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Balancing social protection to cut poverty to 12pc: WB

  • Staff Correspondent
  • 17 September, 2021 12:00 AM
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Balancing social protection to cut poverty to 12pc: WB

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Bangladesh needs to strike a balance between rural and urban social protection allocations, the World Bank (BB) suggests as its new study finds that the allocations are largely focused in rural areas.

About 11 per cent of urban people are covered by social protection whereas 19 per cent of the urban population is poor, says a WB report on ‘Bangladesh Social Protection Public Expenditure Review’ unveiled on Thursday. 

On the other hand, the coverage in rural areas is higher than the poverty rate, with programmes reaching 36 per cent of people against the 26 per cent rural poverty rate.

Almost 1 in 5 urban people live in poverty, and half of the urban households are at the risk of falling into poverty, according to WB.

By improved 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, the report said.

“Over the last decades, Bangladesh has expanded its coverage of social protection programmes 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 programmes that consider the demographic change, unplanned urbanization, labour market vulnerability, and frequent shocks will help the country continue with its success of poverty reduction,” he added.

The report 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. Using a social registry, such as the National Household Database can improve targeting of both programs and households at a reduced cost, it suggested.

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 programming 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 programmes, 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," she added.

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 the 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 programmes at the local level.