On social safety net
Sunday, 29 June 2008

A series of social safety net programmes apart from seeking of international support for expansion of the to provide sustenance to the ultra-poor, now struggling for bare existence has been taken recently. Finance Adviser Dr Mirza Azizul Islam quite correctly said the increase in prices of fuel oil, fertilizer, and especially the food has also threatened family budget, affecting the government ability to provide social safety net for the people. He pointed out that international donors frequently commit to provide assistance to social safety net programmes and climate changes issues, but so far they have not provided any additional assistance in these regards. At present, the World Bank and IMF are very much concerned about food price increase, but they have taken no concrete initiative so far, he lamented. In fact, given the critical situation following steep prices of essentials including cereals, there is a pertinent need for expansion of the country’s food security network in order to cover the maximum number of ultra-poor. The focus should be on social safety net programmes for the 56 million people who still remain below the established calorie intake-based poverty line with 27 million living in extreme poverty. Today, food poverty has remained at an alarming level in Bangladesh and food transfer is essential not only for social and nutritional safety net but also as part of the government’s strategy in market stabilization. This means that even the middle- and lower middle-class will have to take a hit in their purchasing power in the short-term and change their consumption patterns before their incomes rise adequately to enable them to adjust to this reality. However, there is little doubt that the poorest households are ill-equipped to shoulder this additional burden. They need to be protected through some targeted subsidy, largely by shifting the savings from the general subsidy on oil and wheat  from which even the more affluent households benefit  to finance such support.

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