Expanding safety nets

The think tank SANEM made some pertinent budgetary observations at a press conference held at the BRAC Center Inn in Dhaka on Monday. According to SANEM, the government’s priorities on social safety, education, health and employment generation set in the 8th Five-Year Plan have not been reflected in the proposed budget for the FY23. The budget did not offer increased allocations for these sectors. The speakers at the press conference stressed that the government should increase social safety allocations.

SANEM research director Dr Sayma Haque Bidisha pointed out that the old-age cash allowance has been kept at Tk 500 for many years. And the OMS allocation has decreased to Tk 17.20 billion. She stressed that the per capita allocation for core social safety net programmes has to increase in line with the rising inflation.

SANEM’s views have merit. Social Safety Net Programmes have acquired extra significance as the Covid-19 pandemic has caused grave and disproportionate impacts on Bangladesh’s marginalised groups. According to a survey by BRAC the number of “”new poor”” in Bangladesh stood at 24.5 million, or 14.7 per cent of total population due to fallout of Covid-19 pandemic. The perils caused by the pandemic can be overcome with serious and well-intentioned steps. In Bangladesh the demands for greater coverage under social safety nets are growing and this cannot be overlooked.

It has to be admitted that the allocation of public expenditure on SSNPs has steadily been increasing over the recent years. However, in Bangladesh, even higher budgetary allocation is not working because of poor targeting and unplanned distribution. The core issue in Bangladesh, more than the overall resources devoted to social protection, seems to be around how well these resources are deployed. 

Social Safety Network is a combination of legislation and tax-funded government initiatives to protect the weakest and most vulnerable members of society. In some countries, Social Safety Network Programmes are all-encompassing. Some Scandinavian countries have what is known as ‘’womb to tomb’ care for their citizenry. In countries like Bangladesh, an economically weaker segment is always vulnerable to the poverty trap.

SSNPs are necessary to alleviate poverty in an economy that takes long to trickle down benefits to the poor and disadvantaged. Social safety nets build human capital through greater contributions to the economy and allow people to be more productive without having to worry about their basic needs being met.

Containing poverty is inevitable because if left unchecked, it might gradually take the relatively well-off sections into its fold. Poverty and prosperity can’t go together. Apart from a moral justification for helping the poor, there is a strong macroeconomic justification for Social Safety Nets. Unfortunately, according to the latest rankings, Bangladesh came in 28th out of the 35 Asian countries surveyed in providing social protection for its poor and vulnerable citizens. Neighbouring countries like Nepal, India, Pakistan, and Afghanistan have fared better in the Social Protection Index (SPI) of the Asian Development Bank (ADB).

The authorities concerned have to prepare a detailed database of the number of people living below the poverty line. The database will help the stakeholders understand the needs of different target groups and strategise result-orientated plans. Efficient management of the schemes, efficient use of resources, and plugging the loopholes in the distribution process are crucial in making the social safety nets more effective.

In Bangladesh, the failure to support large numbers of poor and vulnerable people is leaving them exposed to risks and unexpected difficulties like unemployment, ill-health, and natural disasters. A large number of people are still not getting the benefits of the SSNPS due to the presence of targeting errors, corruption, weak monitoring, and faulty selection criteria. The extremely poor are yet to get the optimal benefits from the programmes. The number of beneficiaries would be higher if the government could solve the targeting errors.