FE Report
Experts at a conference stressed the need Sunday for introducing more employment-based safety net programmes and health insurance under social protection system as these directly benefit the targeted poor in rural Bangladesh.
They also observed that education-based programmes should not form part of social protection as it belongs to development or poverty alleviation discourse, not social protection.
Moreover, its benefit is too small to bring any change in the lives of the poor and due to distributional fault, it is mostly enjoyed by the better-off section of the population.
Their observations came on the second day of the first Bangladesh Economists' Forum (BEF) conference on 'poverty reduction strategy and policy' at a city hotel. Bangladesh Institute of Development Studies (BIDS) director general Mustafa K Mujeri and University of Ulster professor SR Osmani presented two papers in the session.
Based on a national level survey on impact of social safety net programmes on beneficiaries conducted in the rural areas in 2010, Prof SR Osmani said it was found that participation in the safety net seemed to have increased the probability of being poor.
"Impact of safety net on poverty reduction, coping with crisis and asset transition is negligible at best and non-existent at worst," said Mr Osmani. He attributed the non-performance of safety net in the lives of the poor to two reasons: aggregate amount of benefit is pitifully small and even the small benefit that it gives is captured mainly by the better-off households (HH).
Citing the survey, he said 23 per cent of the population gets 63 per cent funds while 53 per cent extreme poor, 45 per cent moderate poor, nearly 43 per cent marginally non-poor and 29 per cent well-off have access to safety net. Only 3.0 per cent beneficiary households are benefited from transfer programmes in terms of contribution of safety net to household consumption while the share is less than one per cent in all rural households.
Analysis of distribution of benefit of safety net programmes by poverty groups showed only 24.5 per cent extreme poor beneficiary households get 25.6 per cent share of the total funds while 15.1 per cent moderate poor get 14.8 per cent funds, marginally non-poor 16.6 per cent funds and about 46 per cent well-off about 43 per cent of the funds.
Mr Osmani said education-based programmes, the second largest in terms of funds, are distributionally most unfavourable to the poor. By contrast, employment-based programmes, the smallest type in terms of funds, is distributionally favourable to the poor.
He said current coverage of just 2.6 per cent of households in terms of employment-based programmes is a sheer absurdity in a rural economy with pervasive underemployment. Virtual absence of protection policy contrasts sharply with the fact that health-related shocks are the most pervasive type of shocks in rural Bangladesh.
In his paper titled 'Vision 2030: what lies ahead for Bangladesh in a post MDG world?', Mustafa K Mujeri said the country's growth scenario in the Perspective Plan indicates that GDP growth will rise to 8.0 per cent in 2015 and 10 per cent in 2021. Capital will act as a major stimulus to growth for which the gross investment will rise to about 38 per cent of GDP in 2021 from a level of 24.4 per cent in 2010.
He identified three critical areas to be managed in the process of transformational changes, namely, quality of governance, demographic transition and urbanisation and spatial transformation.
He said global development cooperation that attracts aid from diverse sources, emphasises domestic resource mobilisation, and capitalises on potentials of private sector which is critical for Bangladesh in the post MDG world. So are good policies, capacity to implement them and credible institutions.
On remarks of a discussant, World Bank Bangladesh lead economist Salman Zaidi said Bangladesh needs to take advantage of moving jobs out of China as an immediate short-term step. For that, he suggested to localise economic zones, decentralisation and land management.
Regarding social protection, he said there are challenges of financing, faulty selection process and leakage in the present social protection system. People who set them should be aware of these challenges and must understand the target goal through these programmes.
He added that there should be a system approach rather than individual programmes. Rationalisation and priority action of programmes are necessary and that job creation through social protection would be most effective.
