Social safety net: Approach not a good fit for multiple crises

The need for expanding the coverage of social protection schemes with new approaches has never been felt so badly than now as people are struggling to keep their heads above water amid one crisis on top of another.

First, there was a two-year long pandemic that plunged thousands into poverty. As they saw their livelihoods bounce back with a decent economic recovery, then came the war in Ukraine.

The unforeseen event has already caused food inflation because of supply chain disruptions, putting tremendous pressure on people since their cost of living went up and purchasing power weakened.

So, when Finance Minister AHM Mustafa Kamal placed the national budget for 2022-2023 fiscal year in parliament, all eyes were fixed on the government's measures to protect the vulnerable groups, who are feeling the squeeze of rising inflation that hit 6.29 percent in April.

However, the proposed budget did not offer much hope for them as the government did not devise new approaches in the social safety net schemes to deal with the multiple crises. It seems more like old wine in a new bottle.

The finance minister emphasised on the ongoing schemes with a proposal to increase the number of beneficiaries and assistance in some of the programmes.

Kamal yesterday proposed increasing the allocation by 5.5 percent year-on-year for the social protection programmes as he recommended allocating Tk 113,576 crore, up from the outgoing fiscal year's Tk 107,614 crore, for social safety net programmes in 2022-23 FY.

The amount is 16.83 percent of the total budget outlay and 2.55 percent of the gross domestic product (GDP).

Economists, however, stressed the need for revamping the safety net in tandem with the needs of the people, but also making it more efficient.

"We have to be more realistic," said noted economist Qazi Kholiquzzaman Ahmad.

In terms of inflation, the country is still in a better position than many others. However, there is a possibility that things could take a bad turn in the coming days, he said.

Kholiquzzaman, also the chairman of Palli Karma-Sahayak Foundation (PKSF), said the country was making a decent recovery from the pandemic when the war in Ukraine began. It took global commodity and oil prices to higher levels. There will be an adverse effect on Bangladesh's economy as well.

"We have to take measures keeping these factors in mind," he said, suggesting that the government should double the number of beneficiaries from 50 lakh who can buy rice for Tk 10 each kg to relieve the pain of soaring commodity prices.

Binayak Sen, director general of the Bangladesh Institute of Development Studies (BIDS), suggested introducing a rationing system for the affected people rather than giving cash support to them.

He said the government can provide rice at a cheaper price for the next six months. For that, the government has to buy rice from the domestic market and store it. But the problem is, he said, even if the government buys the staple, it cannot stock due to its inadequate storage capacity.

"We could not make fully operational the eight silos built in the public sector in the last decade. Someone has to take the responsibility for this."

He said cash support could be given to the affected people. "Providing cash support will help enhance people's purchasing power, but there would be an inflationary trend in the overall food market," said Binayak.

The government's social safety net programmes are faced with two major challenges.

First is delivering the support to intended beneficiaries as there were examples of irregularities such as inclusion of ineligible people with political connections in the list of beneficiaries leaving many genuine ones out.

Second is the lack of accurate data. The government does not have a central database of the people who are in need of the assistance. So, when the government started providing a cash support of Tk 2,500 to people hit by the first Covid wave in 2020, allegations of anomalies in the list of beneficiaries cropped up, forcing the authorities to halt midway.

Experts said the government must ensure that the process is fair and benefits reach the deserving people. They also emphasised on establishing a central digital database for social safety net programmes to make the process more accessible and accountable.

Kholiquzzaman said, "Although things have improved, we need to think how effectively the government benefits could reach the targeted people.

"The work on preparing a digital database is going on and the government needs to finish it fast. This database will come handy in future as well, because a large number of people would require assistance in the coming days."

He said the government should consider the fact that a huge number of people belonging to low-income groups could fall below the poverty line because of the rising cost of commodity prices and living.

"We need to keep this perspective in mind and take measures accordingly," he added.

Around 115 social safety net programmes are currently being implemented by 24 ministries, a large number of the programmes suffer from overlapping in various forms due to a lack of coordination and proper monitoring. Besides, ensuring transparency and accountability remain major problems.

WHAT'S IN BUDGET PROPOSAL?

In his budget speech, the finance minister yesterday said 29 percent households have already been covered by social safety net programmes, and budget allocations have increased almost eight-fold compared to the allocation made in the budget for FY2008-2009.

He proposed increasing the number of beneficiaries for specially abled persons by 3.57 lakh to 23.65 lakh in the FY 2022-2023 in place of 20.8 lakh. The rate of monthly allowance will be increased by Tk 100, from Tk 750 to Tk 850, he said, proposing to allocate Tk 2,429 crore as disability allowances.

Kamal also proposed increasing the number of beneficiaries of maternity allowance to 12.54 lakh in FY2022-2023 from 10.45 lakh in the outgoing fiscal year.

Poor pregnant mothers in rural areas and low-income lactating working mothers in urban areas get the allowance under the "Mother and Child Support Programme".