The Financial Express

Streamlining social security

Streamlining social security

The social security schemes introduced by Bangladesh government at different times for aiding the marginalised segments of the population including the aged, the destitute and the disabled have earned the praise of many quarters. But as in other programmes of the government, irregularities in enlistment could not be avoided in these as well. In many instances, the deserving people were omitted and those who were not qualified could manage their inclusion in the lists. According to the mid-term implementation review of the National Social Security Strategy (NSSS) released in mid-2020, the ineligible recipients accounted for an astonishing 46 per cent of the total. The figure only demonstrated the laxity and corrupt tendencies of local level administration in discharging their duties.

The general economics division of the planning commission formulated the NSSS back in 2015 with the objective of making the government's social protection programmes more effective. The mid-term review showed that maximum anomalies had been committed in the listings for old-age allowance, which is now distributed at the rate of Tk 500 per month. But the government report mentioned those as 'errors' instead of branding them as 'irregularities'. There were errors with regard to age in 58.6 per cent cases, and the errors in respect of income were 14 per cent. The monthly income of those getting allowance should have been less than Tk 10 thousand. But it was found that a huge number of ineligible people with higher incomes were receiving it.       

Bangladesh can boast of a long history of innovations and experimentations in the area of social safety net programmes. As a continuation of this, the NSSS was adopted in 2015 with the goal of reorienting the social security system for addressing the lifecycle risks of the poor, the vulnerable and socially excluded segments of population. It emphasised on strengthening programmes in terms of quality and coverage, and making the entire system more inclusive.

The budgetary allocations for social security programmes (SSPs) have been gradually raised reaching Tk 955.74 billion during 2020-21, which is 16.83 per cent of the total budget and 3.01 per cent of GDP. However, if civil pension is excluded from computation, then the amount would be about 1.6 per cent of the GDP. The social security system (SSS) consists of around 115 programmes administered by over 30 ministries or divisions. But 20 major programmes account for 78 per cent of the SSP budget, while the combined share of the smallest 50 programmes is only 2 per cent of the total. The 2016 Household Income and Expenditure Survey (HIES-2016) indicated that 28.7 per cent of the population were covered by at least one of the SSPs.

As mentioned earlier, the SSPs have been traditionally characterised by high targeting errors with regard to beneficiary selection. By considering the poor and vulnerable as the target population, the 'exclusion error' (eligible households not getting SSP benefits) was estimated to be an astonishing 71 per cent by the HIES-2016. On the other hand, the 'inclusion error' (households that should not have been included) was found to be a staggering 46.5 per cent among the recipients.

Experts opine that high inclusion error is a major factor responsible for the low impact of SSPs on the country's poverty situation. Simulations have shown that headcount poverty rate could be decreased by about 7 per cent if this error could be eliminated, implying that an additional 10.7 million people belonging to 2.6 million households could be lifted above the poverty line. On the other hand, if the households languishing below the lower poverty line were targeted, then extreme poverty could fall by 5.9 per cent, implying that 9.5 million people from 2.4 million households could graduate from extreme poverty. 

The mid-term review found that the implementation quality of tasks specified in the NSSS Action Plan have been much inferior compared to what was envisaged. For example, 48 performance indicators out of 86 under programme reforms were either seriously or moderately off-track. Similarly, 33 out of 50 performance indicators under institutional reforms were off-track. There is therefore an urgent need for high-level closer monitoring of reform activities. A revised plan with a new set of deadlines and regular monitoring could be useful in bringing the targets on track and improve the implementation of reforms. Besides, concrete progress in major programmes is deemed to be critical for overall success of the NSSS.

Adjusting the social security transfers with inflation should also receive serious attention in order to preserve the value of transfers. For example, all cash transfers extended through the lifecycle-based core schemes should be indexed to inflation in order to prevent the transfer values from falling. One of the key objectives of NSSS had been to strengthen and consolidate the transformation of SSPs towards a lifestyle-based support system. But progress on consolidation of larger programmes has been very slow - especially in programmes for vulnerable women and children, workers and the disabled.

A major weakness detected by the review was lack of capacity in most line ministries in drafting concept notes and other technical materials required for advancing the reforms. Consequently, there is no alternative to up-skilling and enhancing these capacities of the relevant entities, especially the Ministry of Social Welfare - the key implementing agency for implementing SSPs in the country. The general economics division and the social science research council of the planning ministry can extend support in this area.

Five thematic clusters - 'social allowances', 'food security and disaster assistance', 'social insurance', 'labour/livelihood interventions', and 'human development cum social empowerment' - have been set through the NSSS. But failure to hold cluster meetings at regular intervals has remained a major problem. In this situation, quarterly cluster meetings should be made mandatory for the concerned ministries. The communications and information flow among the line ministries should also be strengthened, as it is a critical ingredient for coordination and consolidation of programmes. Besides, a high-level task force should be constituted in addition to the Central Management Committee under Cabinet Division for overseeing the implementation of reforms.    

Dr Helal Uddin Ahmed is a retired Additional Secretary and former  Editor of Bangladesh Quarterly.

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