The International Monetary Fund (IMF) has recommended that Bangladesh adopt international best practices to manage its social security programs and eliminate any leakages. Furthermore, the IMF has advised the relevant authorities to prevent the political use of these programs.

This directive was given during a meeting between the IMF Extended Credit Facility’s second review team and officials involved with the social security program at the Ministry of Finance on Thursday.

According to sources at the meeting, there have been allegations that various candidates from the Awami League forcibly took social security program cards or National ID cards from people to coerce them to vote in the one-sided national parliamentary elections held in January. Moreover, there have been ongoing accusations over the past few years of nepotism and misuse of these program cards at the Upazila level by Awami League activists.

The IMF team is currently evaluating the state of the country’s social security safety net, and questioned whether the budget allocation for this sector will be increased in the upcoming fiscal year. They stressed the importance of addressing these program leakages and adopting the best international practices.

Furthermore, the Ministry of Finance has been criticized for overstating the budget allocation in areas such as pensions—which are considered a right of government employees—while most beneficiaries of savings certificates are wealthy individuals. It's noted that this misleading accounting has been shown in the social security net budget for nearly twenty years.

It was also mentioned that, instead of traditional methods, digital means should be used to implement the social security programs. A circular issued at the beginning of this month by the ministry mandated that all payments under the social security program must be made using the beneficiaries' National Identity Cards through registered mobile financial services (MFS) by June 30, 2025. The IMF team emphasized the quick implementation of social security programs using MFS, urging various ministries to modernize these operations accordingly.

Although many program benefits are currently delivered through MFS, registration using the beneficiary’s National Identity card is often not enforced, leading to misuse of funds. If a beneficiary’s fingerprint cannot be taken or if they do not possess a National Identity card, these rules may be relaxed. Thus, the IMF has recommended strengthening the Ministry of Social Welfare and suggested the government create an independent office to implement these programs.

Moreover, in light of escalating inflation, the government plans to increase the number of beneficiaries under the social security program by more than four hundred thousand in the 2024-25 fiscal year.

In a recent Cabinet Committee meeting on social security programs, it was decided to include new beneficiaries, although most project allowances remain unchanged.

The Ministry of Finance has also issued two circulars this month to incorporate all social security activities under a new framework to reduce misuse and corruption. This reformation is aimed at increasing benefits for the elderly, widows, and impoverished women, although due to funding limitations, increases in allowances have been restricted. Currently, 58,001 elderly citizens receive a monthly pension of 600 taka, and this number is expected to increase by two hundred thousand by 2024-25. The government has allocated 4,205 crore taka for the "Elderly Allowance" program this fiscal year, benefitting men over 65 and women over 62 with an average annual income of less than 10,000 taka.

This restructuring also aims to extend benefits under other programs. For instance, the allowance for mother and child support has been increased from 800 to 1,000 taka, and elderly citizens over 80 will receive a monthly pension of 900 taka starting from 2024-25, up from the current 600 taka.