Doomed Social Security Programs

Huge subsidy and social security Sometimes proved their futility. For the sake of a balanced budget Cut spending for social pocket.

A recent news report divulged that taka 503 crores of social security spending in support of the poor and underprivileged was marred in corruption. The projects were undertaken by Ministry of Social Welfare and Ministry of Planning own probe found gross irregularities in those projects ranging from no presence of greenhouse supposed to augment income earning opportunities, inadequate training programs, misappropriation of funds and so on. As project budget less than taka 500 million does not require cabinet’s approval, these projects were subject of widespread corruption¹. Back in August last year,I penned this piece titled “Flawed Incentive Programs”² to highlight the ineffectiveness of social security spending due to unwarranted corruption. Sharing it again:

In recent weeks, series of reports laid bare flaws and inefficiencies attached to social security programs and incentive packages designed to assuage Corona-battered business community. Built-in corruption in management and disbursement of funds of the programs, as exposed by the news reports, once again undermines people’s trust on government at a moment when it badly needed their support to mobilize resources on measures to restore COVID-hit economy. A news report divulged that Ministry of Social Welfare detected some 87,000 fake beneficiaries who swallowed benefits under social security programs3. The matter surfaced when the ministry is implementing digitization of accounts of beneficiaries. So far 7.6 million accounts have been digitized and 2 millions await to join the list. Another program designed to augment income-earning opportunities for the poor has come under criticism after a government report found irregularities. The 12-year-long "Amar Bari ,Amar Khamar( My Home,My Farm)" benefited 5.7 million people,but 1 million beneficiaries were identified as affluent, not eligible for such program4. Department of implementation,monitoring and evaluation of Ministry of Planning in its report found that 1 million ,17% of the total beneficiaries, fake beneficiaries took interest-free credit reserved for the poor under the “Amar Bari,Amar Khamar” Project(2009-2021) ,costing TK 78.85 billion of taxpayer’s money. Some swindled the credit for 12 years. Not only social security programs, irregularities can be traced even in Corona incentive packages for businessmen. Government allotted credit of Tk 300 billion for big businesses and credit of Tk 150 billion for SMEs at subsidized rate of interest. According to a news report, many businessmen misused the credit by repaying old debts,investing in share market and purchasing flat 5. It derailed the objectives,propelling economic activities, the credit package initially conceived of. Instead of bringing the pace in manufacturing, retail and SME activities, misuse of the fund makes it unlikely to avail more soft credit in the future. So cash-strapped SMEs will face further problems to manage working capitals for their businesses. Earlier 22000 fake freedom fighters had been detected in freedom fighter allowance program. Facing a barrage of criticism, government hardened the procedures for identifying the true freedom fighters and discarded the fake ones from the list. Even corruption mars "home for the homeless" project,which is being implemented by Prime Minister’s Office. Use of substandard materials, project site on flood-prone land and bribery called into question the objective of the whole project.Even PM' s office has started probe in 36 upazilas6. My own survey on rickshawpullers for my site reveals that only a minority of the true target population receives the social security programs. I interviewed 43 rickshawpullers and only three subscribed to any of these programs. And all of them were relatives of local representatives who are responsible for running the operations of social security programs at grass root level. 7 The revelations expose inefficient management of public funds and waste of taxpayer’s money. This will further hold back widening of social security programs and implementation of post-COVID efforts. One thing is apparent that most of the scams in social security programs got exposed while digitizing the database. If mobile operators and mobile financial service providers can sell SIM and open accounts with biometric verification why can the government not go for this step to identify the beneficiary population?Bangladesh runs an array of social security programs from allowance for senior citizens to allowance for freedom fighters. These programs cost Tk 641.76 billion in 2018-19(Source: Bangladesh Economic Review 2019) and in 2021 rose to Tk 955.74 billion. Even tiny scam could wipe out thousands of crores of taxpayer’s money. Seldom heard or reported in the press about the fact that other government agencies had given prior information about murky affairs or shoddy dealings in various programs run by ministries. This fund may fall in wrong hands and may be used to stir trouble at home or abroad or weaken democracy and democratic institutions. So there is no reason to take wasting of taxpayer’s money slightly. Ensuring accountability of all government organizations is the key to plug the holes /leakages in management of public fund and resources. If this continues without any checks, people’s trust on government and government institutions will erode and their support on undemocratic forces may rise. Just throwing the money in gutters in the name of ineffective social security and corona incentives only swell the pockets of a certain quarter who excel the art of misappropriating public funds and those who have evil intentions to cause trouble at home and abroad. Amending the laws to hold all the quarters accountable to constitutional bodies is the first step to stem corrupt practices.

It appears that mismanagement and misuse of public money have become contagious. This tendency only wastes our valuable resources. “Public investment” at the end of the day is just a big failure and a waste of time and money. In a country where caring of public resources, accountability are absent, there is no point to run subsidy and social security programs that hardly meet the intended goals. Removing/downsizing some of the social security programs and cutting subsidy will be a much more desirable move in the wake of growing budget deficit and current account deficit⁸.

Notes And References

1. ”Khatirer Prokolpo ,Iccheymoto Oniyom(Nepotism In Projects,Wilful Irregularities) “,Arifur Rahman,Daily Prothom Alo(P-1),August 01,2023.
2. “Flawed Incentive Programs”,Rezaul Hoque,https://hoquestake.blogspot.com,August 08,2021. For more read at https://hoquestake.blogspot.com/2021/08/flawed-incentive-programs.html?m=1
3. ”87000 Bhatabhogir Khonj Nei(No Trace of 87000 Beneficiaries)”, Najnin Akhter,Daily Prothom Alo, July 26,2021.
4. “Gorib Sajlen 10 Lakh Sochchhol(1 Million Affluent People Played Poor)”,Arifur Rahman,Daily Prothom Alo,August 02,2021.
5. “Pronodonar Taka Noy Chhoy(Misuse of Incentive Money)”, Daily Prothom Alo,July 26,2021.
6. “ Ashrayan-2 Project Scam: 36 Upazilas Under Scanner”,Ali Asif Shawon, Dhaka Tribune,July 06,2021. For more read at https://www.dhakatribune.com/bangladesh/2021/07/06/arshrayan-2-project-scam-36-upazilas-under-scanner
7. “Live Stock”,Rezaul Hoque,https://hoquestake.blogspot.com/2020/01/live-stock.html?m=1,January 11,2020
8. "Another Flawed Incentive Program?",Rezaul Hoque,June 10,2022,https://hoquestake.blogspot.com.For more read at https://hoquestake.blogspot.com/2022/06/another-flawed-incentive-program.html?m=1