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The Financial Express

Reallocation of transfer to the poorest can bring down Bangladesh’s poverty to 12pc: WB report

| Updated: September 20, 2021 11:21:51


Reallocation of transfer to the poorest can bring down Bangladesh’s poverty to 12pc: WB report

Social Protection Programmes remain central to Bangladesh’s sustainable development policy and are progressively benefitting the poorer households, says the World Bank.

It adds that by improving the targeting of the social protection programmes, the country can further reduce poverty.

Reallocating existing transfers to the poorest could reduce poverty from 36 per cent to 12 per cent, says a new WB report launched on Thursday.

The report titled ‘Bangladesh Social Protection Public Expenditure Review’ reflects on Bangladesh’s continued investment towards social protection and how it can improve on its existing framework including planning, designing, programming, and delivery of the various social protection programs and projects.

The report finds that the social protection programmes are mostly focused on rural areas. But, with almost 1 in 5 of the urban population living in poverty, and half of the households at the risk of falling into poverty, there is a need for rebalancing geographic allocations between rural and urban areas.

About 11 per cent of people in urban areas are covered by social protection whereas 19 per cent of urban population is poor. The coverage in rural areas is higher than the poverty rate, with programmes reaching 36 per cent of people, while 26 per cent live in poverty. Using a social registry, such as the National Household Database can improve targeting of both programs and households at a reduced cost. 

“Over the last decades, Bangladesh has expanded its coverage of social protection programs that now reach three in every 10 households in the country,” said Dandan Chen, World Bank Operations Manager for Bangladesh and Bhutan.

“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 the demographic change, unplanned urbanization, labor market vulnerability, and frequent shocks will help the country continue with its success of poverty reduction.”

In FY 20, Bangladesh spent about 2.6 per cent 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 programing for early years and for the economic inclusion of poor and vulnerable youth and adults. For example, in every eight poor persons, one is a young child. Yet, the poor young children receive only 1.6 per cent of social protection expenditures. Spending will be more effective if the allocations are aligned with the share of the poor in different categories, and with the different functions played by programmes.

“Investing in early childhood helps a child grow healthier and be more productive in adult life and thus break the cycle of poverty across generations,” said Aline Coudouel, World Bank Lead Economist and a co-author of the report. “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 old age, persons with disabilities, as well as from households facing shocks to those in chronic poverty."

To boost the quality and efficiency of service delivery, Government to Person (G2P) and mobile financial services should be scaled up. It takes about two months to transfer the funds from treasury to the beneficiary. The G2P scheme can cut processing time to 10 days.

This also needs to be paired with increased allocations for staffing, capacity-building training including digital literacy, and improved equipment, which will facilitate enhanced implementation of programs at the local level.

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