Omicron casts shadow over life and business,
Causing worries without any guess.
Ineffective social security programs and packages
Demand new way to manage the damages.
As the daily detection rate from Omicron reaches the worrying level, government has reintroduced sanitary restrictions. Just on Thursday, govt confirmed 3500 cases of Omicron(12%). And the number continues to swell. The number of people vaccinated(less than one-third) is still low compared to total population1. Among others, the restrictions include 1 passenger per seat in public transport , musk-wearing and must vaccination certificate for eating at restaurant. However,main opposition views the restrictions as a tool to contain their movement for freeing chief of the opposition party detained under trumped-up charges. There is some truth in accusation.
But it is the economic concerns of the COVID related restrictions that cause most worry. Platform of businessmen held a press conference and urged govt not to impose lockdown. Lockdown seriously hampers economic activity and businesses are yet to recuperate earlier losses.
Moreover, there has been call from various quarters for widening the social safety net. But misuse of social security programs and incentive packages left a serious blot in government reputation.
Back in August 08,last year I penned a piece titled “Flawed Incentive Programs”2,highlighting irregularities reported in the press on government backed programs. Sharing bits of it again:
… 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 implement ation,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 flat5.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 level7.
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 are able to 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 billion3. 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.
Recently IMF in a report raised concerns as it observed the real forex reserve of Bangladesh Bank should be $39 billion instead of claimed $46 billion. IMF noticed that $7 billion of the reserve used to finance infrastructure projects,to lend local banks ($6.83 billion) to ease dollar demand and to lend abroad8. However, such deductions(spending on non-forex assets) did not reflect on forex reserve. Now only time will tell whether the ailing banks will be able to pay back the money to Bangladesh Bank.
The cry for fresh incentives and social security programs is louder. Without making proper scrutiny of the fate of earlier funds,it would be a mistake to announce fresh packages and credits. The best way to disburse packages is through microcredit agencies as this could thwart away potential default ers or frauds. For administering such packages,respective agency would receive a fee and would charge special or no interest rate. For instance, an agency may receive Tk 5 for managing a credit of Tk 100. Government will lend Tk 100 to microcredit agency and the agency will lend Tk 95 at 0% to people. If soft interest rate is charged then govt's contribution to agency will be lower. In case of any default or calamity, govt may offer further credit.Leakages and losses will be much more lower than the traditional disbursement of social security programs/incentive packages.
And I wrap up with the concluding remarks of the August piece:
Ensuring accountability of all government organizations is the key to plug the holes in leakages of 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.
Notes And References:
1.“Omicron: Spreading fast,Restrictions Begin From Today”,BBC Bangla,January 13,2022,Link here
2. “Flawed Incentive Programs”,Rezaul Hoque, https://hoquestake.blogspot.com, August 08,2021,Link here
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.
7. “Live Stock”,Rezaul Hoque,https://hoquestake.blogspot.com/2020/01/live-stock.html?m=1,January 11,2020.
8.“Forex Reserves Overstated By $7.2 Billion: IMF”,Jebun Nesa Alo, Business Standard, October 23,2022,Link here