AID POLICY: Cash catches up

NAIROBI, 6 December 2011 (IRIN)

 Photo: The Cash Learning Partnership
Smart cards...cash transfers are deemed more efficient and flexible than in-kind aid...

Cash and voucher transfers are becoming increasingly integrated into humanitarian relief efforts across the Horn of Africa, particularly in areas of protracted conflict and insecurity.
Restrictions on access in Somalia and in areas of northeast Kenya have led the humanitarian community to rethink traditional ways of delivering aid.
“We have to criticize our programming decisions and formulate better ways to get assistance to the people in need,” said Nick Maunder at a recent workshop in Nairobi, where the private sector, NGOs, UN agencies and donors met to debate, share experiences and develop ways to improve and increase the use of cash transfer programming during emergencies.
The World Food Programme (WFP) and several NGOs, notably Horn Relief and Oxfam, have scaled up their cash-based programming across the region this year. According to Horn Relief, US$81 million in cash and vouchers is going into Somalia, reaching more than 1.8 million people.
“This is the largest NGO cash response thus far on this scale, mainly because food aid is no longer an option in south-central Somalia,” said Degan Ali of NGO Horn Relief.
“Cash for assets has also started going to scale in Kenya, targeting just under half a million beneficiaries at KSh3,000 [$33] per household per month,” said Sheryl Harrison of WFP.
Most humanitarian assistance in the Horn of Africa has so far been provided in-kind, through the distribution of food, shelter, tools and seeds. In many areas, relief efforts have been beset by delays, high delivery costs, and in Al-Shabab-controlled areas, high taxation. There is a growing body of experience in the region that is using cash or vouchers as a critical complement, or at times an alternative to in-kind assistance.
“Cash is less visible, more dignified, uses fewer intermediaries, is in transit for less time and a more flexible resource to meet needs beyond food,” said Ali.
When food is available in local markets, or can be supplied quickly through market mechanisms, cash and voucher transfers are perceived to be the most efficient and cost-effective way of delivering humanitarian aid. Once the implementing agency has conducted an in-depth market assessment of the area, and the context is deemed suitable, money can transferred directly to beneficiaries, with or without conditions.
“The reason why there is so much momentum around cash is because the humanitarian world is starting to recognize that more and more people are living in a market economy, taking that into account and beginning to work in it rather than in isolation from it,” explained Breanna Ridsdel, communications and advocacy officer at the Cash Learning Partnership (CaLP), which organized the workshop.
Concerns have been raised about whether injecting cash can disrupt local economies and cause inflation but implementing agencies believe the amount of money being transferred to households is too small to have a detrimental impact on markets; according to a recent report by CaLP, the fear of inflation is disproportionately applied to cash rather than in-kind programmes, which can also have a massive influence on markets. Breanna Ridsdel of CaLP explains “Its all context specific, if you are looking at going into a very remote area and setting up a financial system, then that may not be the most appropriate intervention but if you are looking at a financially insecure community, living in urban area, in a developed financial system, then cash is likely to be more appropriate then food distribution which is working against the market... It’s all about good programming”.

Going private
The challenging environment in which relief agencies are operating in the Horn of Africa, characterized by insecurity and corruption, has led the aid community to create partnerships with the private sector and adopt new technologies to deliver cash safely to hard-to-reach areas.
Representatives from Visa, Equity Bank and Safaricom, a mobile phone operator, attended the workshop to lobby implementing agencies to use their products, saying it would be more efficient.

 Photo: Jaspreet Kindra/IRIN
...and help preserve the dignity of those caught up in emergencies

“Exciting new partnerships are being forged between the private sector and humanitarian community to improve the delivery of cash,” said Ginger Baker of Emerging Market Solutions at Visa.
Money is being transferred electronically through mobile-phone service providers, such as MPesa in Kenya, and through traditional remittance networks, such as Somalia’s Hawala system.
“When Al-Shabab closed telecommunications service in Somalia, we began to realize the value of Hawala, which became critical to our relief efforts,” said Ali.
“In Kenya, 21 percent of the population have bank accounts and 87 percent have mobile phones… MPesa can be used as a poverty eradication tool,” according to Safaricom.
With increasing scrutiny from the media, public, and donor governments over the cost-effectiveness of aid and at times, inefficiency of traditional distribution mechanisms, emerging partnerships between the banking and humanitarian sector are being welcomed. “Partnerships with the private sector will encourage more efficient and effective ways of delivering humanitarian assistance,” said head of International Federation of the Red Cross Regional Office, Alexander Matheou.
“The profit motive is not a bad thing. Safaricom and Visa may take a nominal fee for sending cash to impoverished households but at least it will be done quickly in a cost effective manner” said an independent aid consultant at the event.
Over the past few years, the private sector has played an important role in facilitating cash transfer programming yet the engagement of humanitarian actors still appears to be limited.

Some worry that the pursuit of profit sits uncomfortably with humanitarianism.
“The private sector are concerned with the rich, we are concerned with the poor… We need to be careful, but also respectful of each other’s motivations, and meet somewhere in between, ” said the chair of the CaLP steering committee, Austin Davis.
Another challenge is introducing electronic payments in low-income countries which need existing financial institutions and wide mobile-phone network coverage. Safaricom admitted that large parts of the Horn of Africa were still not covered and a proportion of vulnerable populations did not have access to mobile phones. However, according to a recent report on the impacts of mobile cash transfer programmes, the widespread growth of mobile-phone coverage, cheaper handsets and mobile-money services in developing countries suggests these constraints could be easily overcome.

Reservations and recent progress
“The momentum is building but any change happens slowly, any adoption of new techniques meets resistance at first, it has to go through the process of building evidence, proving itself, making mistakes, correcting itself and building systems; this is the biggest obstacle to adoption at scale,” explained Ridsdel.
According to the Oversees Development Institute’s (ODI) Good Practice Review for Cash Transfers in Emergencies, “Experience in very uncongenial environments such as Afghanistan, Somalia and the DRC shows that cash or vouchers are a possible response even where states have collapsed, conflict is ongoing and banking systems are weak or non-existent.”
One of the main challenges is a negative institutional mindset that can be overcome with an increase in such programming, according to advocates.
Sarah Bailey of the ODI says: “Transferring cash directly takes the power away from the humanitarian community and puts it into the hands of the beneficiaries, a notion that people still remain uncomfortable with.”
Experience of cash-based programming is largely based on recovery operations, with less experience at the very early stages of a relief or emergency response phase.
“We should have begun transferring cash much earlier in Somalia where the markets are very important and continue to function despite collapsing livelihoods and weak purchasing power,” said Grainne Moloney, nutrition technical manager at the UN Food and Agriculture Organization’s Food Security and Nutrition Analysis Unit (FSNAU).
In January, FSNAU began assessing 44 markets across Somalia, monitoring the prices of about 40 commodities every week. “In some markets, it became clear that cash transfers at scale were a valid option early on. Unfortunately, there was a lot of hesitation and concerns over inflation, insecurity and cash diversion. Donors were hesitating as the crisis deepened.”
The three major donors to the crisis, the US, the UK and the EU, are now backing cash transfer programmes across the region.
“DfID is successfully using transfers to reach particularly impoverished populations in challenging places in Ethiopia and Kenya. Transfers reach their recipients more quickly and transparently than more widely prevalent ways of delivering aid,” according to the UK’s National Audit Office.
http://www.irinnews.org/report.aspx?reportid=94396

POVERTY: Putting Food First to Avert a Crisis for the Poor

April 20th, 2011
By Tom Arnold – Concern Worldwide Chief Executive Officer

 Concern distributed cash via mobile phones to extremely vulnerable communities at high risk of malnutrition in Niger, pre-empting a massive food crisis. Photo: Niger, Concern Worldwide

April 15—as part of the Spring Meetings of the World Bank and IMF in Washington, DC—I was a panelist in a groundbreaking global conversation, the Open Forum. It was a unique opportunity for a small group of experts to engage not only with each other, but with 3,000 participants in a concurrent 24-hour chat, and people from 91 countries who had submitted comments and ideas online before the event. The topic was the food crisis—crippling market volatility whose net effect has been a sustained increase in food prices, wreaking havoc on the world’s poor.
This was no staid academic exercise. It was an invaluable part of a larger conversation that grows more urgent by the day because each day, more lives hang in the balance. As World Bank President Robert Zoellick starkly put it, “we’re one event away from a very serious crisis.”


Agatha Akakandelwa working in her tomato field in Nambinji Village, Zambia where Concern is supporting women farmers in sustainable farming practices. Photo: Zambia, Concern Worldwide

Some might argue that we’re at that point already: according to the World Bank, since June 2010 another 44 million people have fallen into poverty because of the spike in food costs; every minute another 170 people join the ranks of the extremely poor—those who spend on average 85 cents of their daily budget of $1.25 on food. The Open Forum provided an excellent opportunity to draw the world’s attention to how terribly vulnerable the world’s poor are.
It’s high time for decisive action in rolling out the short-term and longer-term measures called for by the Forum’s panel and online participants.
Right away, we must launch targeted nutrition interventions for the most vulnerable. In this context, both the international Scaling Up Nutrition (SUN) Framework for Action and Roadmap and the “1,000 Days: Change a Life, Change the Future Call to Action” (a joint US-Irish initiative) can point the way. Research shows that proper nutrition in the first 1,000 days of a child’s life—from conception to two-years-old—is crucial in ensuring proper physiological development.
In addition, more social protection schemes must be put in place in those countries and settings with the financial means and technological capacity to do so. Putting cash in the hands of poor families can help keep local food markets alive and avert serious food security crises. Such was our experience last year in Niger, where we used mobile phones to distribute emergency cash after crops fell short in the wake of a prolonged drought.
Long term, there has to be significant investment in agriculture and the entire food process, from harvesting and processing farm products to sale in the marketplace. This means making sure that farmers have the seeds and tools to get ready for the next planting season; and to repair and build roads and bridges so that crops can be brought to market. Along the way, small farmers also need tutoring in the fundamentals of sales practices.
We also need to invest in agricultural research to find ways to boost crop yields—more food has to be grown on the same amount of land. This will require scientific breakthroughs.
At the same time, we must do something to curb the wild fluctuation in food prices, an issue the G20 has agreed to take on in November. Perhaps there needs to be more regulation at the international level with regard to commodity speculation. A number of mechanisms will be considered. Nothing has been decided at this point, but at least we are taking a hard look at the harsh reality of food price volatility.
The G20 will also discuss the fact that many developing countries put a food export ban in place in the wake of the 2008 food price crisis. Such measures were taken to ensure that local populations would have access to food—but it has turned that such protection had an adverse effect on the international market, narrowing the field and actually contributing to rising food prices. Food trading must be kept reasonably open, so it seems, but specifics will come out later in the year.
There won’t be a simple solution. What’s called for is a combination of carefully chosen and calibrated measures. What has become crystal clear, however, is the importance of the participation of civil society—NGOs included—in developing solutions and putting them into practice. These are not issues governments can or should handle on their own. In the run-up to the World Bank’s spring meetings, Mr. Zoellick had said that “our message to our clients, whatever their political system, is that you cannot have successful development without good governance and without the participation of your citizens.”
The World Bank president was speaking in the context of political developments in the Middle East and North Africa, but his words apply across the board. Already back in 2009, coming out of the meeting at L’Aquila, Italy, the G8 launched the Global Partnership for Agriculture and Food Security, which affords civil society a critical role in designing development programs alongside responsibilities in matters of governance.
Now is the time to give this fresh approach concrete shape. Civil society must have a real voice at the table because it represents the very practical needs of ordinary people, especially the very poorest. It is for their sake—and ultimately for the common good of all—that all the stakeholders must genuinely work together.
We must act now, collectively and urgently. If the food riots of 2008 are any indication, failure to do so could have very dire consequences.
http://blogs.concernusa.org/2011/04/20/foodcrisis/

MALNUTRITION: NIGER: New approaches needed in tackling malnutrition

NIAMEY, 1 April 2011 (IRIN) -

 Photo: Claire Barrault/ECHO
Traditions around food often mean people do not eat the variety they need (file photo)

 Having experienced a series of droughts and food security crises over the past 40 years, Niger is now looking to move beyond simply countering emergencies, investing instead in development and recovery strategies - and changing gear in its efforts to feed a rapidly expanding, highly vulnerable population.
The need for new approaches in tackling malnutrition and chronic food insecurity has been one of the main themes of the Conférence Internationale sur la Sécurité Alimentaire et Nutritionnelle au Niger (CISAN), a two-day scientific and technical gathering in Niamey.
But is Niger ready to make the necessary changes? The country was at the epicentre of the Sahelian food crisis in 2010. Among those worst affected by the food shortages were children, with NGOs recording dramatic rates of severe acute malnutrition (SAM).
The government recognizes that tackling child malnutrition problems is crucial, and has been running an annual feeding scheme in partnership with the UN Children’s Fund (UNICEF) and the World Food Programme (WFP), targeting children aged 6-23 months. The programme reaches 200,000-300,000 children in a normal year, but the number shot past 600,000 in 2010 as the food crisis took hold.
“The timing is right,” said Guido Cornale, the UNICEF representative in Niger. He stressed that donors would be willing to invest more in nutrition interventions if they realized the country was serious about tackling malnutrition.
Development experts have warned that Niger requires long-term sustainable intervention if it is to avoid facing the same scenarios year in year out. Conference contributors emphasized the need to increase the quantity and quality of food and to secure better access to it, while also raising awareness about hygiene, the importance of a balanced diet and the nutritional value of different kinds of food.

Appeal for more resources
Dr Guero Maimouna from Niger’s Public Health Ministry (MSP) said the country had come through two crises in the past six years and had gained the necessary experience to take on bigger and longer-term interventions.
“But to do that we require resources. We are using our existing resources and money to handle the huge problem that we have at hand… We have a large population of malnourished children every year.”
Everyone is hoping the money that long-term interventions can attract will enable Niger to find sustainable solutions.
“You cannot rely on short-term emergency interventions - which are brought in at great cost - forever,” said Charlotte Dufour of the Food and Agriculture Organization (FAO). She stressed the importance of teaching people to do the best with what they had.

Traditional beliefs hamper progress
Recurring drought and the subsequent decline in agricultural production left Niger without food, but the main causes of malnutrition were traditional beliefs about food that prevented people from eating balanced meals, said Mele Djalo, head of health and social action in the prime minister’s office.
“For example, the Fula people, who live in the Maradi Region, do not eat fish; then we have ethnic groupings which consider chicken dirty; some don’t eat eggs, and so on. Creating awareness across these communities is a very difficult job and it requires resources,” she said.
The MSP’s Maimouna acknowledged that in some parts of Niger rations of fortified corn-soya blend, cooking oil and sugar were an attractive package for a family with no food or income: “They keep bringing their child back sick, as the mothers sell the rations given for the child.”
UNICEF’s Cornale said at the height of the 2010 food crisis they discovered that the monthly ration meant for a child lasted only a week. “We found that the families did not have any food and were consuming the rations.”
If you go to areas where there are no NGOs, there are no efforts under way to treat malnutrition
UNICEF then started a large cash transfer programme in the southwestern Maradi and Tahoua regions, targeting 35,000 households with about $126 each over three months to protect the children’s rations. An independent evaluation found the measure had been effective. “Families used 80 percent of the money to buy food,” Cornale said.
There are no national safety net programmes, but food was subsidized in times of crisis, and some emergency distributions were made.

Blanket feeding?
Conference participants debated whether communities should be trained to treat moderate malnutrition, which has a high incidence and affects almost half the children in some areas. An aid worker pointed out that communities were often unable to handle cases of malaria or even severe diarrhoea.
Stéphane Doyon, head of the Médecins Sans Frontières (MSF) nutrition campaign, said their research had shown it was more effective to provide blanket feeding for all children aged 6-24 months in vulnerable areas as a response to moderate chronic malnutrition, and rather use the limited resources, including personnel, to just treat children with SAM.
The mortality rate in children with moderate chronic malnutrition was 25 percent, while among those with SAM it was 75 percent.
Malam Kanta Issa of Forum Santé Niger (FORSANI), a local NGO comprising medical professionals, said there was a lack of budgetary support for improving health services. “If you go to areas where there are no NGOs, there are no efforts under way to treat malnutrition.” Aid workers pointed out that they had lobbied to get nutrition on the conference agenda.
Nevertheless, infant mortality has been a declining trend, and the UN Millennium Goal to reduce child mortality by two-thirds by 2015 might be the only one Niger is on track to achieve.
“There are 2,100 health posts in this country, which manage malnutrition in the rural areas,” UNICEF’s Cornale noted. “They seem to be doing their work.”


A breeder with cattle in the village of Danganari, 40km from Zinder in Southern Niger


http://www.irinnews.org/report.aspx?reportID=92344

POVERTY: How to Protect U.S. Foreign Aid? Improve It

March 14, 2011,  TINA ROSENBERG
Tina Rosenberg won a Pulitzer Prize for her book “The Haunted Land: Facing Europe’s Ghosts After Communism.” She is a former editorial writer for The Times and now a contributing writer for the paper’s Sunday magazine. Her new book is “Join the Club: How Peer Pressure Can Transform the World.”

A Bloomberg National Poll says that more than 7 in 10 Americans think that Congress can find major savings in the federal budget by slashing foreign aid. It’s a new poll, but this is old news.
Americans want to help others, but they’re skeptical that foreign aid can do much good.
Americans have always vastly overestimated how much we spend on foreign aid. A 2010 survey asked Americans what percentage of the federal budget went to foreign aid. The median response was 25 percent. When asked what percentage would be appropriate, the answer was 10 percent. Polls going back at least a decade show similar responses. In fact, foreign aid accounts for less than 1 percent of the federal budget
If Americans are asked whether they want to help bring health, water, education and other crucial resources to poor people around the world, they say yes, by overwhelming majorities. But Americans are skeptical that foreign aid accomplishes these things.
The truth is, much of foreign aid works. Hundreds of millions of people around the world are better off because wealthy countries pay to vaccinate children, dig wells, build roads and buy schoolbooks. But some foreign aid is wasted, stolen or spent on projects that don’t really help people.
The facts about foreign aid are crucial to drive home to the American public today, as the political debate over the budget has led many Republicans to single out foreign aid as a target for cuts. (Frank James, who writes a blog at NPR, suggests a novel way to spread the word, using Charlie Sheen’s Twitter account.)
But let’s talk about on-the-ground practical solutions, The Center for Global Development, a Washington think tank led by Nancy Birdsall, has an intriguing idea that might help. It could make some forms of foreign aid more effective, less corrupt and more responsive to what people need. And in doing so, it could capture more public support for something that improves, and often saves, the lives of millions.
The idea is called Cash on Delivery: instead of rich countries paying for all the little pieces that go into a poor country’s program, they pay only when something good comes out. Aid would get transferred when there are measurable, provable results.
Today, rich countries pay for what goes into a poor country’s program. Why not pay when something good comes out?
Paying for results is nothing new in the world of business, of course. But that’s not the way foreign aid has worked. Let’s say that the United States and Malawi decided to help Malawi increase the number of children who finish primary school. Here’s the current strategy: Aid officials would work with Malawi’s government to decide on whether to build more schools, lower school fees or hire more teachers. Washington would put up the money up front. It would be very involved in the program — vetting Malawi’s strategy, recommending approved ways of going about it, and perhaps even requiring that technical advice or materials come from the United States. Monitoring would be very close; Malawi would have to do a lot of paperwork to get the money and constantly show it is being spent well along the way.
As for the question of whether the program succeeds, we might find out later how many teachers were hired or schools built — or we might not. But we would not attempt to measure whether our aid actually resulted in more children finishing school — in fact, it would likely be impossible to prove such a link. And if the money was squandered or stolen, the only possible penalty would be a cutoff of future aid.
How would this project work with Cash on Delivery? The United States and Malawi would draw up a five-year contract that specifies a set of payments and what Malawi must do to get them. These would be made public. The contract would set a baseline: perhaps the number of children expected to finish school next year. The year after that, and every year for five years, Malawi would receive $20 for every child who finishes school up to the baseline number — and, as an incentive to do even better, $200 for every child over that number. The results would have to be accurately measured by Malawi – since school records are often spotty, Malawi would administer a standardized test and count the number of students who took it, and make those results public by district or even school. Those numbers would be verified by independent auditors. There could be steep penalties for lying.
By basing aid on performance, cash on delivery could reduce waste and corruption.
Once the contract is signed, Washington would then step back and keep its hands off. No monitoring would happen until the audit. Malawi could ask for technical help if it chose to, but how it chose to reach the goal would be entirely up to Malawi. Would more children stay in school if they had school meals? Schools in every village? Or a water supply closer to their homes so girls didn’t have to leave school to fetch water? Malawi could do whatever it thought would solve the problem. If it squandered its efforts in waste or corruption and produced fewer graduates, it would get less money. By definition, then, donor money would not be wasted.
No one is suggesting that Cash on Delivery should replace traditional aid. For one thing, it has yet to be tried — the British Department for International Development is going to be the first. It is working with Ethiopian schools on a program to give payments directly to secondary schools for each extra girl who finishes.
But in certain situations Cash on Delivery might turn out to be a useful alternative to traditional aid. And its advantages may go beyond a more effective use of dollars: it might increase political support for foreign aid.
Paying for results is attractive. People don’t have to worry that the money has gone into some government official’s pocket, as taxpayers in wealthy countries won’t be sending money unless there are results. “This focuses on a few simple outcomes that people can understand,” says Birdsall. “You can say to the taxpayer: mortality fell by this amount.”
It could also help to create more accountability in poor countries. In most aid-dependent countries, citizens have no idea how much governments are getting in aid and how they spend it. Cash on Delivery sets clear goals and requires that all information be public. The idea might also lead to more sustained progress, as the strategies would be fully devised and implemented by local officials based on what they think would work best. It would also alleviate the sense that a country’s problem was fixed by outside intervention; local officials and citizens could claim ownership of the solution.
Experimentation in foreign aid is valuable — and rare. Public bureaucracies are not naturally innovative, and the tendency to stick with the pretty-good is especially strong when people see programs as under siege, a feeling that is fairly constant in the foreign aid business. Because there is such a small political constituency for foreign aid and it is so vulnerable to cuts, many people who work in it feel the best course is not to raise questions about its effectiveness — even if they share those questions themselves.
Cash on Delivery as the Center for Global Development imagines it is yet untried, but other forms of pay-for-results are being used. Perhaps the program closest in spirit is one run by a nonprofit group called the Global Alliance for Vaccines and Immunization (GAVI), which has prevented more than 5 million child deaths by increasing vaccination rates and bringing new vaccines to poor countries. GAVI employs a variety of creative financing mechanisms, including a pay-for-results plan that has been used in 53 of the world’s poorest countries. The goal is to increase the number of children who complete the three-dose series of DTP (diphtheria, tetanus and pertussis) immunizations. For every child immunized above the baseline, the government gets $20. The plan lasts at least five years. For the first two years, the government gets a fixed amount of money. The pay-for-performance kicks in during year three.
The program has helped many countries to increase their vaccine coverage. An evaluation by Abt Associates of the program’s first five years concluded it had a “significant positive impact.”
It is, however, a work in progress. “It worked, but we need to be cautious and not see it as a magic bullet,” said Julian Lob-Levyt, who was head of GAVI until recently. “We underestimated the management skills needed.”
One problem was that in some countries while the national health ministry understood the requirements and realities of pay-for-performance, this this knowledge did not trickle down to the district health departments that had to manage the program. That might be easy to solve — but there were more difficult issues. A paper in the Lancet argued that the temptation to exaggerate success was overwhelming — after all, that’s what the money rides on. The authors said that countries did improve their vaccination rates, but not as dramatically as they claimed to. The study shows the need for any pay-for-performance program to do extensive independent auditing to check a country’s claims.
There are other programs that pay for results, and on Friday I’ll look at what we can learn from them, what Cash on Delivery might be used for, and some of the roadblocks that may await it.
http://opinionator.blogs.nytimes.com/2011/03/14/how-to-protect-foreign-aid-improve-it/?pagemode=print

POVERTY: SOUTHERN AFRICA: Social transfers reduce poverty

17 September 2010 (IRIN) - Southern African countries have some of the world's worst income distribution, but can often afford social transfers, which have proved an efficient means of reducing the number of poor, regional experts said at a two-day meeting in Pretoria, South Africa. "Money can always be found - where there is political will there is always a way," said Nicholas Freeland, director of the Johannesburg-based Regional Hunger and Vulnerability Programme (RHVP) funded by the UK and Australian governments, and one of the co-hosts of the meeting. Social transfers cover the various forms of social assistance for low-income or no-income individuals and households, and can include child support grants, non-contributory pensions, school feeding schemes, and agricultural or other inputs. Six countries in Southern Africa - Botswana, Lesotho, Mauritius, Namibia, South Africa and Swaziland - provide non-contributory social pensions modelled on European social welfare policies. Mozambique, Malawi and Zambia, among others, are experimenting with some cash transfer programmes. Poor countries show the way Poor revenue reserves and lack of capacity often stand in the way of cash social transfers. Experts at the meeting lauded the political will of poor countries like Lesotho and Swaziland, whose successful pension programmes make the most of their limited resources. Lesotho provides a large pension of US$25, but has a high eligibility age of 70 years to make it affordable, noted one of a series of papers produced by the RHVP, in collaboration with the South Africa-based Economic Policy Research Institute (EPRI) and the IDS. "Swaziland, on the other hand, decided on a low eligibility age (60 years) to widen access, but set the pension level much lower ($10)." Evidence has shown that more money in people's hands means they spend more on basic needs such as food, health and education, which has helped both countries to advance towards meeting the Millennium Development Goal (MDG) of halving poverty by 2015. Policy-makers at the meeting, which ended on 17 September, reviewed the role of social transfers in reducing poverty, ahead of the UN summit on MDGs in New York. The Universal Declaration on Human Rights includes the right to social security. Lagging behind Southern Africa is lagging behind on most MDGs: about 45 percent of its people live on less than one US dollar a day, and life expectancy in countries with high HIV prevalence rates has dropped to below 40 years, said Agostinho Zacarias, the UN resident coordinator in South Africa. Social transfers generally fall into two categories: long-term transfers, which target people who face life-cycle risks, such as orphaned children; and short-term transfers, which include social insurance for those who face livelihood risks, such as farmers who have had a particularly bad harvest, said Stephen Devereux, of the Institute of Development Studies (IDS) at the UK-based University of Sussex. In South Africa, social transfers like old-age pensions, and the child support grants introduced in the early 1990s, have managed to improve the lot of at least 47 percent of people living on less than two dollars a day, said another papers in the series. Lovemore Moyo, Speaker of the Zimbabwean parliament, commented: "A country like ours does not have the funds and the resources to put such social transfer programmes in place." Domestic savings Zacarias said countries like Zimbabwe needed to work on building the confidence of the people in government policies to improve their domestic savings, "So you know that the money will be spent where it should, and not diverted elsewhere." He made the point that countries needed to spend on social transfers because "we are social beings", and to show that we care about other human beings. RHVP's Freeland pointed out that at the time when developed countries like the UK and Sweden introduced social transfers such as old-age pensions, they had not been not particularly well-off but had gone ahead because of the "huge inequalities" that existed. Devereux noted that Lesotho went ahead with its social transfers programme without the support of donors. The papers released at the meeting cited a recent study by the International Labour Organisation (ILO) of 12 low-income countries - six in sub-Saharan Africa and six in Asia - which put the cost of providing social pensions at less than one percent of the gross domestic product in each country. RHVP's Freeland said donors could help out with start-up costs, which were often formidable. "They could pay for smart cards, registration of beneficiaries, and monitoring and evaluation of the transfers, but the actual transfers must come out of the country's budget." Sylvia Masebo, a Zambian parliamentarian, highlighted the need for political commitment to social transfers. Many countries, including Zambia, depend on donor support, but "The government allocates the money according to its own priorities and hardly any of it goes towards social protection." Beyond pilotsZambia is piloting a cash transfer programme in some of its districts. "The government says we do not have the money to roll out the pilot programme, we need to exploit our domestic revenue base such as the mining sector to raise the money," Masebo commented. Experts said countries needed to move beyond pilot programmes. "Studies have shown that the administrative costs of running pilots are far greater than running a national social transfer programme," said Isobel Frye, director of the South Africa-based Studies in Poverty and Inequality Institute (SPII) Well-known South African activist Mark Heywood, of Section 27, a local civil rights organization, cited the long campaign to roll out treatment for people with HIV/AIDS as the one to emulate to get governments to provide social transfers. "We found that if you get the people who need it the most to campaign for it, it works." The event was co-hosted by RHVP, the Southern Africa Development Community Parliamentary Forum and the SPII.
Http://www.irinnews.org/report.aspx?ReportID=90514

POVERTY: Cash or Aid?

By ZARAR KHAN AND CHRIS BRUMMITT ASSOCIATED PRESS WRITERS
PESHAWAR, Pakistan -- In this July 25, 2010 photo, a Pakistani boy sells aid products from the United States in Peshawar, Pakistan. Needing cash not food, refugees in Pakistan's flood-ravaged northwest do not have to look far for buyers for their monthly rations. Outside an aid warehouse, middleman wait to buy U.S.-stamped oil, flour and biscuits to supply shops in the city. (AP Photo/Mohammad Iqbal)
Needing cash not food, refugees in Pakistan's flood-ravaged northwest do not have to look far for buyers for their rations. Outside an aid warehouse, middlemen buy U.S.-branded oil, flour and biscuits and supply shops across the city.
The trade is not illegal, but appears to strengthen arguments by aid groups who say that giving money to those recovering from disasters or war is often cheaper, more effective and efficient than doling out food or other assistance like housing materials, seeds or agricultural tools.
Some large charities have already begun handing out money to victims of this summer's devastating floods and others say they have plans to so, continuing a trend that began in earnest after the 2004 Indian Ocean tsunami and has picked up pace ever since.
But some in the humanitarian community remain resistant to the idea, especially those in the larger U.N. agencies, where there are fears that cash can cause inflation and fuel corruption. Many Pakistanis apparently share the same concern. They have preferred to give food, clothes and medicine to flood victims instead of money because of worries it could be misused.
The floods started about a month ago in the northwest after extremely heavy monsoon rains and have slowly surged south along the Indus River, devastating towns and farmland. More than 1,600 people have died and 17 million have been affected by the floods. Water levels are beginning to drop in southern Pakistan as the floodwaters flow down the Indus River into the Arabian Sea.
While giving money in environments where there is no food to buy on the market and banks and distribution networks have been damaged is clearly wrong, in many parts of Pakistan - even those affected by the floods - those conditions do not apply, aid groups say.
"We have other needs too," said Paenda Mohammad, who sold part of his rations from a World Food Programme warehouse in the northwestern city of Peshawar last week to one of several middlemen waiting outside. "Each time we get just flour and oil and this bunch of tasteless biscuits."
Mohammad is one of several hundred people who receive a sack of 180 pounds (80 kilograms) of flour, along with cooking oil, pulses, sugar and high-energy biscuits from the warehouse every month. The goods are clearly marked "Not to be Sold or Exchanged." The flour sacks have American flags emblazoned on them.
Mohammad and his family have been displaced by fighting over the last two years between the Pakistani army and the Taliban in tribal regions close to the Afghan border, not by the floods, which have hit communities elsewhere in the northwest.
Men with pushcarts then take the goods to shops around 100 yards (100 meters) away, where shopkeepers display them prominently.
"This is very fine flour and cost-effective too," said Nawab Ali, who bought a 100-pound (50-kilogram) sack and rode off with it, and his two young children, on a motorbike.
"We mix it with a little local whole-wheat flour and make good bread out of it."
The World Food Programme said it monitored markets in the northwest to see how much of its supplies were ending up for sale and that levels in Peshawar were not unusually high.
American officials said they were not so concerned about people selling the aid, but would investigate whether any supplies had been stolen from somewhere in the distribution network and then put up for sale.
While aid groups use the term "cash-based programming," actual money is rarely given because of security reasons. The assistance is mostly in the form of checks, vouchers, food stamps or remittances at banks.
Some aid experts say the resistance to cash by some aid groups is as much cultural as anything else. They say it challenges deep-seated and largely unspoken assumptions that Western countries know best what the poor in developing countries need.
Several studies have shown that a main argument once used against giving cash - that recipients would spend it on cigarettes, alcohol or drugs - is not true.
"We can trust people. They are wise enough," said Claudie Meyers from Oxfam GB, which has already given checks of around $60 to 7,000 families in the northwest and plans to give out similar amounts to 40,000 more.
"They can prioritize their needs. If I was in this situation, I would buy food. They do the same."
The WFP, which plans to be feeding 6 million people in Pakistan by the end of September, recently concluded a pilot project in Buner district in the northwest where it gave cash vouchers to people rather than food. It found that recipients spent 70 percent of the money on food and the distribution costs were around five percent cheaper than trucking in food.
The study also reported a significant boost to local shops.
Wolfgang Herbinger, WFP's country director in Pakistan, said there would likely be more cash-programming in the future in the country, but said the agency still "tended to be a bit cautious."
"Many people are fairly ideological on cash, I find, but the analysis and evidence is not there," he said. "There is currently so much hype, every donor says it stimulates the economy," he said, adding there was a risk that "if you throw the money, it does not add a kilogram of food, it only drives up prices."
Many governments around the world already give their poorest citizens cash handouts or food stamps.
Pakistan has a scheme named after the slain former prime minister Benazir Bhutto that gives out the equivalent of $24 every two months to its poorest people. The United States has donated at least $85 million dollars to that fund.
The government has also announced plans to give $250 to families affected by the floods.
Paul Harvey, an independent aid consultant who has studied the use of cash in emergency situations, said that so long as aid groups were responsible, it was a very effective response. He said that in reality a mix of food, other aid and cash was often the ideal choice.
"Cash should be part of the tool box and could be used more than it currently it is," he said. "People prefer having cash. It is a more dignified way of doing things."
Several flood victims returning to their villages in the northwest said they would prefer money.
Many people have complained over the last month of humiliation when scrounging for food thrown from a helicopter or the back of a truck.
"We prefer the cash. Because whenever this stuff comes - whether it is food or anything else - the distribution is not very good. Undeserving people get things that other people truly need," said Mirbat Khan who was looking at the remains of his village in Nowshera district.
http://www.seattlepi.com/national/1104ap_as_pakistan_floods_cash_versus_food.html

POVERTY: Indonesia, More than 31 million now live in poverty

According to the Central Statistics Agency (BPS), the number of Indonesians living in poverty dropped by 1.5 million during the year ended in March, partly because the stability of food prices.
As of March, around 31.02 million people were living below the poverty line or about 13.33 percent of the total population, a BPS report says.
These figures indicate a reduction of 1.5 million people from the 32.53 million (or 14.15 percent of the total population) living in poverty in March last year.
However, BPS chief Rusman Heriawan said this year’s figures
were less than the reduction witnessed in March last year (down 2.43 million).
“We have seen a reduction in the number of people living below the poverty line, but it wasn’t as big as we had hoped,” Rusman said at his office on Thursday.
He said the reduction was largely a result of improved stability in the market prices of basic foods.
“The bigger reduction in the number of people living in poverty last year was thanks to the direct-cash aid program provided by the government to the poor,” he said.