohol, which is legal and affordable. Many of those who drink develop alcoholism, becoming physically and emotionally dependent on drinking. Others use and often become addicted to more dangerous and often illegal drugs, including heroin, methamphetamines, and cocaine. Of these drug users, those who take drugs intravenously (by injection into a vein) and share needles with others also suffer from high rates of diseases transmitted through blood and other bodily fluids, including AIDS.

Mental illness and drug dependence demonstrate the difficulties of distinguishing between poverty’s causes and its effects. Mentally ill and drug-dependent people tend to have trouble holding steady jobs and maintaining relationships, causing them to fall into poverty. They may also have difficulty lifting themselves out of poverty. At the same time, in some cases poverty it appears to promote mental illness and drug dependence

Land:

In Bangladesh the Rural Poor has a very few land of their own. Most of the poor are landless farmers. They cultivate the lands of the rural elite class.

Feminization

The notion of ‘feminization of poverty’ was first used to imply that women were making up an ever increasing share 0 the world’s poor as a result of recession and cuts in public spending (Pearce 1978, Scott 1984, Rein and Erie 1988). The term has been used for any or all of the following situations:

• More women than men are poor.

• Poor women suffer more from capability deprivation than poor men.

• The severity of poverty is higher for women.

• Women face greater hardship in lifting themselves and their children Out of the poverty trap.

• There are poor women even within non-poor families.

Security:

Some experts believe that poverty leads people to commit acts of violence and crime. Anger, desperation, and the need for money for food, shelter, and other necessities may all contribute to criminal behavior among the poor. Other experts caution that the link of cause and effect between poverty and crime is unclear. In some cases, poverty undoubtedly motivates people to commit crimes, although it may not be the only factor involved. Other problems associated with poverty are often linked to crime. For example, to obtain money some poor people commit the crime of selling illegal drugs; others may steal to obtain the money to buy drugs on which they are dependent.

Comparison of Poverty

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Comparison with other countries:

None can ignore that every country has less or large amount of people who are poor. The all poor are not same characterized, they have different nature of poor, their measurement process is also different. In this point of view, we can easily compare the poverty situation of Bangladesh with other countries in the following way.

Table: Poverty status of different countries in 1977--90

HDI rank	Country	Absolute Poverty (%)	Education (GNP in %)	Health (GNP in %)
147	Bangladesh	50 (1998)	2.2	0.9
132	Pakistan	30	3.4	4.5
152	Nepal	60	2.9	0.7
134	India	49	3.2	3.2
86	Srilanka		2.7	2.3
127	Kenya	52	6.4	2.1
57	Malaysia	32	5.5	1.6

Source: Human development report-1993

Poverty

2009-02-18T01:04:00.001-08:00

“Now, too much of nothing
Can make a man ill at ease.
One man’s temper might rise
While another man’s temper freeze”

--------Bob Dylan

As people through out the world awake each morning to face a new day they do under very different circumstances. Some living comfortable homes with many rooms, they have more than enough to eat, are well cloth and healthy and a reasonable degree of financial security. Others and these constitute more than three fourths of earth 5.3 billion is much less fortunate. They make have little or no shelter and an inadequate food supply, their health is poor, they cannot read or write. They are unemployed and their prospect for a better life is black or uncertain at best. And examination of this global difference in living standard is revealing.

In recent times poverty alleviation has become a very fashionable activity in development discourse, research and action. The "establishment" - i.e. national and international power and professional structures - view of poverty puts the "poor" under an externally conceived "poverty line" and professes to want to get them above this line by giving them some kind of a "subsistence kit". Years of effort pretensions and discourses by the establishments have done little toward promoting the professed objective. Their statistics sometimes show some nominal progress, but this statistics itself is blissfully ignorant of the unfolding reality of life: new threats to the subsistence of people arising out of drastic decline in the quality of certain vital requisites for existence, some of which are included in the "subsistence kit" only very shoddily and some are totally ignored, today dominate the character of this reality. It is not in dispute that services like medical care, education, law and order and legal redress of inhuman oppression of many kinds, vital for living with minimum honor and security of life, body and property, have declined drastically in quality in recent years, implying in effect a fall in real incomes of people in terms of their "purchasing power" vis-à-vis these very essential services for subsistence. This alone prompts one to wonder whether there is a difference between "poverty watchers" and human beings! But looking beyond subsistence one has more reason to feel uneasy with the conventional treatment of the question of poverty.

Poverty
Poverty is a common term in the lexicon of development. Poverty implies deprivation of daily needs. The state of poverty can be judged from different angles. Poverty is widely recognized as a multidimensional problem involving income, consumption, nutrition, health, education, housing, crisis coping capacity, insecurity, etc. However, with the exception of income (consumption) measure, long-term trend in other dimensions of poverty is difficult to measure due to paucity of data. Focus is therefore on the income dimension of poverty supplemented by available evidence relating to its other dimensions. Many economists, social scientist and organizations define poverty from many angles.

According IBRD (World Bank), “poverty is the inability to sustain a minimum standard of life”.

Poverty does not depend on a single factor or determinant. It depends on many factors like economic, social, cultural, psychological determinants. Generally it can be defined,

“Poverty is not only the economic derivation but also social and psychological deprivation.”

According to C.T.Kurien, “ We shall ----- conceptualize poverty as the socio-economic phenomenon whereby the resources available to a society are used to satisfy the wants of the few while the many do not have even their basic needs met.”

There are three approaches to the conceptualization of poverty. Such as—absolute poverty, relative concept of poverty and externality concept of poverty.

Absolute poverty: Absolute poverty is lack of resources in an absolute sense. According to the definition of absolute poverty, poor are those who are unable to maintain a minimum subsistence level of living. This type of poverty is also known, as minimum needs approach or subsistence approach to the concept of poor.

Relative poverty: According to the some thinkers, minimum requirement, which is the base of subsistence poverty, can be determined only in relation to the general standard of living in the society. Relative poverty is nothing but the relative position of various income groups to each other. According to M. Rein. “Poverty can not be understood by isolation the poor and treating them as a special group.” Galbraith defines, “---- people are poverty- stricken when their income, even if adequate for survival falls markedly behind that of the community. Then they cannot have what the larger community regards as the minimum necessary for decency; and they cannot wholly escape, therefore, the judgment of the larger community that they are indecent. They are degraded for in the literal sense; they live outside the grades which the community regards as acceptable.”

Externality concept of poverty: According to this concept, poverty should not be allowed to the extent such that poor people become harmful to the rest, non-poor society. Discomfort and cost of the rest of the society is the crucial aspect of this concept rather than misery and plight of the poor. M. Rein attributed this concept of Smolensk who wanted this poverty measure to serve, as an index of disutility to the community as a result of the persistence of poverty.

Poverty is the condition of having insufficient resources or income. In its most extreme form, poverty is a lack of basic human needs, such as adequate and nutritious food, clothing, housing, clean water, and health services. Extreme poverty can cause terrible suffering and death, and even modest levels of poverty can prevent people from realizing many of their desires. The poor people struggle daily for food, shelter, and other necessities. They often suffer from severe malnutrition, epidemic disease outbreaks, famine etc. In wealthier countries—such as the United States, Canada, Japan, and those in Western Europe—the effects of poverty may include poor nutrition, mental illness, drug dependence, crime, and high rates of disease.

Extreme poverty, which threatens people’s health or lives, is also known as destitution or absolute poverty. Relative poverty is the condition of having fewer resources or less income than others within a society or country, or compared to worldwide averages.

The reasons for poverty are not clear. Some people believe that poverty results from a lack of adequate resources on global level— resources such as land, food, and building materials—that are necessary for the well-being or survival of the world’s people. Others see poverty as an effect of the uneven distribution of resources around the world on an international or even regional scale. This second line of reasoning helps explain why many people have much more than they need to live in comfort, while many others do not have enough resources to live.

Poverty Line:

Poverty line is the line or limit of poverty status, which indicate the per capita income or per capita calorie intake per day. Actually the line, which indicates the 2122-kilo calorie value in the calorie perspective and $ 375 in per capita income perspective, is the poverty line. On the other hand, the line, which indicates the 1805- kilocalorie value in the calorie perspective and $ 273 in per capita income perspective, is absolute poverty line. Poverty line is measured by various ways. On the question which method is to be used for setting poverty lines, it has been argued that the “food energy intake (FEI) method”, when the issue at stake is to establish the basis for a consistent poverty comparison over time and space. The another method cost- of- basic- needs (CBN) which making poverty comparisons is that it explicitly aims to control for differences in purchasing power over basic consumption needs, while the FEI method does not. Setting the non-food component of the poverty line is another contentious step. There is no agreed to the role played by the food energy requirements in fixing the food component of the poverty line.

Once the relativities of the poverty lines over time and space are agreed, the next step is to estimate suitable poverty measures. Three poverty measures capture three aspect of poverty---its incidence, its depth and its severity. The first of these measures is the head-count index given by the percentage of the people who live in households with consumption per capita, which is below the poverty line. The second measure is the poverty gap index, which is the distance below the poverty line as a proportion of that line. And the last, the squared poverty gap index (SPG) introduced by Foster, Greer and Thornback, defined as the mean of the squared proportionate poverty gaps. Now we can show the poverty line in the following way;

Table: poverty line and its limit

On the basis of per capita calorie intake (kilo calorie)
Types of poverty	Limit
Poverty line	2122
Absolute poverty line	1805
On the basis of per capita income ($)
Types of poverty	Limit
Poverty line	375
Absolute poverty line	273

Source: World Bank

Poverty gap:

Poverty gap is a situation which shows the poverty and income inequality at the same time. The people who lie under poverty line to bring them over this line which amount money is needed that is called poverty gap.

Here,
OP=Poverty level;
PV=Poverty lone;
OD shows direct relationship between income and the income recipients. In the figure OM amount peoples’ income is less than OP. So, OPA is poverty gap. So, OM/OX= no. of people stay at below poverty line.

In mathematically this gap may be expressed by the index.i.e.

Ip= S (PL-Yi )/PL.Np.
Given, (PL- Yi )>0,i=1,2,----------Np.
Here, PL=poverty line,Yi= monthly income of the poor household.

The poor:

The total population below the poverty line is now estimated to be more than 3.5 billion of which about 939 million is in rural areas. Asia has the highest share of these. Numerically, the most important are smallholder farmers and the landless. In addition, there are groups like artesian fishermen, nomadic pastoralists and indigenous ethnic tribal. Smallholder farmers are often in marginal areas where participation is inadequate, the soils fragile and vulnerable to erosion, and desertification poses a serious risk. All these processes have adversely affected indigenous peoples and others on the periphery as well. Artesian fishermen and pastoralists are particularly vulnerable to ecological damage and resource depletion.

We can define poor in two ways on the basis of per capita income and per capita calorie intake. They are poor and absolute poor. According to World Bank, “a man who take less than 2122 but more than 1805 kilo calorie food in a day is poor and who take less than 1805 kilo calorie food in a day is absolute poor”. On the basis of per capita income “if the per capita income is less than $ 375 the people are poor and if the per capita income is less than $ 273 the people are absolute poor”.

In the context of assets, the poor are a person or household who have less than 1. 5 acres land holding or property of equivalent value. According to the U.S government, a poor household is one whose total income is less than the amount required satisfying the minimum needs of household. Another way, we can say, “the poor are a part of the necessary furniture of the earth. A short of professional where the rich can practice their virtue when they are so inclined.”

Real Estate in the Economy of Bangladesh

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Importance of Real Estate in the economy of Bangladesh
Over the last 15 years the Real Estate development sector has made significant contribution to many sectors of our economy.

1200 families homes has created since 1985 in Metropolitan City
1000 acres land development for housing (For lower middle and middle income families)
Construction materials purchased Tk. 1000 crore
1200 construction worker employed by RE and pay Tk. 45 crore annually
Professional development and pay Tk. 2 crore annually (Architect, Engineers & Others)
5000 management staffs (Accountants, Supervisors) and pay Tk. 25 crore
VAT pay approximately Tk. 150 crore from 1993
Cement manufacturing industry get impetus by RED
2500 diploma engineer are engaged in the sector

Problems of Real Estate development in Bangladesh/Metropolitan City:
Lack of Government policy or cooperation as for example:

In 1989 the ministry of industries declared construction of residential complexes on commercial basis as an industry. However, today this notification from the ministry of industries is not recognized by the National Board of Revenue. Therefore this sector is not entitled to any benefit of industry.
Transfer fees of stump duty, highest in the world. In Metropolitan City 22% of total value paid by the purchaser as fees.
Housing is one of the basic needs and in almost all development countries 90% of the value of the property can be borrowed from the government financing institutions.

Only for middle and higher income groups
Destroys the harmony in sky line
Increase pressure on limited services
Traffic and public problems
Creation of air and light circulation
Lack of community space
Socio-psychological problems
Located/Clustered in and around CBD of Dhaka city

Some current problems on Real Estate Development

Different embargoes on high rise construction
In appropriate rules of housing development
Harassment of environmental directorate for environmental clearance
Lack of coordination between utility and agencies
Procedural delay in plan approval
Procedural delay in registration and transfer

Summary recommendations to boost Real Estate sector:

Coordination among all the concerned agencies including utility agencies must be ensured
For RAJUK approval of drawings, one window service need to be established
Government land can be allotted to the developers at government land price
Registration fee and procedures for the government and non-government land should be similar
There should be a law which ensures the implementation of DMDP Master Plan and Bangladesh National Building Code (BNBC) in 1993
Law and order situation should be drastically improved, so that terrorist activities do not occur in the site Building construction rules 1995 of RAJUK and other Metropolitan City needs to be totally reviewed
Institutional credit facility must be increased at a lower rate for low income households to promote housing for fixed income families
Representation of REHAB in decision making in RAJUK, WASA, DESA, TITAS and other concerned agencies.

Problems & prospects of Real Estate business in Bangladesh

Background information:

Dhaka heritage 400 years old
Last four decades recorded tremendous growth in population and area
3.5 million in 1981, 5.7 million people in 1991 within 171 sq. miles
Population will be 10 million by 2001
Housing problem acute; continuous deterioration of service facilities
Huge housing backlog; according to World Bank in 1981, 1.9 million housing units for 11.8 million urban population
Pressure on build able residential land is very high
High land price, 60%-90% consumer price index during 1974-1987

Housing in Dhaka City: Public and Private performance
Public sector housing (Performance):

Little success, supply less than effective demand
Large investment goes to benefits of the upper and middle class of people
Public Works Department (PWD), Housing & Settlement Directorate (HSD) are construction agencies for government accommodation
According to World Bank in 1981, only 7% of total housing stock was built by public sector and rest by the private sector

Private sector housing (Performance):

Housing development in the form of apartment development
Individual or company construct one or more buildings
Increase in real estate companies
20 years before buyers reluctance to purchase apartment
Increase in cost of land and construction
Wage income earners in middle east & other countries
Because of return influence, many apartment builders have come up in the market
In 1988, 20 developers engaged in Dhaka city
20 companies developed about 5000 new building units in 1990.
Considerable contribution for increasing the housing stock in Dhaka City

Prospects:

Delivered housing facilities to the urbanities
Utilization of minimum land
Planned residential development
Better environment
Employment opportunities
Tax return higher
Positive effects on city
Form and design of city

Problems of Real Estate Business:

Only for middle and higher income groups
Destroys the harmony in sky line
Increase pressure on limited services & lack of community space
Traffic and public problems
Creation of air and light circulation
Socio-psychological problems
Located/Clustered in and around CBD of Dhaka city (Why?)

Easy access
Proximity of supporting facilities of office
Higher rate of return on investment

Recommendations for Real Estate business:

No magical solution to solve the housing problems
High rate of population growth as well as high land value, apartment development should be encouraged in the future development
Walk up (5-6) storied apartment should be encouraged
Co-operation among the service delivering agencies
A private housing bank should be established
Proper rules and regulations for high rise construction
Zoning law for Dhaka and building height should be formulated and reformed
Lift, park, community, fire-fighting etc. should be provided
Loan, short and long term credit for housing construction

EIS

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When a development project is taken then its environmental consequence are evaluated, the evaluation are called EIS.

Factors/Consideration for new project in EIS:

The comprehensive review for EIS studies incorporates the economic impact along with the effect on employment, housing, and other aspects of new development. The following list prepared by the Urban Land Institute, shows what groups may be affected by a proposed project that would consider in EIS

Physical proximity:

Persons living or working on the land proposed for development
Persons living or working immediately adjacent to the proposed development
Persons in neighborhoods surrounding the proposed development
Persons within commuting distance (For example, one our by public transit) from proposed commercial & industrial development.

Business relationship:

Builders, REALTORS, bankers and others directly involved in the development
Owners and managers of business or property in the neighborhood

Political jurisdiction:

Citizens of the local jurisdiction containing the development
Citizens of immediately adjacent jurisdictions and of the entire metropolitan area
Citizens of the state and nation

Socio-economic and demographic:

Age group
Racial and ethnic groups
Persons of various income levels, from poor to affluent

Other interest groups:

Tourists
Landowners
Others

The long-term public interest:

All present groupings over time
Future generations

Hence the EIS must indicate how much of these groups will be affected by the proposed development. On the final analysis, the report must consider the long term public interest which will be influenced by the new project.

Elements/Main parts of EIS
The five main parts of an Environmental Impact Statement are given below:

The Probable environmental impact of the proposed action
Any adverse environmental effects that cannot be avoided upon approval of the proposal
Alternatives to the proposed action
The relationship between local short-term uses of the environment and the maintenance and enhancement of long-term activities
Any Irretrievable and irreversible commitments of resources that would be involved in the proposed action, should it be implemented.

Criticisms of EIS

Non-compliance
Overlapping jurisdiction
New environmental policies
Industry criticisms

Differentiate Between Sub-dividers & Developers

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The terms ‘Subdividers’ and ‘Developers’ are frequently used interchangeably and each has a distinct meaning.

Subdividers: A subdivider acquires undeveloped acreage, divides the tract into smaller parcels in accordance with government regulations, installs streets and utilities, and sells the parcels to investors or builders.

Developers: A developer, by combining land with a completed structure, advances the process a step further. Developments may include industrial parks, shopping centres, multifamily housing, or single-family residences. The developer is also responsible for financing marketing and sale to the ultimate user.

Road patterns in the subdivision plan:
In planning subdivisions these principles should be observed in road patterns:

Streets intersections should be at right angles to minimize traffic hazards. Lots with double frontage are uneconomical and undesirable and should be avoided
Intersections of minor streets with arterial or collector streets should be held to a minimum to avoid hazard and delay
Dead end streets should be avoided
Streets jogs with centre-line offsets of less than 125 feet should be avoided
Corner lots require greater widths than interior lots in order to provide setback of the dwellings from the side street

Broker & Agent

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Definition of Broker:
Generally Real Estate broker is a person who help buying & selling the real estate/real property. In the business sense, a real estate broker is a person or corporation engaged primarily in the marketing of one or more of the various rights in real property.

Basic function of broker is to negotiate price
Success or failure of a broker depend on his ability to bring together a buyer and a seller who are ready, willing and able

A broker business consists of:

Selling or leasing property or space in a building
Placing a mortgage
Collecting rent
Performing other services for a certain percentage of the money of the transaction.

Definition of Agent:

Anyone who is legally competent to enter into a contract may be an agent. A person capable of acting in ones owns behalf is capable of acting for another if proper authority has been given.

Kinds of Agents:

In terms of business to be transacted, Agents are 3 types:

General Agent: A general agent is authorized by the seller to transact all affairs in connection with a particular kind of business or trade or to transact all business at a certain place
Special Agent: It is authorized by the principal (seller) to transact a business affair or to do a special act. In real estate, for example, when a broker is authorized to purchase a particular house, the broker is designated as the special agent of the principal (seller)
The Universal Agent: It is authorized to do all acts that can be lawfully delegated to a representative.

Duties of the Broker as Agent:

Loyalty
Must account for money and property
An agent control delegate authority
Duty to obey instruction
Must not be negligent
The fiduciary concept
May not act for both parties
May not misrepresent the fact
Extravagant statements (Spending a lot of money)

Real Estate Mortgage

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Definition:

Mortgages are written instruments that pledge real estate as security for a debt. Without a debt, there can be no mortgage. In executing a long term mortgage, the borrower typically pledges real estate and relies on personal credit as security for the debt.

Elements of a mortgage:

An enforceable mortgage has the following elements:

Ø A mortgage must be in written form

Ø The parties to the mortgage must be legally competent (having the necessary ability/authority/skill)

Ø A clause of the mortgage must pledge real estate as security for the debt

Ø The debt must be identified, with specified terms of repayment

Ø The mortgage must include a valid legal description of the property it covers

Ø The borrower must have a mortgageable interest

Ø The foreclosure conditions should be stated

Ø The mortgage must be properly witnessed or acknowledge according to state law

Ø The mortgage must be delivered and accepted

Types of mortgage:

Ø Priority of liens: Up to this point it has been implicitly assumed that buyer made a down payment and then paid the seller by borrowing the balance under a long term mortgage

Ø Methods of repayment: Lenders and borrowers may select from a wide range of amortization plans. In some cases, the mortgage repayment plan may be adopted to differed payment or to partially amortized plans and their combinations

Ø Alternative mortgage instruments: The expression alternative mortgage instruments covers unique mortgages that represent ways in which borrowers and lenders adapt to new legal and economic conditions. Lenders now have considerable flexi in offering new types of mortgage.

Ø The type of property mortgage: Mortgages are adapted to the type of real estate security pledged. The most popular forms of mortgages deserve added comment. Example: package mortgage financing

Ø Mortgage covenants: Mortgage covenants are promises of the borrower and lender included as part of the mortgage. A typically covenants contain the following types:

1. The borrower shall pay principal and interest promptly when due

2. The borrower shall pay all taxes, assessments and other charges

3. The borrower shall keep the improvements which is damage by hazards

4. The borrower shall keep the property in good repair

5. The lender may make reasonable inspections of the property

6. Upon payment of all sums secured by the mortgage, the lender shall release the mortgage without charge to the borrower. Usually the lender holds the mortgage until the final payment.

Types of mortgage:

Ø The priority of liens:

Þ Up to this point, it has been implicitly assumed that a buyer made a down payment and then paid the seller by borrowing the balance under a long-term mortgage.

Þ To illustrate, assume that the seller conveys title for $75000. The borrower pays the seller S20,000 at the time of closing, providing for the balance of $55,00 from a lender in return for a 25-year mortgage repayable monthly at 13 percent interest per annum arid a promissory note for $55,00.

Þ The lender owns a first mortgage which has priority over other mortgages and loans executed by the borrower at later dates.

1. Second mortgage financing

Þ Suppose, however that tile buyer effects to pay the seller $10000 down securing the additional $10000 under a 10-year mortgage at 15 percent interest.

Þ The second lender holds a lien junior to the first mortgage.

Þ The second mortgage would usually include a statement that the mortgage is subordinate to the prior mortgage which is described according to the amount of indebtedness, the date of recording, the names of the parties, a legal description of the property, and other details

Þ Such an arrangement is often called second mortgage financing or junior lien financing.

Þ The borrower is advised to include a waiver in the second mortgage stating that the borrower has the right to refinance the first mortgage provided that the refinanced mortgage does not exceed the remaining balance of the first mortgage.

Þ Second mortgage financing is used by borrowers with relatively high incomes but with few assets.

2. Purchase money mortgage

Þ A mortgage given to a seller as part of the purchase price is a purchase money mortgage.

Þ The seller accepts a purchase money mortgage as a substitute for cash.

Þ In the preceding example, the seller might be willing to accept 1) $10000 cash from the buyer, 2) $55000 cash which the buyer obtains from a first mortgage and 3) a $10,000 purchase money mortgage.

Þ In this case, the purchase money mortgage constitutes a second mortgage and in some states does not require a promissory note.

Þ Alternatively, the seller could accept a purchase money mortgage for $65,000 and $10000 cash from the buyer.

Þ In this case, the purchase money mortgage would be a first lien.

Þ Since the borrower is not personally liable. the seller is secured only by the value of the real estate

Ø Methods of repayment:

1. Term mortgage

2. Level payment amortization

3. Variable payment amortization

4. Partially amortized mortgage

Ø Alternative mortgage instrument:

1. Variable rate mortgage (VRM)

2. Graduated payment adjustable mortgage loan (GPAML)

3. Graduated equity mortgage (GEM)

4. Equity participation mortgage (EPM)

5. Shared appreciation mortgage (SAM)

6. Reverse annuity mortgage (RAM)

7. Renegotiable rate mortgage (RRM)

8. Price level adjusted mortgage (PLAM)

9. Flexible loan insurance program (FLIP)

Ø The type of property mortgage:

1. Package mortgage financing

2. Blanket mortgage

3. Participation mortgage

4. Construction mortgage

5. Wraparound mortgage

Elements of a development lease

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The elements of a development leases are given in the following:

Introductory materials:

Ø Definitions (gross receipts, refunds, tax receipts)

Ø Land description

Financial covenants:

Ø Term of lease

Ø Rental

Ø Annual accounting

Ø Rental bond

Ø Performance bond

Ø Bonding companies

Ø Non-responsibilities notices

Ø Holding over

Improvement clauses:

Ø Improvements

Ø Plants and design

Ø Construction, maintenance, repair and alterations

Ø Completion of development

Other rights:

Ø Sublease, assignments and transfers

Ø Agreements for utility lines and streets

Ø Encumbrance

Ø Liens, taxes, assessments and utility charges

Ø Lessor’s paying claims

Insurance:

Ø Public liability

Ø Fire and damage insurance

Ø Unlawful use

Miscellaneous:

Ø Eminent domain

Ø Arbitration

Ø Default

Ø Attorney’s fees

Ø No partnership clause

Ø Term or trust

Ø Obligation of lessee

Ø Status of subleases

Ø Payments and notices.

Real Estate Lease

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Ø The lease is a contract between the owner (lessor) and the tenant (lessee). It is also a conveyance way of transferring exclusive use and possession to the tenant under the terms of the lease in returns for rent or other consideration.

Ø It is not uncommon to encounter a commercial lease of 50 pages or more outlining the duties and responsibilities of the owner and the tenant.

Ø Historically the tenant was given exclusive rights of use and possession as limited by the terms of the lease.

Elements of an enforceable lease:

An enforceable lease, at a minimum, must contains elements common to the requirements of a valid contract:

Ø A beginning and ending date

Ø Identification of the lessor and the lessee

Ø A legal description of the property leased

Ø The rental terms including the time and place of payment

Ø Signatures of the parties to the lease

Types of leases:

Leases may be classified by the method of rent payment. There are six main ways to vary rents:

Fixed rent leases:

Ø Fixed rents are generally limited to relatively short terms, one to three years.

Ø Without some means of providing rent increases proportional to inflation, owners are reluctant to commit property over a longer term in the face of expected price increase.

Graduated rent leases:

Ø For property under development, tenants may negotiate low rents during the early life of the property which are graduated upward as the property undergoes more profitable operation.

Ø For example, a land owner may rent his land over the first 2 years for Tk. 10000 per year, the next three years to Tk. 20000 per year, and the next five years for Tk. 50000.

Ø In short the owner accepts lower rents when the property is less profitable.

Price index leases:

Ø Leases that vary rent proportionately with changes in the consumer price or another index preserve the purchasing power of the owner.

Ø Neither party gains an advantage under a price index lease; the index lease maintains the economic position of the owner and tenant.

Revaluation leases:

Ø The revaluation lease requires selection of an appraisal board-usually appraisers selected by the owner and tenant and a third party-to reappraise the property of rental purposes.

Ø The specified time of revaluation will be stated in the lease.

Ø Acceptance of the revaluation is not compulsory on either party.

Percentage leases:

Ø Retail stores are often rented on the basis of minimum fixed rent with a provision that as gross sales reach a stated level the owner will be paid a percentage of gross sales.

Ø For example, supermarkets may agree to pay a minimum rent in addition to 1.5 percent of the annual gross sales over Tk. 2000000

Ø As retails sales increases, rents increases

Net leases:

Ø In the current context, net leases refer to leases that maintain the rent in constant price (Tk.)

Ø Such a lease calls for two types of rent:

1. Rent of the base year

2. Additional rent

Ø The additional rent equals the prorated share of operating expenses for the current year that exceeds the operating expenses of the base year.

Ø The increase in operating expenses is prorated for each tenant according to the ratio between the square footage occupied by the tenant and the total building square footage.

Ø Under these terms, the building owner merely earns a fixed, net operating income.

Ø The lease does not compensate for inflation.

Ø However it is common to have the base year rent adjusted annually according changes in the consumer price index.

Ø The index of the net lease is to give tenants a long term lease (over 10 to 15 years) and at the same time, protect the owner unpredictable increases in operating expenses.

Ø To serve this purpose, generally, owners must provide tenants with a statement of operating expenses to justify the claim for additional rent.

Real Estate Deeds

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Ø When private property was first recognized, a real estate transfer was accomplished by physically exchanging a clump of ground before witnesses.

Ø As the practice spread, such transfers were documented by written statements.

Ø These written statements evolved as deeds, which are defined as written instruments that convey an interest in real estate.

Ø The interest conveyed depends largely on the type of deed used for conveyance.

Ø A deed must be signed, sealed and delivered because it is a contract

Ø The deed must satisfy the requirements of the contract.

Types of deeds:

Various types of deeds are given in the following:

1. Warranty deeds:

Ø In the warranty deed, the seller makes certain promises or covenants to the buyers.

Ø These covenants are included only in warranty deeds:

Þ The covenant of seizing

Þ The covenant of quit enjoyment

Þ The covenant against encumbrances

Þ The covenant of further assurance

Þ The covenant of warranty of title

2. Special warranty deeds:

Ø Understandably, the seller may be reluctant to execute a warranty deed and make promises to enforce for acts committed before his or her ownership.

Ø A special warranty deed restricts liability to title defects occurring after the seller acquired title

Ø Although the special warranty deed includes the covenants of a warranty deed, the buyer’s remedy is restricted to covenants that were broken because of events that took place only during the seller’s ownership

Ø Suppose a timber company wants to sell 1,000 acres of land poorly suited to timber reproduction. If the company has reason to suspect that the title may be contested by unknown heirs or former married parties who have not released their claim, a special warranty deed would be advised. The company would accept title responsibility only for acts committed during its ownership. With incomplete knowledge of title before its ownership was acquired the company minimizes risks by conveying under a special warranty deed.

3. Quitclaim deeds:

Ø Among the deeds of conveyance, the quitclaim deed gives the buyer the least amount of title protection.

Ø No covenants are stipulated in this deed. The conveyance language of a quitclaim deed typically reads, “remise, release, and forever quitclaim”.

Ø Under this language, the seller transfers only the interest that he or she holds in the real estate described.

Ø If it is established that the seller had no interest, the buyer has acquired no interest.

Ø On the other hand, if the title is legally enforceable and without defects, the quitclaim deed may give the buyer title as good as that obtained under a warranty deed.

Ø With a quitclaim deed the seller makes no covenants or warranties of title.

Ø The quitclaim deed is most useful in releasing defects in title.

Ø A wife who fails to release her dower interest or a minor coming of an age may be asked to execute a quitclaim deed to release any claims against property conveyed.

Ø Similarly, a corporation that conveyed title with out paper signatures to a deed may relinquish any subsequent claims with a quitclaim deed.

Ø For this reason, most authorities recommend the quitclaim deed to clear up questionable titles.

4. Bargain and sale deeds:

Ø Such deeds fall between the warranty quitclaim deeds. In a bargain and sale deed, the key words required by statute typically read “grant, bargain, and sell.”

Ø The particular state statute identifies the required conveyance words.

Ø The bargain and sale deed conveys the land and not an interest in the land as in a quitclaim deed.

Ø The deed includes no warranties of title.

Ø However, the deed is somewhat superior to a quitclaim deed in that there is an implied assumption that the seller has possession and title.

5. Other deeds:

Ø Executors deeds

Þ The executor operates under the direction of the court.

Þ The title to the real estate of a deceased person who dies without a will or with a will that contains no power of sale will be sold under an executor deeds.

Þ In this type of deed, the full sales price must be stated and the executor warranties title only against his or her acts.

Þ No other warranties are extended by the executor who executes the deed under court approval.

Ø Correction deeds:

Þ In preparing deeds, the misspelling of names, errors in legal descriptions or important omissions are not unusual.

Þ If corrections are made on the original document, questions may be raised about their authenticity.

Þ It is usually impractical to make erasures on or additions to an executed deed.

Þ The best alternative is to execute a correction deed that states something like the following: “This deed is to correct the deed dated---------------between the grantor (seller) -------------------- and the grantee (buyer) ----------------------and recorded in deed book correction deed must conform to the requirements of an enforceable deed and establish the proper chain of title.

Þ The reference to recording refers to a public file containing deeds of record in the county recorder’s or other office designated for this purpose

Ø Sheriffs deeds:

Þ Lenders foreclosing on mortgage must follow statutory requirements that lead to the eventual public sale of foreclosed property.

Þ A foreclosure action may require that the property be sold at a public sale for the benefit of the lender.

Þ Conveyance at a public sale upon foreclosure will be under a sheriff’s deed or its equivalent.

Þ Since the sheriff acts for the public, no warranty or representation may be made on the title. Buyers assume risks of title defects.

Ø Trust deeds:

Þ In the states of California and Arizona, among others, the trust deed substitutes for a mortgage.

Þ In defect, a deed of trust conveys title to a trustee, a third party who holds the title for the benefit of the lender or the beneficiary.

Þ The borrower (trustor) executes the trust deed in return for a long term loan.

Þ If the borrower defaults on monthly payments, the terms of the deed of trust direct the trustee to transfer title to the lender in satisfaction of the debt.

Þ This procedure sidesteps the lengthier foreclosure procedures that are common to statutes regulating mortgages

Ø Deed of surrender

Ø Committees deed

Ø Deed of gift

Ø Guardians deed

Ø Referee’s deed in foreclosure

Ø Referee’s deed in partition

Ø Cession deed

Ø Deed of release

Real Estate Contracts

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There are various forms of real estate contracts in real estate transactions. Generally, the contracts control the transaction involving the seller, buyer, broker, lender etc.

Types of contract:

Valid contract: A valid contract refers to an instrument that satisfies all legal requirements. A valid contract contains all the essential elements required by law.

Void contract: A void contract has no legal effect. The parties to the contract have no legal agreement; they have no legal obligation that can be either ratified or enforced. A void contract is for practical purposes no contract. Any contract for an illegal purpose would conform to this definition.

Voidable contract: It may be enforced or rejected at the option of one of the parties. It is also unenforceable against the same party. The case arises in a contract involving a minor. The minor has the option of holding the adult to the contract, yet the adult may not enforce the contract against the minor. The contract is voidable by the minor.

Unenforceable contract: An unenforceable contract, in the case of real estate would be an oral contract conveying an interest in real estate. Although, the contract might be valid between the parties, it would be unenforceable if either party elected not to perform under his or her oral agreement.

Express contract: Most real estate contracts are express in that the parties declare terms, conditions and their intended by written or oral statements.

Implied contract: It is an agreement evidenced by acts and conduct. Suppose that in the absence of a written agreement, a managing agent arranges for the replacement of a broken window in a rented dwelling. The owners inspect the word and have no comments. It is implied that the owner consents to the repair.

Bilateral contract: It refers to a promise that is exchanged for a promise; “I will pay you TK. 5000 to reproof my house.”

Unilateral contract: It is promise that is exchanged for an act; “I will pay you a commission of 7 percent if you sell my house during the next 60 days”

Elements of an enforceable contract:

In writing

Parties competent to contract

A lawful object

A consideration

An offer and acceptance

A legal description

Proper signatures

Real Estate Instrument

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Ø Real Estate Instruments are those that have been developed for conveying and leasing real estate in legal ways. It is important to acquaint the real estate practitioner with the main elements of real estate instruments commonly used in trade.

Ø In negotiating, developing and managing real estate, it is essential to know clearly about the real estate instruments.

Ø Contracts, deeds, lease etc are treated as real estate instruments.