The Financial Express

Safety nets bypass 'missing middle'

Economists call for unemployment benefits

| Updated: July 31, 2020 11:57:42

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Speakers at a webinar stressed the need for reforming existing social protection programmes to reach the "missing middle" and vulnerable people after the Covid-19 pandemic that pushed millions back into poverty.

They said the conventional poverty measures and identification methods have failed to spot vulnerable ones during the pandemic.

For example, the speakers said, such programmes excluded the middle class, who became financially frail after the pandemic pummelled the country.

The worries came at the discussion on"Covid-19 and Social Protection Programmes in Bangladesh" held on Wednesday.

In his introductory remarks, SANEM executive director Dr. Selim Raihan said the conventional measures have failed to identify the poor.

"So, there might be many people left out of the poverty reduction programme," he said.

Around 60 per cent of emerging middle-income group of people has no access to social insurance and pensions, said Dr Bazlul Haque Khondker, chairman of South Asian Network on Economic Modelling or Sanem.

He said they are not getting any support from the government-announced 19 stimulus packages amounting to over Tk 1.0 trillion.

In his keynote presentation, Dr. Khondker said despite strong performance in macroeconomic indices, the inequality has been on the rise even during the pre-Covid period.

He cited the higher exclusion error-70 per cent, which denotes the proportion of actual poor was wrongly classified as "non-poor."

He said while only 2.0 per cent of the social protection budget is allocated for the children aged 0-5, who constitutes 9.0 per cent of the population, but 72 per cent of such allocations are targeted towards the elderly, who make up only 8.0 per cent of the population.

He said that under normal circumstances, almost 60 per cent of the population is excluded from the social protection coverage.

To alleviate the social protection scenario in Bangladesh, Dr. Khondker recommended preparing a robust database using many digital identities, including NID.

In her address, a senior research fellow at the World Bank Aneeka Rahman stressed strengthening the health system and resilient recovery.

She suggested financing needs to be more flexible. She recommended identifying projects, which can be reprioritised while channeling the funds into areas of pressing needs.

Mr Rahman noted that while transfers are being made to accounts of the beneficiaries, the beneficiaries are often not being able to access those funds due to the location of the banking facilities, for which they need to travel increasing the risk of infections.

Sayema Haque Bidisha, research director at Sanem, put emphasis on reintegrating returned migrant workers into the local economy.

She also expressed her concern about the low numbers of social protection programmes, only 6-7 out of 140-145 programmes target the urban slums.

Out of pocket expenditure for health in Bangladesh is one of the highest in the world, said Dr. Bidisha, calling for proper guidelines and measures to ensure the accountability for private health care.

She proposed instituting an unemployment benefits programme at least for a few months and an unemployment registry for that purpose.

Additional Secretary to the finance division Azizul Alam discussed the targeting problem and noted that many programmes do not differentiate between the poor and non-poor, such as the school stipend programme.

He expressed the hope that the situation would improve once the National Household Database is complete.

In the speech as the special guest, Unicef representative in Bangladesh, Tommo Hozumi said the current pandemic has given countries an opportunity to reflect on the development path.

Discussing the issue of exclusion, he said, such an error is not an exception, rather part of a global norm.

Mr. Hozumi stressed the importance on introducing a universal child grant, citing the examples of France and Japan.

For full utilisation of Bangladesh's demographic dividend, investing in the children is essential and for which universal grant is important.



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