Neoliberalism, Poverty and Social Protection Policies

[Dhaka, 5 July 2009] Speakers in a seminar spoke about how neoliberal policy doctrines have failed to reduce poverty or ensure social protection for the poor. Neoliberalism has not only had devastating consequences in developing countries like Bangladesh, it has also shaken the northern economy.

The seminar titled `Neoliberalism, Poverty and Social Protection Policies’ was held in the city’s national press club today. It was organized by VOICE, a research and public education organization and moderated by its executive director Ahmed Swapan Mahmud. The panel included Monower Mustafa, a researcher and development activist; Mohsin Ali, Coordinator of Governance Advocacy Forum; and Saiful Haq, Genral Secretary of Biplobi Workers Party. Ahmed Swapan Mahmud also presented Voice’s keynote paper at the seminar.

 “Neoliberal policies have been proved ineffective and have failed to offer any better solution for society.” said Ahmed Swapan Mahmud. “Rather, they create marginalization, deprivation, economic injustice, insecurity and poverty at large.” Mentioning existing Social Safety Net Programms (SSNPs) he told the seminar that these ad-hoc measures are merely neoliberal tools, while the programmes do not play any real role reducing poverty.

Ahmed Swapan also said that due to neoliberal market policy a great human catastrophy has been created: a trinity crisis—financial crisis, food crisis, and climate crisis. “More than 25 lacs households have fallen into poverty, while there has been a 36.7 percent income decrease in the last two years due to these crises” he mentioned.

Ahmed Swapan urged the government to formulate a comprehensive social protection policy, avoiding the prescriptions of international financial institutions like World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB).

Though the allocation for SSNPs has been gradually increasing over recent years, its share in total public expenditure had been on the wane between since 1998, only beginning to recover by the year 2007. On average, during 1996-97 to 2004-05 period, the share of expenditure on SSNPs was 0.8 percent of the Gross Domestic Product (GDP) and 5.7 percent of the total public expenditure (World Bank, 2006). However, during FY2007, FY2008, FY2009, higher allocations were made for SSNPs. In FY2007, total allocation for safety net programs was 9.3 percent of the budget and 1.4 percent of the GDP, which increased to 13.32 percent of the revised budget of FY08 and 1.8 percent of total GDP. In the government's 2009-10 budget, new funding was allocated towards social safety net spending, bringing spending up to 15.2 per cent of total non-development and development budget or nearly 2.5 per cent of Bangladesh’s GDP.  

Panelist Monower Mustafa also criticized the market led, neoliberal development process, which has failed to uphold any vision for the society. He said that in Bangladesh 40 per cent of people are poor and 25 per cent fall into the category of hardcore poor— those earning less than taka 16-22.  He said that the growth led development model has utterly failed to reduce poverty; instead the persistence of disparity is eating up the prospect of both economic growth and stability.

Labeling social safety nets a neoliberal package, he said that as long as the country’s economy is shaped by privatization, deregulation, and trade liberalization any significant change will be impossible. He emphasized that to redefine the policies of the country and realize the needs and demands of its people, the active participation of all concerned stakeholders is necessary. He further underlined the need to formulate social protection measures with a long-term vision to protect everyone from all unfair and unjust conditions in life.

Panelist Mohsin Ali, said that social safety net programmes have failed to reduce poverty. Though the allocation is increasing for the safety nets, it can only create 5 days of work per person in a year. Furthermore, while a person gets 420 taka in a year under safety nets, this sum is quite insignificant.  He told the seminar that there is lack of coordination among government departments, as well as corruption and political biases.  And the local government institutions responsible for implementation at the grassroots level can do nothing effectively due to centralized policies. He emphasized the need to build a collective social movement to challeng the mainstream discourse.

Panelist Saiful Haq, emphasized the need to reshape the country’s financial structure, while he also voiced opposition to neoliberal capitalistic imperialism as led by the US with the assistance of multinational companies and international financial institutions. He said that market led development can never bring any good to people, rather it has pushed the country to shut down mills and industries and forced people unemployment and insecurity. He urged the formulation of independent policy that can protect human rights and ensure justice and equity.

Among others to speak at the seminar were: Uma Chowdhury, director Supro; Tanvir Siddiqui, director of Changemakers; Aminur Rasul, director of Unnayan Dhara Trust; Nuan Ahmed, director of IED. The seminar was also attended by  human rights groups, NGOs, civil society activists, trade unions, women groups, journalists, and political activists.