Social Cash Transfers - An effective and feasible instrument for poverty alleviation. Experiences from German Development Cooperation. International Council on Social Welfare 33rd Global Conference Tours, June 30 – July 4, 2008 Symposium: Poverty Reduction and Minimum Income Policies: Results and Limits Dr Matthias Rompel Team Leader, Sector Initiative Systems of Social Protection German Technical Cooperation (GTZ)
GTZ in a nutshell • German Technical Cooperation (GTZ): • Implementing agency of the German Federal Government for Technical Assistance in International Cooperation • Organised as a government-owned corporation • 2.200 projects in 130 countries worldwide - 11.500 staff • Core Competence: Capacity Development • Building and developing the capacities of people, organisations and societies. • Objective: Partners are able to make effective and efficient use of resources in order to achieve their own goals on a sustainable basis. • GTZ operations in the area of social protection • work on social protection in some 50 TA programmes / projects in about 30 countries worldwide
Households and individuals face various risks that can force them into poverty (illness, accident, death, unemployment, old age, maternity etc). More than half of all people worldwide are uninsured against risks of this nature. Insufficient social protection can have a disastrous effect and impoverish people - or drive them deeper into poverty. Social security aims at protecting households and individuals against social risks and shocks to their livelihoods. What is Social Protection?
Aims at those groups of the population who, for reasons beyond their control, are not able to provide for themselves Residual protection of the poorest households Basic Social Protection
Basic Social Protection– Program Types Basic Social Protection Social Cash Transfers In-kind Transfers Unconditional Cash Transfer Food aid Non-contributory Pensions, Disability Grants, Child Benefits Waiver-systems for Health Services Conditional Cash Transfers (tied to school attendance etc) Education vouchers Cash for Work Food for Work
Regular and predictable grants that are provided to vulnerable households or individuals Long term objective: lifting households over poverty-line STCs as investment in human resources Twinned goal: long term investment dimension and short term assistance: turning from mitigation to prevention Design option: universal vs. targeted Social cash transfers (currently being piloted in Zambia, Mozambique, Ethiopia, South Africa, Kenya) Social pensions (eg. South Africa, Lesotho, Namibia, Botswana, Bangladesh, Brazil, Nepal) Child benefits (eg. South Africa) Conditional cash transfers (Brazil, Mexico, Bangladesh) Disability allowances (eg. Namibia) Social Cash Transfers (STC)
Affordability Universal pension schemes in Botswana, Brazil, Lesotho, Mauritius, Namibia, Nepal, and South Africa, cost between 0.2 and 2% of GDP (e.g. universal pension in Namibia for over 65 aged costs 0.7% GDP) Efficiency SCTs reduce extreme poverty effectively, e.g. in South Africa, the non-contributory pension reduced old-age-related poverty by 94% and poverty in the population as a whole by 12.5% (evidence). Evidence
SCTs are enabling people to access basic social services Hence they are strengthening demand; Even greater in the case of CCTs: Conditional transfers bundle health, nutritional and educational interventions and create a strong demand to use services to invest in human capital, e.g. El Salvador: 42% increase of health service utilization for children <5 years of age 12% reduction in ill-health among under-5s in Mexico; 19% among adults Nicaragua: immunization levels among children aged 12-23 months increased 18% Challenge: Balance of demand- and supply-side (!!) Impacts
Impacts Consumption & Investments SCTS Zambia: • More households both consumed and invested more. The number of beneficiary households making investments quadrupled from roughly 14% to 50% and the average amount invested doubled. • 7 times as many households owned goats and the ownership for chickens increased by 15%.
Capacity development Political economy Integration in comprehensive social protection policy & strategy Institutional set-up / design / coordination Challenges 1/2
Including Civil Society Costing / Fiscal Space / Sustainability Graduation Targeting Challenges 2/2
Social transfers as effective tool for poverty alleviation but not a panacea will complement (and have to be complemented by) other social security and social policy interventions Essential challenges in building social transfer schemes Capacity development Political will Conclusion
For more information: www.gtz.de/social-protection-systems www.socialcashtransfers-zambia.org Matthias.Rompel@gtz.de Thanks for your attention!