Conditional Cash Transfers buffer shock in Asia

Dec 11, 2009

International experts explore relevance of conditional cash transfers in India at UNDP meeting
New Delhi -  Conditional Cash Transfers must be part of national development strategies, especially  to cushion the impact of the financial crisis on the urban poor.  However, these instruments are not a silver bullet for alleviating poverty, said international experts at a meeting organized by the United Nations Development Programme.
At the two-day international conference on ‘Addressing Urban Poverty: Relevance of Conditional Cash Transfers (CCTs)’ in New Delhi experts pointed out that in most Asian countries there are few social protection measures in place to act as safety nets in times of crisis.
“Over the past decade, the policies adopted by various countries in Latin America, of transferring cash directly to poor families, with conditions relating to development outcomes -- say school attendance or getting children vaccinated -- have opened a policy window to strengthen the development of human capital and to escape the poverty trap. Conditional cash transfer schemes can serve not only as welfare measures to protect human development but also countercyclical buffers in periods of macroeconomic downswing,” said Mr. Ajay Chhibber, UN Assistant Secretary General and UNDP Director for Asia and the Pacific.
Several Latin America countries introduced Conditional Cash Transfers over a decade ago following the mid 1990s debt crisis. Drawing on lessons learnt from their experiences development practitioners from Brazil, Columbia, Mexico and Nicaragua said that instruments like  Conditional Cash Transfers not only helped tide over the crisis but  also helped create social capital by making cash transfers conditional on girls education or women’s healthcare.
Participants from the Philippines, Indonesia, Bangladesh and Turkey also shared their experiences with similar models that have been adapted to suit their needs.

Mr. Arun Maira, Member, Planning Commission, Government of India said: “The measures we employ need to be created by involving the local community themselves… Optimal utilization of resources has to be made to ensure better reach of these instruments to the poor” he added.
In South Asia alone it is estimated 30 million more people will be pushed into poverty because of the global financial meltdown. Coming on the heels of the food and fuel crisis that saw prices of major staples like rice and wheat rise dramatically real incomes of poor households decreased on an average across Asia by 24 percent pushing many households into poverty.
While India has weathered the financial crisis better than many and the rural poor escaped much of the immediate impact of the economic downturn with the National Employment Guarantee Programme acting as a safety net. However, according to rapid surveys done by the United Nations Development Programme several sectors like construction, garments and gems have been severely affected and several jobs have been lost or wages reduced of countless others as they have moved from full time to part-time jobs. For the urban poor there are few social protection schemes in place.
The conference was part of the United Nations Development Programme’s (UNDP) endeavour to share information and experiences from within the country and from other parts of the world and provide a platform for further dialogue. The discussion focused on challenges associated with CCTs such as targeting, monitoring, financing and institutional coordination. The UNDP in India is also bringing out a series of discussion papers on a range of development issues in India.
Speaking about the conference Mr. Patrice Coeur-Bizot, UN Resident Coordinator and UNDP Resident Representative, said, “Our objective was to promote informed discussion among various stakeholders on the desirability and feasibility of introducing multi-sectoral measures for alleviating human poverty and achieving the Millennium Development Goals in India.”
The core concept of conditional cash transfers originated when the demand from poorer households for social services like education and health was perceived to have declined drastically during periods of financial crises. Such schemes aim at reducing extreme poverty in the short-run while protecting the formation of human capabilities in the long run. They provide cash directly to poor households in response to the household/ individual fulfilling specific conditions such as minimum attendance of children in schools, and/or attendance at health clinics, participation in immunization and the like.

About Conditional Cash Transfers (CCTs): Conditional Cash Transfer Programmes (CCTs) originated from Latin America. They have been considered one of the best innovations in the area of social protection programmes. More recently, they have also attracted some attention in Asia and Africa. But what is really innovative about CCTs?  How do they differ of other types of cash transfers? CCT programmes are characterized by:  i) the use of targeting mechanisms to select beneficiaries; ii) the requirement that beneficiaries take some actions (e.g. school attendance, health check-ups) in order to receive the transfer, namely, co-responsibilities or conditionalities); and 3) the regular payment of cash benefits.
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