Bangladesh - Employment Generation Program for the Poorest
Paving the way out of seasonal poverty
April 11, 2014
The seasonal job drought hits the poorest the hardest as they struggle to put food on the table and cater for basic needs of their families. Men are forced to leave for the city in search of employment, leaving women and children in the villages. Reaching these people, the ‘most vulnerable’ in society, has always been the greatest challenge for the Government of Bangladesh. The lack of effective targeting of government resources, transparency and accountability within the food distribution system as well as reliable monitoring to ensure results are being achieved, are key challenges that prevent resources from reaching these vulnerable populations.
The sheer scale of poverty in Bangladesh and the limited fiscal space in government budgets given the on-going global financial crisis mean that both recipient governments and donors alike are looking for smart programs that allow for a maximum social return on investment. By focusing on providing short term employment on community subprojects to enable households to better cope with vulnerability while strengthening government implementation capacity, the EGPP is an example of such a smart program.
The EGPP targets the most vulnerable in society in a number of ways. First, a greater proportion of funds are channeled to the poorest Upazilas (sub-districts), especially along the coastal regions. Second, only households with less than half an acre of land and where the household head is a manual laborer are eligible. Third, wages are set at below market wage level to attract only those who need the money the most. Furthermore, one-third of all beneficiaries include women. This gender quota increases the probability of particularly female-headed households who are particularly vulnerable, to benefit from EGPP. Male and female beneficiaries receive the same amount of daily wages, making the program particularly attractive for poor women.
The EGPP is a new generation of safety net programs that places extra emphasis on innovations and results while improving transparency and monitoring. Independent spot checks reveal consistent improvement in program implementation, namely in the area of systematic formalization of institutional arrangements based on continuous feedback from the field.
The World Bank through the International Development Association (IDA) has been supporting EGPP through a results-based credit whereby funds are released upon achievement of results in the areas of improved targeting, better monitoring and evaluation and increased use of better governance measures. This approach creates incentives for efficiency and allows for innovation, making the EGPP the dynamic program it is today.
With additional grant funding, the IDA is also supporting pilot projects aimed at testing electronic worker attendance systems that linked to payments using mobile phones and Postal Cash Cards Since 2010, the EGPP has provided over 164 million employment days and distributed a total of $363 million in wage income. With only five years in operation, the EGPP has become one of the largest safety net programs in Bangladesh and received the highest increase in Government budget allocation in FY 2012-13 and again in FY 2013-14.
With the money I earn from building roads, at least I have enough to put food on the table.
Since the project began at the end of 2010:
- 700,000 people in extreme poverty are now employed every year, of which over 230,000 are female
- 95 percent of sub-projects help to build and repair rural roads
- 1,489,000 of the beneficiaries from women headed households.
- 54 million work days have been created per year
- 100 percent of payments are made via beneficiary bank accounts
- $180 million has been allocated by the government in FY 2014, up by US$25 million from the previous year.
Bank Group Contribution
IDA financing of $150 million for the Employment Generation Program for the Poorest (EGPP) was approved on November 30, 2010. The project is scheduled to close on June 30, 2014. $1 million in grant resources from the Rapid Social Response MDTF are being utilized to develop an electronic attendance and payment verification system.
The project is providing financing of the Employment Generation Program for the Poorest and operational support to the implementing agency, the Ministry of Disaster Management and Relief, Government of Bangladesh.
Recognizing its positive results, the Government of Bangladesh increased the allocation for EGPP in FY2013-14 by almost 20% from $150 million to US$180 million, and a 40% increase over the initial allocation of $125 million when the program started. The program is expecting to reach a further 630,000 thousand people in the coming fiscal year and to deliver a further 24 million employment days. With the constant threat of natural disasters and global warming creating longer and harder lean periods, the support provided by EGPP is needed more than ever before so that a crop failure or a poor harvest does not turn into a famine.
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