Allocate more for social safety nets

Development campaigners yesterday urged the government to increase allocations for social safety net schemes as the existing fund is inadequate to cushion the poor from vulnerability and lift them out of poverty.

“The expenditure is inadequate from the macro point of view. The allocation must be increased to make it meaningful,” said MM Akash, professor of economics at Dhaka University.

The expenditure of middle-income nations for social safety nets falls between 6 percent and 8 percent of their gross domestic product.

On the other hand, the allocation is equivalent to 2.2 percent of GDP in Bangladesh. “The policy-makers want to keep the rate unchanged until 2020, which is the most worrying part,” Akash said.

His comments came at a discussion on social protection strategy and budget, organised by the Prothom Alo in association with the National Forum for Social Protection (NFSP), Manusher Jonno Foundation and the British government's development arm DFID.

His remarks are based on analysis of allocations under social safety net schemes from fiscal 2009-10 through to fiscal 2015-16.

The government allocated Tk 16,000 crore in fiscal 2009-10 and Tk 37,000 crore in fiscal 2015-16 for social safety nets.

The daily average per capita allocation stood at Tk 5 for the 8.52 crore recipients in fiscal 2009-10 and at Tk 7 for 9.08 crore recipients in fiscal 2012-13.

Between 25 percent and 50 percent of the state support does not reach the real recipients because of corruption, wrong targeting and leakage, he said.

Currently, at least four crore people live below the poverty line in Bangladesh. But the number may go up to 8-10 crore if $2 a day is taken as the poverty line income as that will include the vulnerable poor as well, according to Akash.

The vulnerable poor live slightly above the poverty line but run the risk of falling back into the trap.

Some 145 social safety net schemes under 23 ministries suffer from huge overlapping in beneficiary selection, and lack of coordina-tion, transparency and accountability, he said.

“There is no doubt that the allocation for social safety nets is scanty,” said Towfiqul Islam Khan, research fellow of the Centre for Policy Dialogue.

Some 27 percent of the allocation under social safety net schemes goes for pension for government employees, meaning the true allocation for the poor is actually less, he said.

“The government employees' pension scheme should not be counted as part of the social safety net.”

Khan cited the goals laid out in the planning ministry's national social protection strategy or NSPS and the finance ministry's medium-term budgetary targets and said the objectives of the two vary.

For example, the NSPS aims to bring 55 lakh senior citizens under the elderly allowance scheme by 2018, whereas the finance ministry puts the number at 30 lakh in its medium-term budgetary targets.

A similar difference is also seen in budgetary allocation and allowance.

“This indicates a lack of coordination between finance and planning ministries,” he added.

Shaheen Anam, executive director of Manusher Jonno Foundation, stressed the need for improved management of social safety nets so that an increased number of the poor benefit from those schemes.

Rasheda K Choudhury, director of Campaign for Popular Education and convener of NFSP, urged the government not to increase the allocation for unproductive sectors.

Corruption eats up 2 percent of GDP and violence against women also costs a similar percentage of GDP, she said. “We can increase allocation for social safety nets by reducing corruption and violence against women.”

Choudhury called for introducing mid-day meals in schools, as it helps improve the quality of education.

“It will be very beneficial. It should be seen as an investment and we will get a return in future.”

Benedict Alo D' Rozario, executive director of Caritas Bangladesh, said the beneficiary selection process should be made participatory at grassroots level.

He also called for allocation for the poor in hilly areas under the safety net schemes.

Shafiqul Islam, country director of ADD International Bangladesh, said political consideration determines selection and allowance under the social safety nets.

“You still have a poverty gap because of wrong targeting,” said Goran Jonsson, senior programme adviser to the UNDP Bangladesh.

“It is very important that you have to have enough allocation. Allocation in social protection is an investment. It should not be seen as a cost.”

Naved Chowdhury, poverty and social protection adviser of DFID in Bangladesh, said the total allocation for social protection should be raised gradually from 2.2 percent of GDP to 4 percent and later to 6 percent.

“Our country is on the way to becoming a middle-income country. We should also aspire for a change in budgetary allocation and for increased allocation for social safety nets.”

Palash Kanti Das, assistant country director of Poverty Reduction at UNDP Bangladesh, said policymakers should keep in mind the poverty pockets in the country during budgetary allocations.

Planning Minister AHM Mustafa Kamal, however, denied the allegation of widespread wrong targeting of beneficiaries under the safety net schemes.

“People are more conscious today,” he said, adding that the government has taken 20 projects to reduce poverty and increase the capacity of the poor.

He said it would not be possible to register development in a real sense if anyone remains excluded. “Economic progress here means progress of all. We will leave them in such a position that they do not look behind.”

“Our tax to GDP ratio is very low. We can do more for the poor if we can raise the revenue collection,” he said, while stressing the need for concerted efforts from all stakeholders to stop leakage and improve coordination.

Tofayel Ahmed, co-convener of NFSP, said the government should link tax payment with a universal pension scheme to encourage people to pay tax.

He said the government can transfer a portion of the tax receipts towards the pension scheme for taxpayers.

Taxpayers currently do not see any benefit from paying taxes because they take various services such as healthcare from the private sector, he added.

Abdul Quayum, associate editor of Prothom Alo, moderated the discussion.