The failure to deliver stimulus aid to the poor

It has been more than two months, yet Zahida Pervin - the Jashore branch chairperson of Bangladesh Boutique House Owners' Association – has seen no sign of the stimulus package meant for small and middle enterprises.

With no work order, Zahida's "Nakshi Handicraft" workers – all marginalised women – have slipped into extreme poverty.

"Before the pandemic, novice workers could earn Tk5,000 per month. Now, they cannot even earn the minimum amount needed to survive."

According to a BIDS study, Bangladesh would see 1.64 crore new poor this year as a result of the shutdowns.  

To counter the impact of shutdown, the government on April 5 had announced a host of stimulus-cash-food support packages for the pandemic victims. Tk20,000 crore has been apportioned for small and medium enterprises like Nakshi Handicraft,

Tk3,000 crore for low-income professionals losing employment while fifty lakh destitute families were meant to receive Tk2,500 each.

The extreme poor were supposed to be brought under the "Rice for Tk10 per kg" food support programme.

And yet much of this aid, both in cash and in kind, appears to have slipped through the cracks as the government lacked the right mechanisms to deliver the support packages to the rightful beneficiaries.

There have been numerous reports of both failure to compile proper lists of beneficiaries as well as instances of brazen corruption.

In one instance, 200 names in a list compiled for the distribution of money under the '50 lakh ultra-poor through mobile financial service' used the same phone number.

Meanwhile, till June 17, the Local Government Division suspended 100 public representatives – 30 Upazila Parishad (UP) chairmen, one UP vice-chairman, 64 UP members, one Zila Parishad member and four municipality councillors –for alleged irregularities in cash assistance and relief distribution.

Given the situation, economists have questioned why the government failed to use the National Identity Card Database to better distribute the stimulus. Some others have also demanded a reintroduction of the public rationing system that have been dismantled throughout the years.

They point out that if these mechanisms were in place, the government could have avoided the economic fallouts of the shutdown to a degree, and may be continued it for a longer period to avoid the public health disaster we are currently experiencing.

The scourge of corruption

During a webinar on June 24, Research Director of Bangladesh Institute of Development Studies (BIDS), Binayak Sen said that even increasing the funds under the stimulus package would not help the poor and needy because there are too many leakages in the distribution system.

"We have found 'comfortable non-poor' in the list of social safety net beneficiaries, which should not have happened," he said.

Although the safety net programmes are largely designed for the poorest, BIDS's incidence analysis shows that even when it comes to social protection, the extreme poor group constitutes a minority.

Binayak further said, "For rural areas, extreme poor's share in total beneficiaries of allowance programme is 26 percent, 24 percent in food assistance programme and nine percent in stipend scheme."

Post and Telecommunications Minister Mustafa Jabbar agreed there were indeed numerous flaws in enrolment.

Many people provide multiple mobile numbers as well as fake National Identity (NID) card numbers.

"We did not get accurate information. Later, the final list was made after NID verification, but there was scope to do this at the initial stage," Mustafa regretted.

The PM-declared cash assistance was distributed through Bangladesh Post Office's digital financial service Nagad.

In disaster-response, enrolment of vulnerable groups is mostly done by local administrative officials and political party nominated public representatives.

For pandemic victims, the disaster management and relief ministry distributed 2.01 lakh tonne of rice, Tk91.13 crore hand cash and Tk25.54 crore cash for baby food across 64 districts till June 4.

Till June 10, law enforcement agencies recovered 459.87 tonne of rice meant for the poor from rice thieves, Transparency International Bangladesh (TIB) recently cited in a press release.

According to another recently published report by TIB, in 82 per cent of surveyed areas, there are allegations of partisan bias in preparation of the beneficiaries' list. Meanwhile, in around 42 percent of the areas, the distribution process did not follow any list.

Bangladesh Khetmojur Samity's (a peasant organisation) local unit General Secretary Mehedi Hasan said, "Beneficiaries' enrolment depends on the ruling party men's consideration. Even though some ultra-poor had submitted photocopies of NID to local public-representatives, duplication of NIDs deprived them from the benefits."

Do NIDs help flawless enrolment of beneficiaries?

Retired Brigadier General M Sakhawat Hossain served as an election commissioner when the caretaker government launched distribution of biometric NID in 2007.

He suspects corruption behind faulty enrolment. He said that such corruption can be checked by NID verification.

"Due to mismanagement, Bangladesh – the only country in South Asia having an effective identification tool – cannot yield the benefits of NID."

In 2013, a senior officer at the World Bank's Nepal office, Rajib Upadhya, wrote about his experience in Pakistan in a WB blog, where he discussed how national identity cards can add value to development.

In his write-up, Rajib mentioned that Pakistan's National Database and Registration Authority rolled out prepaid relief cards to 20 million victims of the devastating 2010 flood within three days.

In neighbouring India, there is Unique Identification Authority that provides Aadhaar card for ration.

The United States' Social Security Number (SSN) based solution is well-known for proper management of social safety net programmes.

KAM Morshed, a senior director at Brac, said that in the US, almost all documentation and distribution of social safety benefits are done in a "systematic way".

Whereas, he said, Aadhar card is a disaster.

He said that due to improper documentation, the Aadhar card has chocked India's informal sector while distressing the beneficiaries more.

"Our NIDs lack family identifier. Hence, tracing a poor member of a joint family is tough. I would rather suggest for completion of the National Population Registry (NPR)," Morshed added.  

In 2011, Bangladesh Bureau of Statistics launched a pilot project of the World Bank funded NPR. However, the programme stopped halfway.

Director General of the National Identity Registration Wing (NIRW), Brigadier General Mohammad Saidul Islam believed that NID should be the best possible solution to verify any individual in Bangladesh.

According to him, currently 11 crore Bangladeshi citizens have NID. The NIRW has capacity to verify 55-60 lakh individuals per day.

Its central databank gets updated regularly.

He said that the NID databank is Bangladesh's asset; it does not only belong to National Election Commission.

Any agency operating social safety net programmes or disaster management can avail the NIRW's service.

"If a list of beneficiaries is prepared on the basis of NID, actual receivers will be identified. And actual poor people will get a fair share," Saidul concluded.

BIDS Research Director Binayak, however, has recommended expansion of the NID coverage.

"If a person's NID has information about which social programme covers the card holder, his or her bank assessment, occupation and other details, it will help minimise leakages and duplication," he said.

Demand for public rationing

Large-scale rationing under the Public Food Distribution System (PFDS) had existed in this geographical area since 1940s.

After the emergence of Bangladesh, its commodity markets went beyond the reach of the war-ravaged consumers.

The then government introduced the large employee rationing system. The subsidised food support covered government employees, teachers, law enforcement personnel, postal and railway staff, as well as industry workers.

"A ration-card holder was entitled to buy five essential foods like rice or wheat 35kg in a month at only Tk15 rate. There were government-approved dealers at grassroots to sell the ration at subsidised price. The rationing system was a great relief for the low-income people," recalled veteran workers organiser Shahidullah Chowdhury.

Although the focus was to protect the domestic grain market during famine, rationing was a crucial subsidy for the middle-class and ultra-poor households till the end of the 1980s.

Following reformation of the PFDS, food assistance in the name of Food for Work, Vulnerable Group Feeding, Test Relief or Open Market Sales have been introduced, replacing the public rationing system.

However, the demand for reintroducing the rationing system, at least for the ultra-poor, natural disaster victims and workers, is still there.

"The paddy farmers can hardly sell their harvest at a satisfactory profit. In markets, hoarders make rice expensive for consumers, particularly for the poor ones. We have been demanding the rationing system for poor farmers. In the post-shutdown period, our demand seems more pressing," said vice-president of Bangladesh Krishak Samity (a farmers' organisation) Nimai Ganguly.

Although the pandemic has affected the economy, food grain stocks in Bangladesh remains in a good position.

But given the irregularities in distribution system, there is high chance that a significant portion of pandemic victims, including lower-middle and lower income groups, would not reap much benefit much from the stocks.

The government's failure to control commodity price hike is an indication that this is happening.

Economics Professor Anu Muhammad said that launching of a public food rationing system is a timely demand when almost all economic sectors have been ravaged by the pandemic.

"Unemployment as well as loss of income source will increase. It is the government's responsibility to provide food to citizens during a crisis. The public rationing system will also help to get rid of faulty enrolment process," he opined.