1. Rizwanul Islam E-mail: rizwanul.islam49@gmail.com
Employment and Social Protection in Bangladesh: An Analysis with a South Asian Perspective
Rizwanul Islam

2. Contents
The « development failure » and the nature of labour markets in South Asia
Definition and modalities of social protection
Social protection in Bangladesh
Social protection in South Asia: a comparative perspective
Financing and affordability
Other issues and questions

3. The « development failure » and the nature of labour markets in South Asia
Development failure despite moderate to high rate of economic growth
Slow rate of structural transformation of the labour market and persistence of surplus labour
Predominance of the informal segment of the economy and the labour market

4. The « development failure » and the nature of labour markets in South Asia (contd.)
Open unemployment
increased in Bangladesh, India, Nepal and Pakistand
Declined in Sri Lanka (after mid-1990s)
Underemployment
Difficult to provide a clear picture
But no doubt about its persistence at high levels

5. Labour Market: Open Unemployment Rate (% of labour force)
Country
1990s
Recent
Bangladesh
2.5 (1996)
4.3 ( )
India
3.7 ( )
5.0 ( )
Nepal
4.5 (1996)
8.8 (2001)
Pakistan
4.3 (1994)
7.4 (2004)
Sri Lanka
13.0 (1994)
5.2 (2008)

6. Labour Market: Employment in Agriculture (mill)
Country
1980
1990
2005
Bangla-
desh
13.00
19.80
( )
22.90
India
207.31
( )
239.41
( )
258.79
( )
Pakistan
12.64
15.43
18.60
Sri Lanka
1.88
(1981)
2.36
2.31

7. Labour Market: Informal Sector Employment
Country
Period
Trend
Bangladesh
1980s,1990s and after 2000
Increasing
India
1970s to 1990s
Pakistan
Decline followed by increase
Sri Lanka
1990s and after 2000No major change

8. Structure of Labour Market (contd.)
The share of regular wage employment has increased in India and Pakistan
But in India, the share of self-employment increased at a faster rate than wage employment
The share of own-account workers increased in Bangladesh and Sri Lanka

9. The Challenge of Social Protection
The major challenge:
High proportion of employment in the informal economy
Difficulty of covering the informal economy with conventional measures of social protection
High incidence of poverty
Vulnerability to crises and shocks of various types
Going beyond risk and vulnerability: basic services (e.g., education, health) for enhancing capabilities

10. Definition and Modalities of Social Protection
Protection against multi-dimensional deprivation (e.g., old age, ill health, unemployment, etc.)
ILO’s Philadelphia Declaration
Emphasis on basic income and medical care
ILO Recommendation No. 67 (1944) and No. 69 (1944)
ILO Convention No. 102 (1952)
Nine areas for social insurance

11. Definition and Modalities of Social Protection (contd.)
ILO C102 (1952): Nine areas for social insurance
Medical care
Sickness benefits
Unemployment benefits
Old age
Employment injury
Family size
Maternity
Invalidity
Widowhood

12. Definition and Modalities of Social Protection (contd.):
ILO’s World Labour Report 2000
Social insurance (contributory)
Social assistance (tax-financed, for those with low incomes)
Public schemes
Private non-statutory schemes
Employment guarantee as a form of unemployment insurance

13. Definition and Modalities of Social Protection: (contd.)
Asian Development Bank
Definition encompasses population at large, not only workers
Five kinds of activities
Labour market policies and programmes
Social insurance programmes
Social assistance
Micro and area-based schemes
Child protection

14. Definition and Modalities of Social Protection (contd.)
Emergence of a broad-based notion of social protection
Core measures of social security (social insurance)
Social assistance: unconditional transfer (mostly tax financed)
Conditional transfer (labour market and other development programmes)
Complementary development interventions (e.g., micro credit)

15. Social Protection in Bangladesh
Pension:
1.2 million government employees eligible for pension after they retire at 57 years
1.7 million aged over 65 years get old age allowance introduced in 1998
Tax financed social assistance scheme
Targets the poorest 20 people in each ward
Means tested,recipients selected by the community
Administered by the government (Min of Social Welfare)
Costs about 0.03% of the GDP

16. Social Protection in Bangladesh (contd.)
Conditional transfers of cash and food:
Food for education (FFE) introduced in 1993
FFE replaced by cash for education programme in 2002
Condition: school enrolment and attendance
Female secondary stipend programme
Condition: attendance at secondary schools and delayed marriage
Vulnerable group development programme
Food transfers to destitute rural women
Condition: participation in skill development programme

17. Social Protection in Bangladesh (contd.)
Conditional cash and food transfers:
Employment programmes
Food for works (began in 1976, run by WFP),
Rural maintenance programme (began in 1976, run by CARE)
Rural infrastructure development programme (replaced FFW in 2002)
100-day employment programme (introduced in 2008 in the wake of the food price crisis)
Employment programme for the hard core poor (replaced the 100-day employment programme)

18. Social Protection in Bangladesh (contd.)
Two approaches to employment programmes:
Employment based safety nets
Labour intensive infrastructure for development
Ambivalence about the objective of employment programmes
Prerequisites for safety net programmes to graduate into development programmes
Planning and implementation of schemes
Allocation of resources between labour and materials

19. Social Protection in Bangladesh (contd.)
Complementary development interventions through micro credit
Mostly NGO driven, although there are many government programmes also
Some 18 million borrowers
Positive impact
Minimises consumption fluctuations
Contributes to empowerment of women
Contributes to children’s education
Provides health services
Promotes skill development

20. Social Protection in Bangladesh (contd.)
Criticisms against micro credit programmes
Inability to pull borrowers out of the cycle of credit
Bypassing the hard core poor
A point to note:
Micro credit programmes are « promotional » rather than « Protective »

21. Social Protection in Bangladesh (contd.)
Complementary development interventions aimed at the hard core poor
BRAC: Challenging the Frontiers of Poverty Reduction (targeting the ultra poor)
Transfer of income generating assets
Daily stipend (Tk 300 p.m.) until income is generated
Health and education support
Training and social development linked to micro credit
Water and sanitation
Development of supportive community networks (via Village Poverty Reduction Committees)

22. Social Protection in Bangladesh (contd.)
Complementary development internventions for the hard core poor (contd.)
PKSF Programme Initiative for Monga Eradication
Cash for work schemes during the lean season
Emergency credit
Consumption loans
Specially designed flexible credit support
Building skills and coping capacity

23. Social Protection: A South Asian Perspective
Old age pensions exist in some form in most S. Asian countries (but cover a small % of the population)
Apart from formal pensions, old age assistance is also being introduced (small coverage)
Conditional transfers through employment programmmes:
India has taken the lead through the NREGP
Bangladesh has rich experience
These experiences could be combined to draw lessons

24. Social Protection: A South Asian Perspective (contd.)
Conditional transfers for education:
Bangladesh has good experience
Nearly full attendance among beneficiaries
Promoted 9-17 percentage point rise in school enrolment ) from a base of 55%)
Significant rise in female enrolment
Social protection for the informal economy
India leads the way by enacting Social Security for Unorganized workers in Dec 2008

25. Social Protection: A South Asian Perspective (contd.)
India: Act on Social Security for the Unorganized Workers
Would cover 340 million workers
Areas of protection would include:
Life
Health
Diasbility
Old age (with contributions from workers)
Employment injury
Maternity
The Act in India demonstrates that social protection for the informal economy is not impossible

26. Financing and Affordability (cost of basic social protection as % of GDP) (Figures within parentheses represent cost without health care)
Countries
2010
2020
Bangladesh
6.0 (4.5)
5.6 (4.1)
India
3.7 (2.2)
3.3 (1.8)
Nepal
7.2 (5.7)
7.9 (6.4)
Pakistan
3.9 (2.4)
4.2 (2.7)

27. Other Issues and Questions
Issues relating to transfers through employment programmes
Target groups versus universal
Guaranteed or not (legislation)?
Gender
Finance (government budget or donor?)
Design and implementation of schemes
Institutions (government vs elected local bodies)
Participation
Impact
Employment and income
Creation of infrastructure and assets
Production
Sustainability

28. Other Issues and Questions (contd.)
Protective vs promotional measures
Can promotional measures provide real protection?
Conditional vs unconditional transfers
Limitations of conditional transfers
Social safety net vs social protection

29. Other Issues and Questions: Social Protection during Economic Crisis
Absence of « automatic stabilizers »
What has happened to allocation for employment programmes?
Allocation under India’s NREGP increased 2.5% which is much lower than the rate of inflation
Bangladesh has a programme for the hard core poor
Can that meet the needs of retrenched workers?
Health: allocation in India has declined

30. Concluding Remarks Positive: Some awareness and progress
But a lot more needs to be done
Especially for those in the informal segments of the economy
And for those hit by the consequences of economic crisis and other shocks (e.g., natural calamities, food price crisis)