Amidst thoroughly addressing social protection, the Asian Development Bank (ADB) and the government of Bangladesh have forged a groundbreaking partnership to fortify the nation’s capacity to safeguard its most vulnerable populations, with a particular emphasis on strengthening institutional frameworks for social protection policies that integrate gender equity and social inclusion.
This partnership is solidified by a $250 million loan agreement from the ADB, which aims to facilitate reforms that enhance the coverage and efficiency of Bangladesh’s social protection mechanisms. These mechanisms are designed to support marginalized communities, notably by empowering women and strengthening resilience against vulnerabilities through policies that pursue transformation, leverage human capital, and promote the rights of all citizens.
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The agreement, signed on June 10, 2024, underscores a shared commitment by the ADB and Bangladesh to foster a society where social protection is an integral component, complementing initiatives to reduce poverty, build capacity, and promote the rights of disadvantaged groups, particularly in sectors where their representation and inclusion should be strengthened, such as education and healthcare.
Redefining Social Protection: Concepts and Functions
Social protection and social services share some common components and activities, yet their operational aspects exhibit distinct differences. While social protection typically falls under the broader purview of social services, it encompasses various objectives, ranging from reducing poverty and vulnerability to building human capital, empowering women and girls, improving livelihoods, and responding to economic and other shocks (Figure 1).
The conceptual approaches to analyzing social protection objectives and functions are multifaceted, each offering a unique lens through which to conceptualize potential impacts.
These approaches encompass transformation, human capital, vulnerability, and human rights. The four key social protection functions – protective, preventive, promotive, and transformative (Figure 2) – were initially conceptualized by the World Bank, with the transformative element positioning social protection as a catalyst for not only alleviating poverty but also transforming lives by rebalancing unequal power relations and reversing barriers that engender vulnerabilities.
A Multifaceted Approach to Social Protection
Social protection programs in Bangladesh have been broadly classified into five distinct types: social allowances, social insurance, labor market interventions, informal social protection, and miscellaneous types (Figure 3). This comprehensive classification reflects the multifaceted nature of social protection and its ability to address diverse societal needs.
Enhancing Program Management and Introducing Contributory Schemes
The new ADB program supports the government’s Action Plan Phase II of the National Social Security Strategy (2021-2026), with a focus on improving the management of social protection programs. This includes the introduction of contributory protection schemes aimed at reducing vulnerability and preventing further descent into poverty. By ensuring that beneficiaries contribute to and benefit from these schemes, a sense of ownership and sustainability is fostered, empowering individuals to take an active role in their own social protection.
Technical Assistance and Capacity Building
To support the implementation of these initiatives, ADB will provide a $1 million grant from its Technical Assistance Special Fund (TASF 7) and an additional $1 million grant from the ADB-administered Community Resilience Partnership Program Trust Fund. These grants will facilitate program implementation, technical and policy analyses, and capacity building for relevant government agencies, ensuring the necessary infrastructure and expertise are in place to achieve the program’s ambitious goals.
Safety Net Programs in Bangladesh
As Bangladesh transitions to a developing nation, it expands social safety net programs to support more citizens amid inflation. Following a cabinet meeting, the government will add 4 lakh new beneficiaries without increasing allowances, demonstrating a commitment to social welfare despite fiscal constraints.
Recent finance ministry circulars aim to improve program efficiency and combat misuse. Major schemes, like old age and widow allowances, will expand to provide essential relief during the cost-of-living crisis, with inflation above 9% for 13 months. These programs are vital in addressing poverty and vulnerability.
These programs aim to reduce poverty and enhance human capital. They cover a range of assistance forms, including:
- Income security for the elderly, widows, and persons with disabilities
- Temporary employment opportunities for working-age men and women
- Support for the healthy development of young mothers and children
- Cash/in-kind transfers: These provide direct financial or material support
- Public works: Creating temporary employment opportunities
- Incentive schemes: Encouraging education and health for poor and vulnerable households
Social safety schemes
In the current fiscal year, around 5.8 million elderly individuals receive Tk600 per month from the ‘Old Age Allowance’ program, with plans to add two lakh more beneficiaries next year. The government has allocated Tk4,205 crore for this program, targeting men over 65 and women over 62 with an annual income below Tk10,000.
Similarly, the ‘Widow, Deserted, or Destitute Women’ program, with a budget of Tk1,711 crore for 2023-24, will also expand by two lakh beneficiaries. Eligible women aged 18 and above, earning less than Tk12,000 annually, receive Tk550 per month.
While some allowances remain unchanged, others have been increased for better support. The Mother and Child Benefit Program’s allowance will rise from Tk800 to Tk1,000, and from FY25, senior citizens aged 80 and above will receive Tk900 per month, up from the current Tk600.
ADB’s Previous Contributions
The first loan package’s initial sub-program covered eligible beneficiaries in 150 upazilas, while the second sub-program, implemented in the last fiscal year, extended coverage to an additional 112 upazilas. According to the completion report of the first phase, both the Old Age Allowance (OAA) and Widow Allowance (WA) achieved full coverage of eligible beneficiaries, totaling 5.70 million under OAA and 2.48 million under WA in the fiscal year 2022-2023 in 262 upazilas. Additionally, the number of beneficiaries under the Mother and Child Benefit Program (MCBP) rose by 0.21 million to 1.25 million in FY23 compared to the previous year.
Reforms implemented in Bangladesh facilitated the integration of at least 80% of social protection programs with cash-based benefits into a standardized and seamlessly integrated management system,
linked to the Government-to-Person (G2P) platform by June 2023. A significant portion, approximately 60%, of cash-based social protection benefits were directed toward disadvantaged women, marking a concerted effort to address gender disparities.
Furthermore, these reforms led to a reduction in the fragmentation of social protection programs across three ministries, streamlining efforts for greater efficiency and impact.
The expansion of active mobile financial services accounts to 5% played a pivotal role in enhancing financial inclusion and accessibility to social protection services.
Additionally, the establishment of at least 50 mobile clinics in 10 city corporations further augmented healthcare access, particularly in underserved communities. Looking ahead, the Asian Development Bank (ADB) has outlined a robust pipeline of development projects for Bangladesh.
As of 2024, these projects encompass 40 firm projects valued at $7.9 billion and an additional 40 standby projects totaling $8.5 billion. Additionally, the ADB’s technical assistance program encompasses 45 projects with a cumulative investment of approximately $40 million, signaling a sustained commitment to supporting Bangladesh’s development priorities.
In conclusion, the $250 million loan agreement between ADB and the government of Bangladesh represents a comprehensive effort to strengthen the nation’s social protection system. By addressing key areas such as coverage, efficiency, financial inclusion, and climate resilience, the program aims to create a more inclusive and resilient society, capable of supporting its most vulnerable members.
