Macroeconomic Implications of Social Safety Nets in the Context of Bangladesh

With about 40 per cent of its population living below the poverty line and an increasing number of population being added below the lower poverty line, safety net programmes in Bangladesh are more than a necessary element in fighting poverty. The government has been following a combination of direct and indirect safety net programmes for poverty eradication addressing both human and income poverty. However, despite having a large number of programmes under the safety net, the rate of poverty reduction has not been satisfactory. It is thus crucial to scrutinise the impact of the existing safety net programs on poverty reduction in Bangladesh and identify the kind of programmes that would be more suitable to the socio-economic condition of the country.

This paper, however, does not go into detailed evaluation on which of the various types of safety net programmes has been successful in Bangladesh. Rather it looks at the overall structure of Social Safety Net Programmes (SSNPs) in Bangladesh and their poverty impact. Initially, the paper discusses a number of SSNPs that have been considered to be successful in other countries of the world and highlights the current scenario of Bangladesh. The major objective of the study is to look into the overall impact of the existing safety net programmes on poverty reduction in Bangladesh, in terms of inequality. In the final section, the paper provides a number of policy suggestions on design, target and coverage of the existing safety net programmes.