Social access situation and safety nets programmes in Bangladesh

Md Ruhul Amin TalukderResearch Director (In-charge)

Food Planning & Monitoring UnitMinistry of Food & Disaster Management

Dhaka, Bangladesh19 March 2009

Presentation to USAID Mission

Outline of the Presentation

Poverty and inequality situationSafety net programs in Bangladesh: types, coverage & beneficiariesFood based safety nets and PFDSImpacts so farLimitations, issues, challengesWay ahead

Poverty and inequality situation (contd.)

•Poverty reduced at the desired rate from 1991-2007; however in 2007-08 the number increased from the previous yr; abs pov>>+7.5 million; extreme pov>>+6.9 million

•Huge number under extreme poverty line (37.5 million+6.9 million)

•Rural urban differences in reduction process; Differences across regions

•Challenges to sustain the tempo

Division 2000 2005Barisal 53.1% 52.0%

Chittagong 45.7% 34.0%

Dhaka 46.7% 32.0%

Khulna 45.1% 45.7%

Rajshahi 56.7% 51.2%

Syllhet 42.4% 33.8%

Overall 48.9% 40.0%

Poverty and inequality situation (contd.)

In 1992 the poorest quintile had a 6.5 per cent share of national income. This figure fell to 5.3 per cent in 2005.

Main problems of access relate to lack of purchasing power, seasonality, spatial dimension and market access and market functionality including the gender dimension.

Poverty and inequality situation (contd.)

Wide spread Inequalities among the population

Lowest 50% share only 20.32% of incomeIncome Gini Co-efficient rose .45~.47 ; rural area:0.393>>> 0.428In the poorest 20 percent of the population, 80% owned less than half an acre of landInformal labour: wage & terms of jobsMigrant workers having poor health & sanitationMonga in lean seasons Char and flood planes: continuous erosion and floodAcross geography people have different forms of insecurity Natural disasters cause tremendous back flow

Safety net programs in Bangladesh: types, coverage & beneficiaries (contd)

5 types of social safety net programs: (a) cash support program; (b) food aid program; (c) special program for poverty reduction; (d) self-employment though micro credit; and (e) some specific programs for poverty alleviation

Five criteria: i. income criteria; ii. occupational criteria; iii. physical ability criteria; iv. ethnic criteria; iv. gender and children criteria; and v. regional disparity criteria

• about 47 SNPs in Bangladesh- cash and food based, conditional and unconditional ; implemented by different Ministries

•Vulnerable Group Feeding (VGF), Open Market Sales (OMS), Cash for work (CFW)/Food for Work (FFW), Vulnerable Group Development (VGD), Test Relief (TR) and Gratuitous Relief (GR), Old-Age Allowance Scheme (OAAS), Allowances for the Distressed Disabled Persons (ADDP), Allowance Scheme for Widowed and Distressed Women, Cash for Education (CFE), Female Secondary Stipend Programmes, Rural Social Service (RSS), Urban Social Service, Fund for Mitigating Risks for Natural Disasters, Asrayan/Abashan Programme, Housing Fund programme

a large number of NGO programmes>>need to make inventory

Safety net programs in Bangladesh: types, coverage & beneficiaries (contd)

Extended budget:Social Safety Net budget is about 2.14~2.8 percent of the GDP; 13.32%~16.94% of Government expenditure (Source: PRSP-II)

Extended Coverage: (Source: PRSP-II)

Cash Transfer (Allowances) Program (e.g. Old Age Allowance, GR cash, GRA)-4.87

million

Cash Transfer (Special) Program (e.g. Cash For Work, Housing support)- -13.7 million

Food Security Programs (e.g. VGD, VGF, TR, GR, FFW)-9.5 million (23.7 million man-

month)Micro-Credit Programs (e.g. Micro-credit for Women Self-employment):-7.6 millionMiscellaneous Funds: (Fund for the Welfare of Acid Burnt and Disables)- 2.0 million

New Fund: (e.g 100 day employment gen prog)- 2.0 million man-month+0.04 millionDevelopment Sector Programs (e.g. Stipend for Primary Students, School feeding)-15.5 million

Shift in approach: charity approach>>>>>development approach

Public food distribution system and food based safety nets (contd)

Shift from ration based (sales) to non-sales1970s~early 90s sales channels were prominent; early 90s through early 2000s share of non-sales rose sharply, then fell a bit again Average 73% for targeted safety nets since 1997-98, if OMS is included it will be moreSubsidy in the level of 62 million dollar (avg from 2000-01)

Public food distribution over the years

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Monetized Non Monetized Total

Fiscal year

Targeted to total

(%)

1997/98 76

1998/99 88

1999/00 85

2000/01 85

2001/02 83

2002/03 55

2003/04 73

2004/05 63

2005/06 72

2006/07 52

2007/08 67

Average 73

Public food distribution system and food based safety nets (contd.)

Distribution under VGF varies with shocks; 2008-09 not yet ended-1.5 million more hh be covered under VGF

Coverage of VGF and VGD by number of cards distributed

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VGF VGD

Food aid flow in relation to Total Imports

Food aid vs Total imports

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Food Aid Arrival GoB Commercial Private Commercial Total Imports

• Food aid as % of total import fell from 28% in 1997-98 to 7% in 2007-08;

•Food aid as % of total GOB import fell from 100% in 1999-2000 to 48% in 2007-08

Donor wise food aidDonors 1991-2000 avg 2000/01-2007-08 avg

USA 314.7 87.44

WFP 253.92 106.20

Canada 123.83 24.70

EC 115.64 11.63*

Australia 49 37.06

Care 0 9.00

Save the Children 0 5.35

Japan 35.45 3.75

France 16.7 0.00

Germany 4.2 0.00

Pakistan 3.5 1.38

Netherlands 1.5 0.00

India 0.9 3.00

Belgium 0.5 0.00

Sweden 0.2 0.00

Italy 0 0.65

Thailand 0.2 0.13

Other/NGO 6 0.00

Nil last yr

Food aid and distribution in major safety nets

In scaling scale up PFDS, there is need for expenditure reallocation in favour of safety nets, which necessitates increased food aid flow. But the concern is food aid has been dwindling over time, bundled and that timeliness and actual arrival of food aid have less adherence to

what have been committed by DPs.

Food aid in relation to targeted safety nets

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96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08

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Food aid Total major targeted safety nets

In later half of 90s food aid met on avg~74% of distribution under targeted safety nets; from 2000-01 the share fell to ~30%.

Impacts of safety nets

All the SSNPs have immediate economic improvement effects, some development effects as well as empowerment impacts (Source: PRSP-II, BIDS, IFPRI, (2001-2007)

Programs targeted at women have (a) increased women’s participation in household decision-making; (b) improved health conditions of women and their family members; (c) encouraged small investments for income generation in the future; and (d) revived the traditional system of in-family care

FFE/CFE programs impacted long term development by fostering human capital formation through increasing the primary enrolment rate, promoting school attendance, and reducing drop-out rates

Participants’ Perception about assistance from targeted programs in percent (Khan et al, 2006)

  Lowest 10%

Lowest Quintile

2nd Quintile

3rd Quintile

4th Quintile

Top Quintile

Total

Very Helpful 60.5 56.1 56.7 59.2 63.6 50.4 57.6

Moderately Helpful

33.8 37.3 34.1 30.9 26.5 31.5 33.3

Slightly Helpful 5.8 6.6 8.3 9.1 8.9 18.1 8.5

Not Helpful 0.0 0.0 0.9 0.9 1.1 0.0 0.5

presence of local economy effects of social transfers>>need to examine

Issues and challenges of SSNPs

• Fiscal Constraints: dwindling food aid/unpredictability/delay in arrival, Inadequate storage facilities in PFDS, Insufficient resources to import from own resources, Limited Coverage, Inadequacy of the Amount of Transfers

• Institutional Constraints: Absence of Integrated National SSN Policy, Gender specific risks and insecurity in the labour market; Targeting and leakages

• Information Constraints: Missing Poor and New Vulnerabilities; Insensitivity to Geographic and Agro-Ecology Specific Poverty

Way forward •National Social Protection policy- social safety nets and their fit in the

wider development policy•More development orientation of programs•Labour policies to focus on improving conditions for rural and informal workers •Continue and expand coverage; better targeting•Allowance/transfer to increase•Small programs Under One umbrella •Separate program for hard to reach areas•New programs for new vulnerable•New programs for nutritional outcomes, ethnic pop, monga •Improve/enhance PFDS storage system•Improve coordination, periodic review and management efficiency•Strengthen monitoring, evaluation and research•The government will appreciate continued USAID assistance

Thank you