Safety net plans come under fire

Policymakers yesterday came down heavily on the proposed National Social Protection Strategy that advocated for covering half of the population under social safety net schemes.
“The country's poverty rate is now below 30 percent, then why should 50 percent of the population be eligible for social transfers?” said Atiur Rahman, governor of Bangladesh Bank.
Safety net programmes should be designed for one third of the population, he said.  
“Resources would be much better served by increasing the transfer size to the poorest than by distributing it to such a large number of non-poor people.”
Rahman's comments came at a dialogue on the draft National Social Protection Strategy of Bangladesh, organised by General Economics Division (GED) of the planning commission at the auditorium of National Economic Council at Sher-e-Bangla Nagar.
Finance Minister AMA Muhith also echoed the governor's view. “Coverage of the social safety net schemes should be fixed in line with the current poverty rate,” he said, citing the country's extreme poverty rate to be 11 percent and poverty rate 26 percent.
Muhith went on to underscore the need for giving emphasis on social protection, pension scheme and social security for all in the proposed strategy.
The draft policy also came under fire from Planning Minister AHM Mustafa Kamal, who said the draft seems to be “copied from the Rwanda model”. “But why should we copy such a model?”
The BB governor also opposed the proposal to introduce mixed methods for targeting beneficiaries, while calling for the Bangladesh Bureau of Statistics to be given the responsibility to select the beneficiaries.
It is best to have agencies who select beneficiaries be separated from those who implement the transfers as this reduces chances of leakage, he said.
The proposed social protection strategy will focus on expanding coverage of core schemes for the most vulnerable members of the society, which includes children, elderly and the disabled.
The aim is to identify the high priority schemes and make the system more inclusive by incorporating a higher proportion of poor and vulnerable people within it, said GED member Shamsul Alam, who presented the highlights of the draft policy. The policy's implementation is likely to start in July 2015.

All food transfer programmes that are part of the proposed strategy will be converted into cash transfers except school meals and therapeutic feeding for children, he said. The only food programme that will continue under the strategy is the open market sales managed by the food ministry.  
The draft proposes a number of programmes for children from poor and vulnerable families such as a child grant of Tk 800 per month up to the age of four and stipend of Tk 240 per month for primary and secondary school going children.
There would also be child disability benefits, school meals programme, orphans' programme and legal provision to ensure that abandoned children receive financial support.
A citizen's pension of Tk 800 per month will be provided to those aged 60 years and above and belong to the poor and vulnerable population. It will, however, not bring any change to the existing government service pension.
The draft policy said the government will introduce legislation to establish a National Social Insurance Scheme that makes it obligatory for all private enterprises in the formal sector to offer a contributory pension programme for all employees.
It also reviews options to facilitate the development of private voluntary pension, which are open to all citizens irrespective of occupation or formality of employment.
The government also plans on providing support to vulnerable women by way of a minimum income guarantee and ensuring their ability to engage in labour market.
The draft recommends providing all new mothers with maternity insurance within a new national social insurance scheme.
Legislation will be put in place that will make it compulsory for private sector employers with more than 50 employees to provide childcare service for both female and male employees.
The existing ministry of social welfare will be converted into ministry of social development by July 2014 to serve as the coordinating ministry for implementing the strategy.
Under the auspices of the new ministry, a national social security agency will be created that will be responsible for the delivery of all social protection schemes.
Mashiur Rahman, the Prime Minister's adviser for economic affairs, however, is opposed to setting up a separate ministry for implementing social protection schemes.
Currently, Bangladesh has 95 social safety net programmes that are being implemented by 22 ministries and 35 agencies, said Cabinet Secretary M Musharraf Hossain Bhuiyan, who is also the chairman of the core committee of the draft strategy.
The allocation for the safety net schemes was estimated to be $2.9 billion for fiscal 2012-13, amounting to 2.2 percent of GDP. The sixth Five-Year-Plan envisages that it would be 3 percent of GDP in 2015.