Fix social protection flaws instead of expanding outlay

Bangladesh must urgently redirect resources within its fragmented social protection system and scale up a handful of proven programmes that directly benefit the poorest, according to a leading economist.

As the government prepares its budget for the upcoming fiscal year, Akhter U Ahmed, the country representative for the International Food Policy Research Institute (IFPRI), has called for a decisive shift in how social safety net funds are allocated.

In an interview, Ahmed said that while social protection spending has expanded significantly in recent years, the effectiveness of that spending remains in question.

"Reallocation is critical," he said. "We must increase the benefit size, improve targeting, scale up successful programmes and phase out inefficient ones."

Drawing from over three decades of IFPRI policy evaluations and impact assessments in Bangladesh, Ahmed identified five programmes that, in his view, should receive increased allocations in the upcoming budget: the Vulnerable Group Development (VGD) programme, the Mother and Child Benefit Programme, the Old Age Allowance, the Allowance for the Financially Insolvent Disabled, and the Allowance for Widowed, Deserted, and Destitute Women.

"These five programmes together account for around 12 percent of the total social protection budget, excluding pensions, and they currently support about 13 million people," he said.

"If you want to improve the welfare of the most vulnerable, these are the programmes to scale up."

Although Bangladesh has steadily raised its social protection expenditure from Tk 35,975 crore in FY16 to Tk 126,272 crore in FY24, or roughly 2.5 percent of the GDP, experts argue that the structure of that spending has not been recalibrated to meet evolving needs.

According to Ahmed, the proliferation of programmes has diluted effectiveness.

In FY24, Bangladesh operated 115 social protection programmes, but 28 of them accounted for 91 percent of the budget. The top five consumed 58 percent while reaching only 6.2 percent of beneficiaries.

"That shows a significant disparity in allocation."

One of the most pressing concerns is the large share of the social protection budget that goes to pensions for government employees.

"Pensions for government employees and their families received 22 percent of the 2024 social protection budget," Ahmed said. "But most of these people are not among the poor. Social protection should target the poorest of the poor."

Continuing to support an unwieldy portfolio of programmes, many of them poorly designed or politically motivated, undermines the goals of poverty alleviation and food security, Ahmed said.

Only about 15 programmes out of the 115 are really performing well. "The rest either lack proper targeting, are underfunded, or offer benefits too small to matter."

The inadequacy of benefits is a recurring theme. Ahmed cited the long-running Primary Education Stipend Programme as an example.

"It started in the mid-1990s, offering Tk 100 per child attending school," he said. "Even in 2020, the average household was receiving only Tk 130 per month. That's less than 1 percent of a poor household's income."

In contrast, the VGD programme, which distributes 30 kilogrammes of rice per month to poor women, provides a more meaningful transfer. "The value of this rice is about Tk 1,500 per month, which is significant and impactful," he said. "That's the kind of support that improves food security."

He argued that other cash-based programmes, such as the Mother and Child Benefit Programme (currently Tk 800 per month), the Old Age Allowance (Tk 600), and the Allowance for Widowed Women (Tk 550), must raise their transfer amounts to at least Tk 1,500 if they are to deliver sustained benefits.

Urban poverty has become another blind spot in Bangladesh's social protection landscape.

"Urban people are particularly vulnerable during food price hikes because they don't produce their own food," Ahmed said. "They rely entirely on the market. When inflation hits, they suffer the most."

Citing figures from the government's 2015 Social Security Strategy, Ahmed said that 30 percent of rural households benefited from social protection, compared to only 9.4 percent of urban households. "That's a huge gap. Urban areas, especially low-income neighbourhoods and slums, need to be brought under the coverage of effective social protection schemes."

Ahmed called for a major expansion of the Open Market Sale (OMS) programme, which sells subsidised food grains to low-income groups. "OMS is a well-targeted programme because the long waits and low pricing make it unattractive to the non-poor," he said. "But right now, it's seasonal and operates mainly in Dhaka and Chattogram. It should be made year-round and rolled out to other towns."

In addition, he proposed new initiatives such as an employment programme focused on urban environmental cleaning. "This would be a self-targeted programme. Better-off people would not take part in cleaning roads and public spaces, so it would naturally reach the poor," he said.

Crucially, Ahmed stressed that these improvements can be made without increasing the total budget. "We are not asking to increase the budget. What we need is to reallocate existing resources to programmes that are proven to be effective."

He also raised concerns about programme redundancy and inefficiency. "Some of these programmes have been around for decades and no longer serve a useful purpose," he said.

"Others were created to serve narrow political goals. These should be dismantled. By reducing the number of programmes and reallocating funds, we can reach more poor people more effectively."

Ahmed also underscored the need for innovations that address chronic vulnerabilities. "Health shocks are the number one reason families fall into poverty," he said. "Even those who aren't poor fall deep into poverty when a breadwinner gets sick. Yet there is no health insurance in Bangladesh."

To address this gap, he recommended piloting a health voucher system. "It's simpler than social health insurance and can be rolled out faster," he said.

He also pointed to Bangladesh's high rate of adolescent marriage and pregnancy as a challenge that social protection could help address.

"We recommend introducing school feeding programmes for secondary school girls, particularly from poor households," he said. "This should include hot, nutritious lunches and take-home rations of fortified rice and pulses – conditional on the girls remaining unmarried. That can delay early marriage, improve birth weights, and support school retention."

Ahmed backed his proposals with evidence from IFPRI's Transfer Modality Research Initiative, which tested cash and food transfers combined with weekly training on nutrition and health. "We found that impacts were not only immediate but sustained," he said. "We followed up after four years and even after six and eight years – and the benefits persisted."

He also cited BRAC's Targeting the Ultra Poor programme, which provides assets and mentoring to the poorest women. "That model also showed long-lasting gains," he said. "These are the kinds of programmes that build resilience, not just consumption."

As the government prepares to finalise next year's budget, Ahmed's message is clear: spend smarter, not more.

"The government should scale up those five core programmes, increase the size of benefits, and expand coverage in urban areas," he said. "We know which programmes work. Let's invest in them, not in programmes that look good on paper but fail in practice."