World Bank: Bangladesh needs better allocation in social protection programs

A recent study by the World Bank found that reallocating existing social protection program coverage to the poorest could reduce the overall poverty rate from 36% to 12%. 

Currently,  social protection programs provide good coverage in rural areas but according to the study, almost one in five people in the urban areas are also living in poverty.

Therefore, social protection programs need rebalancing in geographic allocations between rural and urban areas.

Only about 11% of people in urban areas are covered by social protection programs, whereas 19% of the population are poor. On the other hand, social protection programs reach 36% people in the rural areas, where only 26% are poor.

The research findings were revealed at a virtual launch of the new World Bank report, “Bangladesh Social Protection Public Expenditure Review”, on Thursday. 

The report notes that in order to allocate resources to the right types of programs, Bangladesh needs to strengthen the categorization of social protection programs for better resource allocation, report and monitor strategy, set up mechanisms and financing for shock responsive programs in an efficient and cost effective manner, and increase the scale and scope of labour market interventions, including economic inclusion programs. 

Dr Hossain Zillur Rahman, chairperson of Brac, said that urban poverty was the emerging challenge and it had rightly been recognized in the report. 

“There are these extreme poverty groups like street children in the urban areas who need social support,” he said. 

He also said that the government needed to focus on reducing child poverty in the coming years and therefore poor children required effective coverage of social protection programs and an increase in the size of benefits. 

“If the benefit size increases, the impact would be greater. The stipend size should be doubled or whatever is fiscally possible to reduce child poverty,” he said at the virtual event. 

World Bank Lead Economist and co-author of the report, Aline Coudouel, said: “The country has taken innovative programs, reflecting the life-cycle approach. As patterns of risk change in different phases of life, the life-cycle approach needs to encompass support from pregnant mothers to the elderly, persons with disabilities, as well as from households facing shocks to those in chronic poverty."

Dr Binayak Sen, director general of the Bangladesh Institute of Development Studies, said the pandemic year had taught a few lessons.

“We need to conceptually distinguish between the new poor, the old poor, and the transient poor. But we do not have an instrument to distinguish these categories,” he said. 

Dandan Chen, World Bank operations manager for Bangladesh and Bhutan, said: “The Covid-19 pandemic has accentuated the need for a more robust, efficient and adaptive social protection system. Going forward, well-targeted and less fragmented social protection programs that consider demographic change, unplanned urbanization, labor market vulnerability, and frequent shocks will help the country continue with its success of poverty reduction.”

In FY 2020, Bangladesh spent about 2.6% of GDP on social protection, which is in line with countries with similar income levels. 

However, some risk groups remain underserved. In particular, there are gaps in programming for early years and for the economic inclusion of poor and vulnerable youth and adults.