DHAKA, January 9, 2018 – Today, the government of Bangladesh signed an agreement with the World Bank to improve the equity, efficiency and transparency of its major safety net programs.
The $245 million additional financing to the Safety Net Systems for the Poorest Project will help improve beneficiary targeting, information management, and benefit payment of the country’s five large safety net programs. These are: the Employment Generation Program for the Poorest, Work for Money, Test Relief, Vulnerable Group Feeding, and Gratuitous Relief. Implemented by the Department of Disaster Management, these programs collectively reach over 9 million poor and vulnerable households.
In FY 2017, Bangladesh spent around $3.5 billion on social protection, which was about 1.4 percent of its Gross Domestic Product. To ensure effective use of public resources, the World Bank is supporting the country to build common digital platforms to better administer safety net programs.
“An integrated social protection service delivery system will help ensure equity, build resilience and create opportunities for the poorest population. At the same time, it will reduce administrative efforts, costs and errors,” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal. “Efficient and transparent delivery of social assistance to the right households at the right time will help Bangladesh reduce poverty and boost shared prosperity.”
Currently, only the Employment Generation Program for the Poorest Program is administered with a management information system. The program also pilots digital payment of benefits to the target beneficiaries. The financing will help digitization of the other safety net programs as well as scale up digital payments using various technologies.
The financing will also help the Bangladesh Bureau of Statistics (BBS) to complete the country’s first universal poverty registry – the National Household Database. The database will be integrated with information systems of various ministries and agencies to use for beneficiary selection purposes. For this, BBS has already completed data collection in Barisal, Rangpur and part of Mymensingh divisions. This month, BBS will start data collection in Dhaka and Chittagong divisions.
“The government of Bangladesh is committed to strengthen its safety net management and oversight capabilities by developing an integrated social protection service delivery system, in line with recommendations of the National Social Security Strategy 2015,” said Kazi Shofiqul Azam, Secretary, Economic Relations Division. “The additional financing is a critical milestone in this process.”
Kazi Shofiqul Azam and Qimiao Fan signed the agreement on behalf of the government of Bangladesh and the World Bank, respectively, at the Economic Relations Division. With this additional financing, World Bank support to the project now stands at $745 million. The credit is from the International Development Association (IDA), the World Bank’s concessional lending arm. The credits are interest-free and repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 percent.
The World Bank was among the first development partners to support Bangladesh following its independence. Since then, the World Bank has committed close to $27 billion in grants and interest-free credits to the country. In recent years, Bangladesh has been the largest recipient of the World Bank’s interest-free credits.