1 in 5 of urban population living in poverty: World Bank report
Social protection programmes remain central to Bangladesh's sustainable development policy and are progressively benefitting the poorer households, says a World Bank report launched today.
The report, titled "Bangladesh Social Protection Public Expenditure Review", 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 programmes and projects.
World Bank's report also states that improving the targeting of the social protection programmes and reallocating existing transfers to the poorest can reduce poverty from 36 percent to 12 percent.
The report finds that the social protection programmes are mostly focused on rural areas. However, almost 1 in 5 of the urban population are living in poverty. With half of the households at risk, there is a need for rebalancing geographic allocations between rural and urban areas. About 11 percent of people in urban areas are covered by social protection whereas 19 percent of the urban population is poor. The coverage in rural areas is higher than the poverty rate, with programmes reaching 36 percent of people, while 26 percent live in poverty. Using a social registry, such as the National Household Database can improve targeting of both programmes and households at a reduced cost.
"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 urbanisation, labour market vulnerability, and frequent shocks will help the country continue with its success of poverty reduction."
In FY20, Bangladesh spent about 2.6 percent of its 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 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 children receive only 1.6 percent 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, noted the World Bank report.
"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."
To boost the quality and efficiency of service delivery, government to person (G2P) and mobile financial services should be scaled up, the report recommends. 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.