Inclusive economic policy must for poverty reduction

Published: 00:00, Apr 06,2021

 
 

INCONSISTENCY and mismanagement in poverty reduction initiatives and a discriminatory economic policy appear to have frustrated poverty reduction rate in Bangladesh. While the government has taken many praiseworthy plans and programmes to reduce the poverty rate, which has drastically increased since the onset of COVID-19 outbreak in the country, it has failed to properly implement the plans and programmes, leaving cracks in the system. The poverty reduction rate dropped to 1.2 percentage points in 2010–2016 from 1.7 percentage points in the 2000s. Although an increase in the gross domestic product over the years helped, as economists say, to reduce the poverty rate from about 80 per cent in 1970 to slightly over 20 per cent in 2019; but the rate jumped, keeping to a number of studies, to about 45 per cent at the end of 2020. Such an abrupt rise in the poverty rate suggests a lack of cohesive and sustainable poverty reduction programmes. Social safety net, which includes a number of specific poverty reduction programmes such as old-age allowance, allowances for the widow, deserted and destitute women, allowances for the financially insolvent disabled and others, is worryingly inadequate as they cover less than one-third of the poor.

What is also worrying is that the social safety net programmes are mired in mismanagement and are characterised by high targeting errors — inclusion of wrong people and exclusion of the deserved ones. About 28.7 per cent of the population are reported to be benefiting from the social safety net while around 46.5 per cent of the beneficiaries should not have been included in the programmes, keeping to a review of the National Social Security Strategy by the General Economics Division. About 66 per cent of social safety net beneficiaries are, according to a Centre for Policy Dialogue report, is not poor. A World Bank report in 2016 also said that about 60 per cent of social safety net programme beneficiaries did not qualify as being vulnerable and observed that a large portion of the poor and the vulnerable remained outside the programmes. Both studies mentioned that nepotism, corruption and political bias in enlisting the beneficiaries had weakened the social safety net plans that intended to help the poor and other vulnerable groups. Local representative, mostly responsible for the enlistment and selection of the beneficiaries, are reported to indulge in corruption during selection and enlistment. Allegations are also there that many potential beneficiaries need to bribe local government representatives to get their names enlisted.

The government must, therefor, update the database for a more effective implementation of the social safety net programmes and reach the benefits to the deserving poor. The Bangladesh Bureau of Statistics, which was appointed to work on the database in 2015, must complete the database soon. The government must also mend its economic policy that has allowed a K-shaped growth, allowing wealth to be concentrated in the hands of a few while pushing millions under the poverty threshold. The government must also reduce the gap in poverty reduction rates between eastern and western divisions that has reportedly re-emerged since 2010.

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