Addressing multidimensional vulnerabilities is a must for inclusive economic recovery
Before the Covid-19 pandemic, Bangladesh was steadily progressing with sustained economic growth. Extreme poverty rate in 2019 dropped to 10.5% and Bangladesh marked significant achievements in various human development indicators and meeting Sustainable Development Goals (SDG). However, the Covid-19 pandemic slowed down the progress by unearthing the economic dynamics of the public health crisis.
A significant number of our population lacks the capacity to cope with such a massive shock and the countrywide economic slowdown, making life and livelihood even more difficult for the people living in poverty and extreme poverty. Many people with per capita income just above the poverty line but below the median national income fell below the poverty line, giving rise to the term “new poor.” The situation is particularly acute in the urban and peri-urban areas, where people are more dependent on non-farm activities, driving many to migrate back to the villages.
The struggles continue
The deepening impact of the situation is revealed in a survey conducted this year by Power and Participation Research Centre (PPRC) and the Brac Institute of Governance and Development (BIGD). It found that, although the national economy is gradually recovering, people experiencing poverty are still struggling with livelihoods and dealing with emerging vulnerabilities including debt, savings depletion, and increased expenditure on non-food items.
The study also suggests that the number of new poor in March 2021 stood at 14.8%, which was 21.2% in June last year, highlighting that a significant number of the new poor has not regained steady income yet.
To tackle the challenge, the Bangladesh government, NGOs, civil society, and other stakeholders have set new strategies focused on large-scale emergency support and economic recovery activities, starting from basic health and hygiene materials distribution to dry food and cash distribution. As per the eighth Five Year Plan, approximately 4.3% of GDP has been allocated for infection preventive measures and economic recovery packages.
But this is still not enough and not all-inclusive. In many cases, these new initiatives have not reached the people living in extreme poverty in hard-to-reach areas. Furthermore, many new poor families also remain left behind.
To address this situation, the government essentially needs to advance its targeting process to identify the most vulnerable population, understand their multidimensional needs, and provide support in the most effective and efficient manner.
A national database of the vulnerable population with access to all the relevant stakeholders has become an urgent requirement for the present time to ensure Covid-19 emergency and recovery support. Also, the targeting system of the recipients must be highly efficient to prevent pilferage of the resources.
Policy-makers should further consider the inclusive social protection programs as an important strategy for long-term solution, enabling the families living in poverty and extreme poverty to go through social transformation, instead of providing short-term financial inclusion or allowance based support only.
Allocations for the overall social protection system and each of the social safety net allowances as well needs to be increased, adjusting with the inflation rate and market price increase of the essentials. Policy-makers should also consider the eligibility for receiving more than one social safety net allowance by a single recipient, based on the depth and dimension of their vulnerabilities.
The recently announced fiscal budget (2021-2022) has an increased net allocation for the social safety nets, but it has not provided adequate focus on the hardships of all the people experiencing poverty and extreme poverty. It also lacks holistic and specific direction for the new poor.
The Centre for Policy Dialogue in an analysis views that about 80% of the government’s Covid-19 response funds allocated in the next budget comes in the form of liquidity support, which is largely inadequate for all the three categories of poor to progress their recovery initiatives.
Thus, there is an urgency for keeping budgetary provisions to help these populations mend the troubles caused by the pandemic, which include among others, spending less on food, health, and education, sending children to work, and taking high interest loans.
In this heightened and continued crisis of the pandemic, policies are essential to control further deepening of intergenerational poverty. Thus, the current discussion on poverty eradication, steady economic recovery, and other broader development issues of employment, inequality, health, and education should essentially be combined to make sustainable poverty alleviation impact.
The government’s social protection system should adopt holistic livelihood programs, giving the most vulnerable the “big push” to break the poverty trap permanently. Such livelihoods programs should be well-targeted, jointly designed, and implemented on a large scale by the government and its development partners.
A countrywide mapping of the affected job sectors as well as opportunities of new jobs and small and informal businesses can also support all actors to formulate suitable skills development and other interventions.
In recent years, the collaboration between the state and non-state actors in both policymaking and implementing poverty solutions has increased. This partnership will hopefully gain more and more strength to effectively address the multidimensional needs of the people experiencing poverty, and bring Bangladesh back to the path of steady economic growth and sustainable poverty eradication.
Rozina Haque is the Programme Head at Ultra-Poor Graduation programme, BRAC. Upoma Mahbub is the Senior Manager, Advocacy, Ultra-Poor Graduation programme, BRAC.