The Financial Express

Addressing the core problems of SSN schemes

| Updated: July 29, 2021 20:44:56

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We are going through an unprecedented emergency in the form of this pandemic. Everything is very uncertain and we do not know what will unfold next. When we are thinking about social safety nets, the relevance of conventional thinking needs to be re-examined in the context of Covid-19. Now the situation is similar to a war where nobody is safe. Everyone is in need of some sort of assistance be it healthcare or something else. But we do not have the resources, the infrastructure or the institutions to respond adequately. We may want many things but we cannot deliver on all. We need a realistic assessment of what we can do and achieve.

Let us remind ourselves why the term social safety net was introduced. Many poor people were bypassed the post-liberalisation growth in the 1990s. The social safety net (SSN) was introduced to improve the lives of vulnerable, left-out families and individuals who did not benefit from growth. Conditions have now changed as almost no-one is being left behind by Covid! In an emergency situation, you deal with the emergency first, and here we have to help the ones in greatest distress. Thus, setting priority is crucial.

What we certainly need now is collective action and not just simply paying lip-service exonerating people to work together. The culture of public exoneration is really quite pathetic and often seems just a mechanism to blame the victims rather than those whose job it is to lead and deliver. There should be initiatives from politicians, civil society, non-government organisations, and grassroots institutions. For this to happen, a connection needs to be built up with the grassroots level institutions. It is very unfortunate that this connection which at one time we had come to take for granted has now seems to have all but disappeared. We now need to re-invent this wheel perhaps with the help of technology and IT. We should remember that without grassroots-level accountability, we cannot deliver anything effectively.

We have hundreds of social safety net programmes run by various organisations which are scattered all over the country. One would have expected that by now all these should have been brought under one roof for greater effectiveness and cost-efficiency. This has not happened -- in fact, no major organisational reforms appear to have taken place in this area in some time.  Although many things like political economy and internal organisational dynamics work behind this and it might not be feasible in our current context, delaying the inevitable is costing the nation dearly.

Moreover, the necessity of such a large number of social safety programmes also needs to be assessed. We have seen hundreds of programmes not being efficiently administered. If that is the case, why do we not focus on reducing the numbers, improving efficiency and targeting and managing the thing much better than we have done in the past? That can be one way to look at it. The other way would be increasing the number of beneficiaries as there are always groups who are left behind.

Although the demand is infinite, the ability to supply is extremely constrained. So, there is a trade-off between keeping on expanding the inefficiencies and wastages and actually reducing the size of the programmes, focusing on the highest priority groups and sub-groups and delivering up to a basic minimum standard.

Economists have time and again talked about creating a poverty database. Most countries in the world have a poverty database which they update after every 2-3 years. If we talk about Cambodia, they have a database and it has been legally declared that no other organisation other than the government can create the database. So, if anyone has to work with poverty, they need to follow this. If this can be implemented in Bangladesh, the anarchy regarding the facts and figures of poverty could be overcome. With the anarchy of data which varies from year to year, organisation to organisation, we cannot have policies. Moreover, the flow of information has been reduced in the pandemic situation. The accuracy of many predictions has eroded as we have less access to field data now. Under these circumstances, the quality of information that we have today is extremely poor.

We should also focus on the macro and microeconomic conditions of the country. The macroeconomic condition of the country remains strong. But the microeconomic condition is very poor. We have to find ways to bridge the gap between the micro economy and the macro economy.

Another growing area of concern revolves around Small and Medium Enterprises (SMEs). Providing assistance for economic recovery is another important side of social safety nets in addition to the traditional grants of cash or food. The SMEs do not have access to the stimulus packages or other benefits. And the rate of unemployment is the highest in the case of SMEs. But there is no specific, meaningful programme for this target group. We need to support this sector to create employment.

Our rural economy has played a stellar role so far. We have once again realised the traditional role of the rural economy. Our rural economy has always been a shock absorber. As a result, we have always seen people migrating from the cities to their villages when there is a shock in the economy. There is social capital, some cushions, shock absorbers or grants in the rural economy to support these people. So, the rural economy should be refocused once again, particularly in the context of the pandemic. About 80 per cent of rural income comes from the non-farm sector -- unfortunately, however, we do not know how this sector is faring under the pandemic. There are extremely important knowledge gaps here.

This pandemic is an unending battle. Even advanced countries are struggling to handle the situation. We have to divide our constraints into two parts. Our critical binding-constraint is not finance, it is our ability to implement programmes efficiently. This is not just the case for social safety nets, it is applicable for all public sector activities. Perhaps, it is also applicable to the private sector. We have to loosen up this constraints. Especially at this time of the crisis, we can perhaps generate some social pressure to fix this problem that has haunted us for years. The final political thrust that is needed will have to come from inside the party, led perhaps by the traditional wings within the different branches of the ruling party. Can we dare hope for reformist pressures to emerge from within? I personally would tend to say, 'yes'.

Dr KAS Murshid is former Director General of BIDS. [email protected]

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