Targeted cash transfers to poor households could reduce Bangladesh’s poverty rate by 6.13 percentage points, according to the Center for Policy Dialogue (CPD), with the think tank arguing that current social safety net programs are plagued by inefficiencies such as errors in beneficiary selection.

During a dialogue in Dhaka yesterday, the CPD proposed providing Tk 4,500 per month to targeted households based on their income level.

The CPD says households could be identified using a poverty dashboard and intervention approaches could be tailored to poverty-prone, climate-vulnerable and high-poverty-prone areas.

The think tank says current social safety net programs, even though they cost billions in taxpayer money, are insufficient and ineffective in fighting poverty.

According to the National Household Income and Expenditure Survey (HIES) 2022, the poverty rate in Bangladesh was 18.7 percent, while the extreme poverty rate stood at 5.6 percent.

Despite more than 140 poverty reduction programs underway, the think tank said the beneficiary selection process lacks objective measures, meaning officials can exercise excessive discretion, ultimately leading to prejudice and nepotism.

“Furthermore, most of these programs are focused on rural areas, which is ineffective in reducing overall poverty,” said Towfiqul Islam Khan, senior researcher at CPD.

During his opening speech at the dialogue titled ‘Assessing the Viability of Universal Basic Income (UBI) in Bangladesh’ at the Lakeshore Hotel in Gulshan, Khan said the government should choose its approach based on the limited capacity of mobilization of the country’s revenue.

Professor Rehman Sobhan, Chairman of the CPD, Amir Khasru Mahmud Chowdhury, former Commerce Minister, and KAS Murshid, Head of the Sustainable Development Review Task Force of the Caretaker Government, also spoke at the event.

Targeted cash transfers could cost up to 1.35% of GDP

The CPD estimates that a national cash grant program could cost the government 1.35 percent of the country’s gross domestic product (GDP).

“The second approach, providing targeted cash grants to poverty-prone households, would cost about 0.84 percent of GDP. Programs for climate-vulnerable and highly poverty-prone areas would cost 0.67 percent of GDP, respectively. hundred and 0.27 percent of GDP,” Khan said. .

“The people of Bangladesh have the right to a minimum income as citizens. Although there may be challenges, it is the responsibility of the government and not the people,” said Debapriya Bhattacharya, distinguished member of the CPD who also moderated the event.

In his speech, Professor Rehman Sobhan said that Universal Basic Income (UBI) could be a serious policy option for Bangladesh.

He said the concept of UBI has been discussed globally since the 1980s, originating from an official at the International Labor Organization.

Sobhan appreciated CPD for producing a comprehensive paper, saying it went beyond academic debate and now offered the possibility of real-world impact.

“It is no longer an academic paper… it has the opportunity to be taken seriously,” Professor Sobhan said, calling for UBI to be included in the next national budget.

The renowned economist also warned of possible implementation problems, including the risk of UBI being used as a tool of political patronage.

“Every government in living memory has used cash transfer programs as an instrument of patronage,” he said.

The social safety net needs to be overhauled

Murshid, head of the task force, said Bangladesh had about 120 social protection programs.

“Bringing them together under one roof would improve their efficiency. This is an opportune time to consider this approach,” he said.

He elaborated on the inconsistency in the definition of poverty and the poor, saying that targeting errors, omissions and inclusions continues to hinder progress.

“We have not overcome these problems. In fact, our performance has deteriorated over the years.”

Furthermore, Murshid mentioned that social protection programs remain largely focused on rural areas despite the shift towards urbanization, with almost 40 percent of the population now residing in urban areas.

Given the current economic slowdown, Murshid stressed the importance of widening the safety net to include those who are just above the poverty line and at risk of falling into poverty.

It is important to identify vulnerable populations to avoid further deterioration, he added.

Former commerce minister Khasru said the mentality of the people of Bangladesh has undergone a significant change since the fall of the “autocratic regime”.

“The way people’s attitudes, expectations and values ​​have changed is consistent with today’s presentation,” he said, warning that political leaders who do not recognize this change have no business. ‘future.

He stressed the need for Bangladesh to become an egalitarian society, identifying overexploitation, wealth concentration and corruption as major problems that drain the economy and deprive people of their share.

Advocating good governance and effective delivery systems, especially at the local government level, Khasru spoke of the need for sustainable programs, noting that a basic income or salary alone is not a viable solution.

Professor Mustafizur Rahman, distinguished member of the CPD, called for public-private partnerships to address economic challenges, emphasizing the importance of viewing the issue from an anti-oppression perspective.

“Nothing is stronger than an idea whose time has come,” he said.

“Everyone should have a minimum income… it’s not about means testing,” he said.

Mostafa Kamal, deputy secretary of the Ministry of Social Protection, said social protection programs have not been as successful as expected due to planning flaws and weaknesses in their implementation.

“These issues need to be examined before launching new programs,” he added.

Rizwan Rahman, former president of the Dhaka Chamber of Commerce and Industry, said he heard of 300 people receiving incentive assistance from the same mobile number during the Covid-19 pandemic.

“This should not happen under new programs.”

He also suggested ensuring that social security benefits do not exceed the minimum wage. “Otherwise, the unemployment trend could increase.”

Imran Matin, executive director of the BRAC Institute of Governance and Development, said transparency and accountability are essential for the success of any government program and must be ensured.