Plugging loopholes in social safety-net programmes

It is nothing surprising that the visiting International Monetary Fund (IMF) team, now assessing the progress made in carrying out necessary reforms/ changes tagged with the Fund's $4.7 billion loan support for Bangladesh, has picked up, among others, the issue of safety-net leakages. The ongoing review being done by the team is seen as very important, as the Fund is yet to release the third tranche of the loan.

The leakages of resources allocated for the safety net programmes, designed to benefit the hardcore poor, distressed women and old-age people, have been the centre of discussion by both external and domestic agencies and experts for  long.  Indeed, the IMF officials have pointedly asked the Bangladesh officials precisely what specific measures have been taken "to ensure that allocations under the social-safety-net recipe go to the designated persons." For decades, social safety-net programmes have been a prime area for corruption and pilferage. The government's audit investigations have unearthed the vast scope for wrongdoing in the financial allocations that take place at various stages of distribution. More often than not, designated recipients are left out of such programmes and this is an area of interest for the IMF, and rightly so.

Regardless of how state functionaries and policymakers may feel about the issue, corruption needs to be tackled head-on. It has been eating away at all the gains that the State has made (and continues to make) in development. Policymakers simply cannot ignore the systemic problems present in the state of governance and also the social safety-net programmes that involve hefty financial allocations from the national budget (and often foreign assistance). The need for serious oversight is not just welcome but it should be made mandatory. That the multilateral lending institutions are enquiring into this is a step in the right direction because such "leakages" more often than not involve cash distribution which is difficult to keep track of. This is where there is massive scope for corruption as there had been little in the way of verification as to precisely who was getting the handouts.

It is understood that all ministries and divisions involved in running such programmes must ensure that intended recipients are getting their allocations through mobile financial services. This is a method that has been used before and with resounding success in Bangladesh. Some years ago, the audit general's office came up with a similar initiative that targeted another graft-ridden programme i.e. the pension system. For decades, billions of Taka had been siphoned off because the entire system was manual and provided ample opportunity for unscrupulous elements to make off with huge sums intended for pensioners. Once the system was digitised, pensioners with national identification numbers (NIDs) had the option to receive their money either in bank accounts or in their financial wallets of applications such as bKash, Nagad, etc. However, the wrong selection of beneficiaries at the local level is a serious problem that deserves thorough scrutiny with all seriousness. 

As the government already has a tried-and-tested formula in its possession, there is no reason why it cannot be replicated successfully for social safety net programs where cash is involved. It would further demonstrate the State's willingness to initiate those reforms that will benefit the economy and the people in terms of accountability and financial transparency. This is how it can improve its image internationally and show that Bangladesh means business and is serious about plugging the loopholes in the system.