Pakistan Institute of Development Economics


Our safety nets

Publication Year : 2018
Author: Nasir Iqbal
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Our safety netsPoverty is a multifaceted phenomenon in Pakistan. According to the Economic Survey of Pakistan 2017-18, one-fourth of the population (over 50 million people) lives below the poverty line while 38.8 percent are multidimensionally poor in terms of education, health and living standards. Apart from having limited access to education, health and other socioeconomic services, the deprived families often have limited financial resources to use these services. A majority of them live in rural areas and are employed in the agricultural sector.Ending poverty in all forms and dimensions by 2030 is the first goal of the UN’s sustainable development goals (SDGs). To achieve this goal, the implementation of a nationally-adequate social protection system is the key proposed intervention (target 1.3 of goal one of the SDG). Such systems have been used by various countries to eradicate poverty and increase the welfare status of households.Social safety nets (SSNs), an important component of social protection, have emerged as an important policy option to reduce poverty. Over the last two decades, the number of developing countries with SSNs have increased from 72 to 149. Cash transfers (CT) programmes – unconditional cash transfers (UCT) and conditional cash transfers (CCT) – are the main instruments of SSNs for social protection. Global empirical evidence has also supported the significant contribution of CT programmes in addressing poverty; removing barriers to education; improving health and nutrition outcomes; promoting savings/investments and production; creating jobs; and ensuring social and economic empowerment of women. In its effort to recognise the significant contribution of SSNs to protect the vulnerable and poor, the government of Pakistan has launched several SSNs programmes over the years. The Benazir Income Support Programme (BISP) is one of them.Election 2018 created new hope for prosperity, especially for the deprived sections of society. The PTI’s election manifesto provides the blueprints of a new social protection paradigm to address deprivation. The PTI proposes to expand social health insurance coverage to the poorest families across Pakistan, launch special assistance programmes for differently-abled persons, and enhance BISP as the primary SSN for the poor. As envisioned by the PTI, BISP’s role is critical to achieve various SDGs goals, especially those related to poverty, hunger mitigation and gender equality. The success of any SSN programme depends on targeting methods, enrolment procedures, payment disbursement mechanisms, and financial stability. Objective targeting, transparent enrollment, efficient and low-cost service delivery, and long-term financial sustainability are the prerequisites to achieve poverty alleviation and social development.BISP has seen ten years of success and learning. It has established an efficient and transparent payment delivery system – especially the recently introduced Biometric Verification System (BVS) – and demonstrated its ability to function as a technology-based and well-administered programme. The National Socio-Economic Registry (NSER) of over 27 million households enables BISP to identify target groups using scientific methods. On this basis, BISP’s targeting performance is among the top five SSN initiatives in the world. The unique features of BISP – its cash-delivery mechanism, use of advance technology, and role as the custodian of NSER – allow it to take on a much larger role as a platform for social protection in Pakistan. Based on its rich experience over the past 10 years, some reforms in social safety nets programmes are required to achieve the desired goals more efficiently.First, graduation programmes, alongside CT programmes, should be introduced to pull the ultra-poor out of the vicious cycle of poverty. Global experience suggests that CT programmes have been more successful when there is additional livelihood support for the poor in the form of complementary programmes. Graduation models have been adopted in almost all developing and developed countries with various levels of success. These initiatives provide an opportunity for beneficiaries to move beyond financial dependency and embrace more sustainable livelihood.Second, financial stability is the key to deliver planned activities under any SSN. Governments often face hard choices about the type, affordability, and sustainability of social protection initiatives. At this stage, more than 90 percent budget of BISP is allocated by the government of Pakistan. To ensure financial stability, there is a need to engage the international community and local philanthropists through creating an endowment fund. BISP has already initiated the process to establish the BISP Endowment Fund. This should be formalised on a priority basis.Third, after the 18th Amendment, there is a disconnect in the design of social safety nets and some provincial governments have established their own social protection systems. The lack of coordination among federal and provincial programmes can lead to an inefficient allocation of resources. Forums like the Council of Common Interests and Ministry of Inter-Provincial Coordination need to create synergies between federal and provinces governments for the efficient allocation of resources. BISP could lead this process and engage representatives from all provinces to design an effective scheme with shared responsibilities. It can avoid duplication by using a single registry (the NSER) to identify beneficiary households. The NSER data should be used for all programmes as laid down in the National Social Protection Policy Framework approved in 2016. The formation of new governments at federal and provincial levels provides a unique opportunity to establish such forums and design reformed social safety nets.Fourth, BISP should be tasked to design a social protection policy framework. For this, BISP should establish a forum comprising policymakers, national and international experts, and representatives from provincial governments. Fifth, the NSER should be updated periodically to cater to demographic changes and the impact of catastrophic events on welfare status of households. It is an internationally-accepted phenomenon that socioeconomic conditions and the demographic composition of the population change considerably over a five-year period.Therefore, it is important for BISP management to complete NSER update on a priority basis to ensure accurate targeting. This will make Pakistan the only country that has ever carried out a socioeconomic survey of its entire population twice within five years. The proposed reforms will institutionalise social safety nets in Pakistan. The institutionalisation process will ensure the efficient allocation of scarce resources and maximise the intended benefits of poverty reduction, human capital development, and women’s empowerment.