Bangladesh spends just 0.9% of GDP on safety nets, far below South Asia average

Highlights:

• Safety net spending only 0.9% of GDP, vs South Asia's 3.8%
• 67.1% of poor people excluded from benefits in 2022
• 62.8% of beneficiaries are neither poor nor vulnerable
• Widow Allowance has 85% exclusion error
• 95 overlapping schemes fragment the safety net system
• Urban programmes receive just 4% of total safety net spending
• New 2026–31 strategy seeks better targeting and reduced leakage

Bangladesh's social protection system is struggling with low spending, poor targeting and fragmented programmes, with core poverty-focused safety net spending standing at just 0.9% of GDP, compared with the South Asian average of 3.8%, according to a General Economics Division (GED) assessment.

The report also found that 67.1% of poor people were excluded from social protection benefits in 2022, while 62.8% of existing beneficiaries were neither poor nor vulnerable, pointing to significant leakage and targeting failures.

The findings were presented today (11 August) at a parallel session, titled "Reconstructing Fragile Economy and Achieving SDGs", at the "National Conference on Navigating Five-Year Strategic Framework for Achieving SDGs: Policy, Partnership and Priorities" at the Bangladesh-China Friendship Conference Center in Dhaka. The conference was organised by the GED.

According to the assessment, exclusion errors were particularly severe in some programmes. In the Widow Allowance scheme, for instance, the exclusion error reached 85%, meaning a large proportion of eligible people were left out.

At the same time, the high inclusion error means public resources are reaching many people who are not poor or vulnerable. The report identified this as a major source of misallocation and potential "elite capture" of social protection resources.

Fragmented safety net system

Bangladesh's safety net system is also highly fragmented, with core funding spread across 95 overlapping programmes.

The smallest 50 programmes account for only 2.3% of total funding, raising concerns over administrative costs, duplication and weak coordination.

Experts say the fragmentation makes it more difficult to monitor programmes and assess their overall impact.

The report also identified a significant gap in coverage for the urban poor. Of the 140 social safety net programmes currently operating, only 23 are specifically designed for urban populations, accounting for just 4% of total spending.

This leaves many urban poor, particularly those dependent on informal employment and facing rising living costs, with limited access to social protection.

New five-year strategy

The findings come as Bangladesh rolls out a new five-year strategic framework for 2026–2031, aligned with Sustainable Development Goals 1 and 10, which focus on ending poverty and reducing inequality.

Officials said the strategy will prioritise improving beneficiary targeting, reducing leakage through digital registries and consolidating overlapping programmes.

The framework also aims to expand coverage for underserved groups, particularly poor households in urban areas.

The need for reform has become more urgent as poverty has risen following recent economic shocks.

According to the report, moderate poverty fell to 18.7% in 2022 and extreme poverty to 5.6%, but the rates are estimated to have increased to 27.93% and 9.35%, respectively, by 2025.

With poverty and inequality rising, the GED assessment said strengthening the social protection system will be critical to ensuring more inclusive growth and protecting vulnerable populations.