An elderly man wears a protective face mask while walking on the street as it rains in Dhaka, Bangladesh, 26 April 2020. EFE-EPA/FILE/MONIRUL ALAM

Bangladesh launches pension security plan as general elections draw closer

Dhaka, Aug 17 (EFE). Bangladesh launched a welfare scheme Thursday that offers a financial safety net to its citizens based on monthly contributions until the age of 60.

As the country approaches general elections due later this, experts criticized the alleged hasty implementation of the scheme that has sparked both praise and skepticism.

Prime Minister Sheikh Hasina unveiled the scheme designed to extend pension benefits beyond employees of government, semi-government or autonomous organizations.

The scheme expands the social safety net for private sector workers, self-employed people, low-income earners, and expatriate Bangladeshis.

The program guarantees a pension to participants once they reach the age of 60.

Enrollment is open to individuals aged 18 to 50, with the monthly pension payout at 60 determined by the cumulative deposits made over the years, ranging from taka 1,530 ($14) to taka 344,655 ($3,150).

The government’s contribution will offer added support to low-income groups.

In the event of a contributor’s passing, the nominee will receive a monthly pension until the age of 75.

The move drew mixed reactions from economists, who acknowledged the scheme’s potential to alleviate poverty but cautioned against a rushed implementation without adequate groundwork.

“Our existing social safety programs are inefficient,” Ahsan H Mansur, executive director of the independent think-tank Policy Research Institute, told EFE.

“But it seems the government moved too fast with too little work, without much preparation,” he said, lauding the long-term prospects.

Mansur said the government has not specified where it would invest the fund and how it would get the return. “There is no fund management plan.”

Rashed Al Mahmud Titumir, an economics professor at the University of Dhaka, said a pension scheme without a management plan “will rather create problems.”

“The money has to be reinvested, and the investment has to be secure,” he said.

Golam Mostafa, acting member secretary of the pension scheme authority, said that the government would soon unveil a management plan for the pension fund.

“The Bangladesh government is the guarantor of the pensioners’ money,” he said.

Amid fears of the government using the pension fund to tackle the ongoing economic crisis, Mostafa said there would be no scope for fund diversion. EFE