Social Protection and Safety Net

Social Protection and Safety NetInstitute of Microfinance (InM) organized a special seminar titled “Social Protection and Safety-Net: New Findings on Safety-Nets in Developing Countries” at the conference room of PKSF on 31 May 2009. Mr. Ariel Fiszben, Chief Economist, Human Development Network, and Ms. Margaret Grosh, Social Protection Economist, Human Development Network of the World Bank were key note speakers in the seminar. With Professor M. A. Baqui Khalily, Executive Director, InM in the Chair, the seminar was attended by the researchers, academicians, representatives from MFIs, and World Bank, and other development partners and agencies, and civil society.

Ms. Margaret Grosh started the presentation with conceptual aspects of safety-nets and social protection terming safety-net ‘non-contributory transfers targeted to the poor or vulnerable.’ She revealed that in most countries safety-net was 1 to 2 percent of GDP. She insisted that all the countries should have good safety-net measures against poverty and vulnerability. She stressed understanding the contribution of safety-nets to poverty reduction as they enable the poor to invest in areas like nutrition and schooling of their children, and help them manage risks. At the same time, they help the governments bring in reforms to their social protection mechanisms.

While mentioning the criteria of good safety-net services, Ms. Margaret considered efficient administration supported by financial resources, and time management, and needed skills to ensure cost-effectiveness. For safety-net to work well, the program mix should differ from region to region, according to needs and policies specific to the regions.

social_safety3She elaborated a program titled “Conditional Cash Transfer (CCT),” aimed at reducing poverty by making welfare programs conditional upon the response or performance of the recipients. For example, the selection criteria may be the children’s enrollment into schools, children’s receiving vaccinations, household members’ visit to doctors, or the likes. She termed microfinance “a complementary program to CCT”, and said, “CCT can be an effective instrument of social protection, if implemented alongside other safety-net programs. To get the best out of it, the program should be linked to microfinance programs.”

In the open discussion session the participants asked various questions to the speakers, which were mostly about the mechanism of safety-net, whether safety-net programs like CCT is capable to reach the hardcore poor, etc.

Mr. Fiszben, in his turn, spoke in the same tune of Ms. Margaret. He virtually responded to the queries lobbed by the participants. He lauded Bangladesh for effectively using microcredit in its poverty reduction endeavor, and expressed optimism that this country’s poverty alleviation strides would be further strengthened, if safety-net programs like CCT are put into operations, alongside microfinance.

Session Chairman Professor Khalily in his concluding remarks overviewed the key points of presentation of the speakers and hoped that the experience of World Bank as gained through the implementation of CCT may be implemented in Bangladesh.

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The Institute works for developing the overall capacity of the financial sector and strengthening the links between the financial and real sectors through undertaking research, training, education, knowledge management and other programmes in priority areas including inclusive finance, microfinance, poverty and development.

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