A good but ambitious project

The government is reportedly set to launch a universal pension scheme in which any citizen, including expatriate Bangladeshis, aged between 18 and 50, can sign up for the programme. We understand this was a pledge of the ruling party during the 2008 general elections. Reportedly, the World Bank provided technical assistance to design the initiative in light of the best practices from several countries, particularly India's experience in developing its national pension scheme. The government wants to start the project within six months to a year.

It has been revealed in an outline of the scheme that a beneficiary can start contributing to the scheme with a monthly instalment of Tk 1,000 from the age of 18, and can receive a monthly pension of Tk 64,776 after the age of 60. There will be a law to govern the whole process, the draft of which, we are told, will be prepared by soliciting opinions from all stakeholders.

From a social welfare point of view, all this sounds good as it reflects the desire of a large section of citizens worried about old-age economic uncertainty. If the scheme is designed and implemented properly, this would encourage common people, especially those outside the conventional banking system, to save money for the rainy days. All they would want is a guarantee of their money and assurance of receiving the monthly instalments in time without hassles. The stories of elderly pensioners facing obstacles in getting their honestly earned pensions are found abundantly in the media.

Our past experiences with large government welfare projects make us cautious in welcoming new ones with open arms, however. Such large undertakings need foolproof planning, meticulous implementation and cautious operation at the field level. Since huge sums of money will be involved at every stage, the supervising authority of the proposed pension scheme will have to ensure that there is no foul play at any level.

Experts are also sceptical about whether it would be possible to roll out the scheme in a year, since it took the government several years to even prepare this strategic paper or initial outline. While this is a good move considering Bangladesh's upcoming graduation from the LDC status, they believe it will be difficult to meet the deadline after formulating the required law, establishing a universal pension authority, and ensuring the inclusion of all beneficiaries before the scheme's take-off.

We also believe this to be a good and rather overdue initiative, but would urge the government to ensure that the opinions of experts and relevant stakeholders are properly reflected in the fully fledged scheme outline and the much-needed law for a smooth operation of this ambitious project.