UBI promising poverty-reduction tool: CPD

The Centre for Policy Dialogue (CPD) has proposed universal basic income (UBI) for Bangladesh as a promising tool to reduce poverty, empower citizens, and streamline social protection even within the constraints of the current fiscal framework.
The local think tank made the proposal at a seminar titled "Assessing the Viability of Universal Basic Income in Bangladesh: Target Population, Fiscal Requirements, and Institutional Challenges" in a city hotel on Sunday.
The proposal said the UBI would include a periodic, unconditional, and uniform cash payment system, offering financial security to all members of society.
Referring to several UBI schemes worldwide, the CPD said a partial one would be ideal for Bangladesh at the moment and could be more effective than the current social safety net programmes in alleviating poverty.
To ensure its effective implementation, the CPD recommended introducing a poverty scorecard as a reliable and cost-effective tool to assess poverty levels and identify target groups.
"The threshold of the scorecard will indicate households' susceptibility to poverty. Those scoring below the threshold are more vulnerable to poverty, while those above are not," said Towfiqul Islam Khan, a senior research fellow at the CPD, in his presentation.
He said the threshold would be determined by analysing various values in both urban and rural areas, aligning them to represent households that fall below the upper poverty line as defined by the Household Income and Expenditure Survey (HIES) 2022.
According to the CPD proposal, households in urban areas with a score below 48, and in rural areas below 52, would be eligible to receive allowances.
Speaking at the event, CPD Chairman Professor Rehman Sobhan said UBI had been discussed since the 1980s and it had taken 40 years to put the topic on the table in Bangladesh.
Describing the present time as unique, he said the head of the interim government, Dr Muhammad Yunus, had practically struggled his entire life to alleviate poverty.
"It is going to be Yunus among any leader, not just in Bangladesh but anywhere in the world, who would take a policy proposal on poverty seriously," he said.
The noted economist said it was not an academic paper just for discussion but was a serious policy proposition to be taken up for implementation.
The CPD chairman said the programme could be very innovative for poverty alleviation in Bangladesh. He urged the finance adviser to consider including this in the next budget.
BNP's National Standing Committee Member Amir Khasru Mahmud Chowdhury said any politician or party unable to uphold the new aspirations of the people following the July-August uprising would not sustain in politics.
He said the proposed UBI scheme matched people's aspirations, adding such a programme would help Bangladesh go ahead to become a welfare state.
Khasru said the BNP had planned to take universal healthcare as well as subsidised education at a higher level, which would make people spend more on welfare.
The senior politician termed the UBI a good programme, saying this could be taken up in coordination with other welfare schemes, including his party's proposed healthcare facilities. He said the BNP would examine the proposal and hold serious discussions.
Chairing the event, CPD's Distinguished Fellow Dr Debapriya Bhattacharya said Bangladesh now stood at a critical juncture, balancing democracy and development.
"In this pivotal moment, it is essential to articulate our aspirations and ambitions for the future," he said.
Debapriya, also the convenor of the Citizen's Platform for SDGs, Bangladesh, said he saw the programme as a rights-based approach where every citizen would have the right to have a minimum income.
He emphasised the vision of building a society where development would be inclusive as well as guaranteed for all and would include ensuring basic protection for the people and providing them with the minimum means of subsistence.
Such assurances, he noted, aligned with the promises enshrined in the constitution, which committed to ensuring social, economic, and human security for every citizen.
CPD's Distinguished Fellow Prof Mustafizur Rahman said now was the time to implement such programmes in Bangladesh where a government was in power as a consequence of an anti-discrimination movement.
Such a welfare programme was required if Bangladesh aspired to be a welfare state, said Mustafizur, also a core group member of Citizen's Platform for SDGs, Bangladesh.
Former Dhaka Chamber of Commerce and Industry (DCCI) president Rizwan Rahman said the tax-to-GDP ratio was typically between 20 and 25 per cent, or at least above 10 per cent, in countries implementing UBI.
In contrast, Bangladesh had only managed to increase its tax-to-GDP ratio by 1.2 percentage points over the past 17 years, reflecting a slow growth in this critical metric, he noted.
"This shows our growth in terms of numbers is quite low, and admittedly, we have also been misled by certain figures," he remarked.
Despite the availability of various models, Rizwan questioned the feasibility of implementing UBI in Bangladesh in light of the current tax-to-GDP ratio. He warned of potential resistance from some quarters, as the initiative would require replacing the existing transfer programmes.
While acknowledging the need to ensure the current social protection schemes' efficiency, he expressed doubts about the government's readiness to roll out a UBI programme in the current volatile economic and political climate.
He said any implementation should adopt a public-private partnership (PPP) model for better effectiveness. He also proposed the interim government initiate a pilot UBI project, saying a full-scale programme should be executed by an elected government.
The business leader emphasised that corruption, which he described as a pervasive virus, remained a significant challenge. However, he expressed optimism, stating that eliminating corruption would make implementing UBI feasible. Additionally, he stressed digitisation would be instrumental in ensuring transparency and efficiency in such programmes.
Chair of the taskforce on re-strategising the economy and mobilising resources for equitable and sustainable development Dr KAS Murshid said UBI was apparently attractive and matched the aspirations of the existing socio-political environment.
He said the interim government was now taking up programmes that were like the low-hanging fruit and actionable in a short period. He further said he did not favour scraping the previous welfare programme-related income transfers.
Central Coordinator of Ganosamhati Andolon Zonayed Saki said, "While only 2.4 million people pay taxes, over 10 million hold credit cards. This highlights a significant disparity, indicating a substantial segment of the population is not contributing to the tax system."
Aneeka Rahman, senior social protection economist at the World Bank; Iole Valentina Lucchese, attaché - programme manager of social protection of the European Union delegation to Bangladesh; and Nargis Khanam, additional secretary to the Ministry of Social Welfare; spoke as distinguished discussants.

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