The urban poor must not be left in the cold

The paradox of Bangladesh's rapid urbanisation is becoming increasingly evident. Despite a continuous influx of people into towns and cities, social protection schemes remain largely rural-focused, leaving the urban poor and vulnerable dangerously exposed. These schemes are insufficient and misaligned with the country's demographic and internal migration realities, according to a new report from the think tank Research and Policy Integration for Development (RAPID).

Towns and cities—home to a burgeoning population grappling with the acute challenges of joblessness, housing insecurity, and rising living costs—account for only one-fifth of the total beneficiaries of government social protection schemes, as per RAPID. While these programmes were originally created to combat rural poverty and vulnerability to natural disasters, they have failed to evolve at the pace of the nation's development. As a result, the exclusion rate for extremely poor households in urban areas stands at a staggering 64 percent, far exceeding the national average.

This imbalance is visible across key areas. For instance, education stipends at both the primary and secondary levels overwhelmingly benefit rural households. The same applies to allowances targeting widows, deserted women, persons with disabilities, and elderly citizens, with over 80 percent of recipients in most of these schemes residing in rural areas. There are exceptions, of course, such as pensions for retired government employees and allowances for freedom fighters, which have a larger share of urban recipients, but even then, rural beneficiaries remain significant. This is a serious policy gap, and it is widening.

While the government acknowledges the problem and claims to have plans to address it, the scale of the challenge is immense. The 23 schemes currently designated for the urban poor account for a mere four percent of the total social protection budget, while programmes for rural areas claim 27 percent. The government's own assessment suggests it is spending about $1 billion annually on social protection in urban areas, yet the actual need is estimated to be seven to eight times that amount.

Besides funding constraints, the social protection programmes are often undermined by targeting errors and inadequate benefit levels, diminishing their impact on poverty. Resources are often misdirected, failing to reach the most vulnerable. To bridge this gap, the government must undertake a substantial policy shift, recognising that the face of poverty is changing as rural populations migrate to urban centres following natural disasters and river erosion. With its 560 urban centres, including 330 municipalities and city corporations, the country needs to rebalance its strategy to acknowledge the growing urban poverty. A modern social protection system requires a comprehensive, data-driven approach that aligns spending with these new realities and the evolving needs of both its rural and urban populations.