A policy dialogue held in Dhaka on 10 June called for urgent revenue reform and structural changes as preconditions for Bangladesh's transition toward a welfare state. The event, titled "The New Government's First Budget Toward a Welfare State: What Role for Social Protection?", was organised by Voice for Reform and brought together economists, policymakers, and civil society representatives to assess the country's fiscal readiness, inequality landscape, and social protection frameworks.
Md. Rubaiyath Sarwar, Managing Director of Innovision Consulting, presented the keynote paper at the dialogue. Highlighting what he described as a welfare state paradox, he pointed to a Gini coefficient of 0.499, 73% out-of-pocket health costs, and a poverty rate of 22.9% set against a tax-to-GDP ratio of just 6.56%. He identified three key obstacles blocking progress: fiscal anaemia, private sector crowding-out, and governance failure marked by 67% exclusion errors and 40% leakage in existing programmes.
He proposed a four-step approach to navigate these challenges: revenue reform to broaden the tax base, rationalisation of existing social safety nets, targeted expansion of coverage to vulnerable populations, and the gradual universalisation of services as fiscal capacity grows. He also called for leveraging institutions such as BRAC and NGOs for last-mile delivery. "The answer is not to abandon welfare ambition. It is to sequence it correctly," he said, cautioning that universal coverage without the revenue base to support it would build a trap, not a safety net.
Dr. Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), attended as chief guest. She said investment in human capital (education, healthcare, and skills development) must form the foundation of any welfare state. She warned that poverty reduction gains remain fragile and vulnerable to economic shocks, and that Bangladesh does not currently have the fiscal capacity for large-scale welfare expansion. She called for stronger institutional systems and greater use of digital technology to reduce duplication of benefits and ensure support reaches marginalised communities. Drawing on the experiences of Greece and Venezuela, she also cautioned against the risks of growing debt and over-reliance on single sectors.
Other speakers, including RAPID Chairman Dr. Mohammad Razzaque and Dr. Sharif Ahmed Chowdhury, former Director General of Palli Karma-Sahayak Foundation (PKSF), echoed the call for macroeconomic stability and export diversification as prerequisites for meaningful welfare expansion.
Watch the full discussion:
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