social pensions in Bangladesh

The Asian Development Bank recently published a very useful collection of studies of social pensions, and the entire volume can be downloaded freely without charge. I will post brief extracts from chapters that are case studies of particular countries. I find these valuable, given the dearth of serious studies of old age pensions in Asia. I begin with conclusions of research by Ms Sharifa Begum, from Bangladesh, and Mr Dharmapriya Wesumperuma, from Sir Lanka, on Bangladesh’s Old Age Allowance Programme. Their field work included organisation of a number of focus group discussions in Bangladeshi villages. They find that the social pension “bears immense value to the country’s poor older people”, but caution that it also has weaknesses. Most of the weaknesses, they write, result from targeting, so “can be overcome if the programme is scaled up to a universal one”.

A number of lessons for other Asian countries emerge from the experience of Bangladesh.

The first is that even a low pension level can have a meaningful impact on the lives of older people and their families. The pension level in Bangladesh is very low (at $4.50 per month) and there is a strong argument for increasing it. Nevertheless, the impacts of the pension so far have been far from negligible. ….

Second, especially striking in Bangladesh is the evidence of increased empowerment and dignity of older people. ….

Third, the social pension appears to benefit women more than men. This particularly relates to impacts on health and psychosocial well-being. ….

Fourth, the targeting process has met with significant errors, and discriminated against some of the most marginalized older people. In theory, the relatively high coverage of the social pension means that it should be able to cover the most-poor elderly. However, a large portion of the beneficiaries (20%–40%) do not actually meet the eligibility criteria. Meanwhile, some of the most vulnerable older people miss out. …. Refinement of the targeting mechanism may possibly reduce these errors, but would not get rid of them altogether. ….

Fifth, working with the private sector for pension payments appears to have some benefits, though … a number of issues have arisen through this delivery mechanism. These include … issues of long queues on payday and some cases of malpractice of banking staff. Other countries in Asia considering the use of banks in delivering social pensions and other cash transfers would do well to assess how these issues can be overcome.

An old-age allowance program can be very popular. In Bangladesh, policy makers saw its popularity and this led to substantial expansion of the program within a short period (during 1998–2011 the approved beneficiary population increased from 0.4 million to 2.48 million and the budget allocation rose from Tk485 million to Tk8.91 billion). It is feasible for developing countries to provide such a pension to older people from government revenue, provided there is political will.

Sharifa Begum and Dharmapriya Wesumperuma, “Overview of the Old Age Allowance Programme in Bangladesh”, chapter 8 of Social Protection for Older Persons: Social Pensions in Asia, Edited by Sri Wening Handayani and Babken Babajanian (Asian Development Bank, 2012).

Demographer/Economist Sharifa Begum (born 1949) is a Senior Research Fellow at the Banladesh Institute of Development Studies (BIDS) in Dhaka. Historian Dharmapriya Wesumperuma (born 1938?) is the Regional Head of Programmes, East Asia/Pacific at HelpAge International, Thailand.

This is a very informative and well-written case study.


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