Bangladesh is navigating a deeply troubling period in its national life. Poverty is on the rise, yet neither the chronically poor nor the newly poor are being provided with adequate economic cushions to absorb the shocks.
Worse, nearly 62 million people live just above the poverty line -- just one shock away from falling back into destitution.
Last Tuesday, I read with rapt attention two reports that arrived in my mailbox, both released from Washington, DC. By sheer coincidence, both focused on a critical issue: Ensuring that the social safety net benefits promised by the government actually reach the people who need them most.
The World Bank, in its flagship Bangladesh Development Update, and the food policy think tank IFPRI, in its policy note Modernizing Bangladesh's Social Protection System, highlighted how Bangladesh’s fragmented social safety net programs fail to adequately support their intended beneficiaries -- the poorest of the poor.
At a time when the number of Bangladeshis living below the poverty line is rising for the fourth consecutive year in 2026, it is deeply worrying that a substantial portion of the budget allocated for the poor is ending up in the hands of the non-poor.
The poor are already under severe pressure from widespread joblessness, factory closures, persistent high inflation, and a rising cost of living driven by successive energy price hikes.
The share of the ultra-poor has nearly doubled, from 5.9% in 2022 to a projected 10.1% this year, while the overall poverty rate is projected to rise from 18.7% to 22.5% over the same four-year period.
In total, an estimated eight million people have slipped into poverty between 2022 and 2026, with more than two million joining their ranks in the past year alone.
The core challenge facing Bangladesh’s social protection system is increasingly one of efficiency and coherence rather than aggregate spending. In FY27, the government allocated Tk1.44 trillion to social protection, equivalent to 2.1% of GDP. Yet actual pro-poor spending remains severely limited.
Like the World Bank report, the IFPRI authors Akhter U Ahmed and Md Sadat Anowar also point out, the system is plagued by extreme fragmentation and structural inefficiencies:
Institutional fragmentation: The government administers 90 social protection programs across 25 ministries, resulting in separate eligibility rules, duplicate beneficiary lists, serious coordination challenges, and high transaction costs.
Misallocated funds: Government employee pensions and agricultural subsidies alone account for about 43% of the total social protection budget. The pension program for retired government employees alone accounts for 29% of total spending.
Weak poverty targeting: The 48 programs officially classified as “pro-poor” receive only about 39% of the social protection budget. Moreover, nearly 48% of this pro-poor allocation is concentrated in just four flagship transfers: Family Card, Old Age Allowance, Widow and Destitute Women Allowance, and Disability Allowance.
Highly uneven distribution: The five largest programs absorb about 67% of the budget but reach only 5.5% of beneficiaries. This leaves the remaining programs severely underfunded, resulting in negligible benefits and limited coverage for those who need support the most.
The consequences of these systemic gaps are stark. While the share of households reporting receipt of assistance rose from 24.6% in 2010 to 37.6% in recent years, half of the poorest households remain entirely outside the reach of any safety net.
Conversely, current transfers benefit 31% of people in the richest income quintile.
Alarmingly, the share of total benefits reaching the bottom 40% of the population fell from 51% in 2016 to about 44% in 2022. Meanwhile, broad-based energy and fertilizer subsidies provide significant financial assistance but disproportionately benefit better-off households.
There is a pressing need to improve targeting, increase benefit amounts, expand urban coverage, and scale up successful programs while phasing out inefficient ones so that the effectiveness of the social protection system in uplifting the poor is enhanced.
By improving targeting and reducing benefit leakage, social protection coverage for poor households can be expanded even within the current budget.
It is high time for Bangladesh to review its entire social protection system. The government must redesign and realign these programs to ensure that benefits are substantial, integrated, and strictly targeted towards the population segments that need those most to survive the current wave of economic shocks.
Stronger coordination, interoperable delivery systems, and a shift away from untargeted subsidies are urgently needed to create a coherent social protection architecture.
If we fail to undertake this structural overhaul, massive budgetary allocations will continue to flow into the wrong hands. Meanwhile, the most vulnerable citizens will find it increasingly difficult to cope with skyrocketing inflation, a slowing economy, and pervasive unemployment.
Bangladesh cannot afford support systems that absorb substantial public resources without effectively protecting those most affected by economic shocks. The government must act now to strengthen and leverage its social protection framework so that it can respond effectively to this period of heightened economic stress and external uncertainty.
Reaz Ahmad is Editor, Dhaka Tribune.