Do cash transfers help the poor? Word is out it does

Updated September 10, 2019

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Increasingly, today social protection is considered among the most effective tools to combat poverty. — AFP/File
Increasingly, today social protection is considered among the most effective tools to combat poverty. — AFP/File

IT may not end poverty, it is not even meant to end poverty; it may not even be sufficient to provide two square meals for a family riddled with poverty. And yet, increasingly, today social protection is considered among the most effective tools to combat poverty.

Social protection, as defined by Benazir Income Support Programme (BISP) Secretary Ali Raza Bhutta, is an intervention by the government to ensure a minimum “stable living standard” for the marginalised, which is also the latter’s right.

He was among the participants and speakers at a week-long event, the Social Protection Week 2019: Securing the Future of the Region, organised by the Asian Development Bank (ADB) at its headquarters in Manila, Philippines, along with 15 partner organisations, including the World Bank, UNESCAP, UNICEF, UNAIDS, among others.

Attended by over 300 participants from governments, NGOs, development agencies and the academia, the aim of the event is to share plans of reducing poverty, inequality and vulnerability among the region’s poor, what worked for some, what did not, the mammoth governance challenges that come their way while executing their social protection programmes and what they can learn from each other to implement and monitor better.

Bambang Susantono, the vice president for ADB’s Knowledge Manag­ement and Sustainable Development programme, giving an overview in his keynote address said while “tremendous economic and social progress” had been made in reducing poverty, 300 million people continue to live in extreme poverty and over 830 million live between $1.90 and $3.20 a day and “inequalities within and across countries remain high”.

“More needs to be done to help break inter-generational cycles of poverty, enhance growth through investment in human capital, increase productivity, and reduce vulnerability to risks,” said Mr Susantono.

Philippines chief economist Ernesto M. Pernia, and secretary of socioeconomic planning, shared Pantawid Pamilyang Pilipino Program (4Ps) or conditional cash transfers, one that puts a lot of emphasis in the health and education of the poor households, in particular of children up to 18 years. The biggest challenge is updating the list to who and where the poor of the country are.

A similar concern was cited by Bhutta. BISP, too, needed a more robust database, a water tight payment system, grievance redressal and to plug leakages. And the only efficient way to do all of it is using technology.

Giving an overview of the programme which has 5.2 million families below the government’s poverty score (with detailed 23 variables to count from) ensuring the list is updated is an gargantuan task for BISP, now well in its eleventh year.

Mr Bhutta also informed the gathering that the government has taken up conditional transfers more rigorously. “We noticed that when conditions, like making it mandatory for parents to send kids to school, were put to cash transfers, it increased enrollment; 13pc for boys and 15pc for girls,” he said. He also said their evaluation showed enrolment rates in BISP households were significantly higher (81pc) in districts with conditional transfers compared to districts without this condition (60pc).

Speaking to Dawn on the sidelines of the event, Mr Bhutta added: “The assistance essentially consists of a stipend of Rs5,000 per quarter per family paid exclusively to women.

“And while it may not even be sufficient, for even one meal a day for the family, with atta at Rs20/kg, you will be surprised how this hand holding helps bide them through very rough times. It may not help them graduate and exit from the programme but it does provide a basic income that allows them to maintain part of the basic food needs.”

Mr Bhutta admitted that large-scale cash transfers may be unaffordable and financially unsustainable for governments, but the way out would be to “improve government’s revenue generation through taxes so that resources can be provided continuously”.

The programme is financed by the federal government, with development partners like the ADB, WB and UK’s DFID.

Published in Dawn, September 10th, 2019