Bangladesh is currently enjoying the benefit of demographic dividend, which is accelerating the achievement of developed nation vision by 2041.
By the time the country will achieve this status based on the enumerated resources generated and contributed by the demographic dividend, they will turn into an aging population with the increased requirement of necessary social safety net facilities including healthcare.
The life expectancy of Bangladeshi people is 73 years, which is expected to increase to 80 years in 2050, and 85 in 2075.
Increased life expectancy will expedite aging people and the dependency rate. It is calculated that the current dependency rate of 7.7% will increase in the future at a faster speed with the development progress.
Almost one-fourth (24%) in 2050 and almost half (48%) of the total people will be dependent that will hugely impact the society and economy.
With the increasing need for support to the aging people, the Bangladesh government is going to initiate a futuristic scheme namely ‘universal pension scheme (UPS)’ for above 60 years of age to start from the fiscal year.
The scheme is designed to benefit marginalized people. This is not applicable for public employees and staff of autonomous organizations as they enjoy such benefits from the government. Remittance senders can also enjoy the scheme.
Eligible beneficiaries are huge in number and so diverse that cannot be easily materialized. The present constraints of providing pension benefits for numerous government-support organizations such as teachers of various categories can create obstacles.
The minimum age is 18 to be included in this scheme and a minimum of 10 years is required to deposit a monthly subscription.
If a person of 18 years deposits 1000 taka per month until 50 years of his/her age, s/he will be entitled to get a maximum of 60000 takas per month from the 60 years of age and until one’s death.
It is calculated that one needs to deposit a total of 500000 takas in 32 years to get the maximum benefit of monthly 60000 takas.
This is a primary instruction and will be detailed once it is finalized in the next financial year. This question is how this program will be financed. Government has plans that include the investment of the pension fund in treasury bills, bonds and infrastructural development projects to grow money on 10 percent interest.
Targeting the aging people and undertaking initiatives for the vulnerable group shows the sign of sustainable social development and a better future.
Numerous advantages are significantly noticeable because of the immediate impact and long-term positive benefits for society. From the individual viewpoint, the scheme will bring the confidence of individuals of this group and a sense of inclusion to the society and state as well.
The entitled group belongs to the age group who are physically vulnerable and stayed home most of the time. Because of a prolonged stay at home and the free time and business of other family members, they suffer from social and personal alienation.
The UPS will boast them up mentally and increase their purchasing capacity to buy services from other people from the society.
As the country envisions becoming a developed nation and building an exploitation-free and peaceful country, this program is a notion of a welfare state.
This plan strengthens social bonding and clearly bridges the historical past and glorious future. Bangladesh has won the impendence with a target to build a nation without exploitation and discrepancy.
Since the scheme provides financial support to the fraternity at the time when they need it most and are incapable of contributing to the economic activities.
Moreover, the scheme is a contributory program that will create ownership and self-dignity because of their own financial contribution.
The scheme is designed to cover a significant section of the total population that will help achieve goals of sustainable development goals, goal-1 (no poverty) and goal-2 (zero hunger) in particular.
It is remarked that the UPS would be the key strategy to achieve the ‘leave no one behind’ philosophy of agenda 2030.
Economists and social scientists termed the UPS as the vital step to reducing income inequality, which is unacceptably high despite numerous activities during the last 12-13 years.
A pension scheme along with other social safety net programs is assumed to build an inclusive society to benefit for a long-term period.
As Bangladesh has a limited opportunity in public sector employment, people mostly engaged in the informal sector will be highly benefitted from the program meaning that entre employment sector would be stronger. Moreover, running after only public jobs will be lessened.
The announcement of the UPS is an issue of bringing happiness among the expected group. It is seen as a timely, commendable and brave initiative as it is announced in spite of Covid-afflicted uncertainties in the global and domestic economic realities.
Bangladesh’s biggest employment sector comprises the informal and private sectors. There is a possibility of inclusion in this scheme of a particular section who can manage savings after maintaining their living cost. It indicates that impecunious people may be excluded unintentionally but dominantly.
Necessary research should be conducted before finalizing the scheme. Special preference should also be given to women, rural poor in particular, as they are more vulnerable.
Employees of the private sector particularly from low-income earners may also want to be included in this bracket. If they are allowed, the coverage may be unexpectedly bigger and may highly be affected by implementation problems.
Eligible beneficiaries are huge in number and so diverse that cannot be easily materialized. The present constraints of providing pension benefits for numerous government-support organizations such as teachers of various categories can create obstacles.
The UPS shows the government’s foresightedness. However, the proper strategic inclusive plan must be materialized so that nobody is excluded and the benefits permeate beyond the expectation.
Experiences of implementation of social safety net programs can be quite helpful in this regard. Moreover, the styles and strategies of such programs of a developed nation can likewise be examined to make UPS more effective.
For bringing the sustainability of this program, views from experts and multiple stakeholders including beneficiaries and implementers are imperatives.
Necessary research should be conducted before finalizing the scheme. Special preference should also be given to women, rural poor in particular, as they are more vulnerable.
If this scheme is successfully administered, Bangladesh can be the role model for development not only for economic growth but also for building a sustainable and inclusive society.
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