Social safety net must help ‘new poor’

Against the backdrop of Covid-19, the importance of the social safety net programme cannot be over-emphasized.

Firstly, in addition to the existing challenges of the current social safety net programme in the 2020-21 budget, special allocations should be made for safeguarding the livelihoods of the "new poor" – people who have fallen into poverty due to the pandemic.

According to a recent estimate of the South Asian Network on Economic Modelling, due to Covid-19, the upper poverty rate of the country might have increased to as high as 40 percent – from around 20 percent in 2019.

In order to support the new poor – many of whom were working in the informal sector before Covid-19 – a self-claim system should be introduced and local and sector-based representatives' help can be sought to prepare a comprehensive list with the help of the National Identity Card (NID).

In addition to the upcoming budget, to help the new poor access the incentives packages of the government, credit should be secured with flexible terms and conditions – even without relevant documentation – at least for the next few months.

Secondly, it is high time the government effectively implement the National Social Security Strategy (NSSS), which has proposed a comprehensive life-cycle based safety net approach and has re-designed the existing safety net programme through five to six core strategies. Rapid implementation of the NSSS would help the government target those who are in real need.

Thirdly, there is lack of initiatives within the safety net schemes targeted towards the urban poor – especially those living in urban slums. There should be specific programmes targeted towards slum dwellers, the homeless population and street children.

With the help of information from the Bangladesh Bureau of Statistics, different NGOs and government representatives, a comprehensive digitised list can be prepared. Government rationing in different areas can be effective in combating hunger but that has to be complemented with a digital listing of the dwellers.

Fourthly, the success of the safety net programme lies primarily in targeting, and thereby reaching, the real beneficiaries in need. To this end, digitisation of the beneficiary list on the basis of the NID is essential. It is also important that the government's programme, through which a beneficiary can be directly linked to the transfer system, is extended to all existing programmes using the NID.

Fifthly, the core objective of a social security programme should not be temporary support – in terms of allowances to the vulnerable population – but to make the beneficiaries self-reliant. Therefore, from the existing support-based programmes, the safety net scheme should be gradually shifted towards employment-generation through small-scale credit and training schemes.

Finally, in terms of total allocations, in the 2019-20 budget, the safety net programme constituted around 2.56 percent of GDP with the bulk of this allocation dedicated to the government's pension and school stipend programme. Given the dire need to maintain the livelihoods of millions of poor – including the new poor – in the upcoming budget a significant shift should be made towards increasing the allocation to around five percent of GDP.

Even when this pandemic is over, given the overall requirement of the country, maintaining a safety net-GDP ratio of around five percent is required. In addition to allocations, bringing transparency to the system through effective digitisation and introducing a monitoring and evaluation mechanism to the budgetary framework can bring about greater transparency.

Dr Sayema Haque Bidisha, Professor of Economics, University of Dhaka