Social Security Policy Support (SSPS) Programme

An initiative of the Cabinet Division and the General Economics Division (GED), Bangladesh Planning Commission, Government of Bangladesh
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Reviewing the National Social Insurance Scheme (NSIS) Framework and towards a Feasible Model for Bangladesh

Despite impressive achievement in different socio-economic indicators in the past decades, Bangladesh is confronting some perennial and looming labour market challenges. Some of those challenges include low and stagnant female labour force participation, very high and persistent youth unemployment and underemployment, extreme reliance on the informal sectors for employment, virtually non-existent unemployment protection measures for the working-age population etc. Presence of such challenges might thwart the future course of action in realising the long-term development goals. For instance, Bangladesh aspires to become a middle-income country by 2031 and a developed country by 2041. Moreover, the country is set to graduate out from the LDC country group by 2026. Therefore, tackling the labour market issues is extremely important for achieving the pre-set development milestones within the stipulated timeframe.

Recognising the importance of the stated issues, the government of Bangladesh has made a determined effort to strengthen and realign the social protection system and adopted the National Social Security Strategy (NSSS) in 2015. The NSSS—by utilising a lifecycle approach—duly acknowledges the vulnerabilities of the working-age population and recommends introducing a National Social Insurance Scheme (NSIS) for them. [1][2] In the aftermath of the COVID-19, which caused massive job losses at least temporarily, the need for operationalising the NSIS has become more prominent than ever.

However, the targets for making progress on the NSIS enshrined in both the NSSS 2015 and NSSS Action Plan Phase I (2016–2021) have fallen far short of anticipation. As per the Midterm Progress Review on Implementation of NSSS, the NSIS was supposed to be rolled out nationwide by January 2021 (Cabinet Division and GED, 2019). As against this, only a draft framework study, commissioned by the Cabinet Division and the General Economic Division of the Planning Commission, under the supervision of the Social Security Policy Support (SSPS) Programme, has been prepared. Till now, this is the only available framework offering a variety of modalities for introducing an NSIS. Given its importance, the (draft) NSSS Action Plan Phase II (2021–2026) has placed a special emphasis on the social insurance front. As per the new Action Plan, the new/revised framework for NSIS is expected to be completed by June 2022, while one branch of the NSIS – unemployment insurance scheme is supposed to be ready for piloting by July 2024 and rolled out nationally by July 2025. Before making further progress, the NSIS requires a careful review. This is largely due to the fact that the proposed framework is subject to criticism about falling short of International Social Security Standards.

Against this backdrop, the objectives of the study are:

  • To shed light on the key concepts, definitions and characteristics of social insurance and its branches following the international social security standards and best practices
  • To identify the key preconditions, stakeholders, and their responsibilities
  • To review the existing National Social Insurance Scheme (NSIS) framework comparing with international social security standards and the best practices followed in other countries implementing different branches of social insurance. This review assesses the necessary preconditions, legal framework, and institutional capacities to introduce the NSIS.
  • To identify the gaps in the proposed framework based on the current study’s review
  • To develop pathways towards a feasible NSIS model for Bangladesh
  • To estimate costs for rolling out an ideal NSIS in Bangladesh
  • To make potential ideas for piloting unemployment insurance and micro-health insurance
  • To highlight some policy recommendations to make full-fledged NSIS as a reality 

This study is organised as follows: after this introduction, Section II of this paper highlights the fundamental concepts and characteristics of social insurance following the international social security standards and best practices adopted by different countries; Section III provides a critical review of the currently available NSIS framework; Section IV presents a feasible NSIS framework for Bangladesh; finally, Section V concludes with some of the pragmatic policy recommendations.

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