Sonya Sultan Social Development Adviser Policy Division Social Transfers to Tackle Child Poverty 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

Page 1 Millennium Development Goals are off track 800 million hungry 11 million children under five die each year 100 million children not in school 43 million orphans in Africa, over 80 million in Asia 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

Page 2 Commission for Africa Recommendation: African governments should develop social protection strategies for orphans and vulnerable children, through support to their extended families and communities. Donors should commit to long-term, predictable funding of these strategies with US$2 billion a year in 2007 and rising to US$5-6 billion by 2015

Page 3 Children Affected by AIDS The UK has endorsed the Framework for the Protection, Care and Support of Orphans and Vulnerable Children Living in a World with HIV/AIDS (hereafter referred to as the UNICEF Framework). In line with that we are working to ensure that vulnerable children and those orphaned by AIDS, receive the care, financial and social support they need, have assured access to health services, and are able to attend and complete school.

Page 4 What are Social Transfers? All forms of public action (governmental or non governmental) that are designed to transfer resources to groups deemed eligible due to deprivation. Can include: Employment guarantee schemes Fee Waivers Subsidised or free commodities Cash transfers

Page 5 Why consider Social Transfers now? We are not making enough progress with MDGs We need something that will have have an immediate effect as well as help address long-term development goals This is a cost-effective means of addressing extreme poverty New willingness by donors and governments to consider this as an option

Page 6 What can it achieve? Mexico Oportunidades Growth rate of month children up by 16% Average household consumption grew by 14% In Brazil, the Child Labour Eradication Programme (PETI), Reduced the incidence of child labour from 19.6% in 1992 to 12.7 in South Africa – Pensions Living with a pensioner reduces likelihood of household being poor by 12%

Page 7 Can cash transfers be put in place in poor countries? Bangladesh – Cash for education Covered 2.4 million children in 2004, has resulted in a 20-30% increase in school enrolment among beneficiaries. The children on this programme are also likely to stay in school between six months to 2 years longer than other children (CHIP, 2004). This is likely to increase their lifetime earnings by 7 to 25%. Nicaragua - Red de Proteccion Social 22% increase in school enrolment from a baseline among beneficiaries of 68.5%. 18% increase in immunization among recipient children aged between 12 and 23 months.5 % decline in stunting for children under 5 years between 2000 and 2004.

Page 8 Impact of Social Transfers Regular and predictable transfers to the poor have an immediate impact on poverty and hunger, while also addressing long-term human development outcomes Improves nutritional status Reduction in income poverty Increase in the number of children attending school Improvements in health, specially of children

Page 9 Cash transfers can support growth Stimulate local markets Reduce distress selling Build productive assets In the long-term, enable children from very poor families to become a better- educated and healthier workforce

Page 10 The effect of cash transfers on children Even programmes not directly targeting children tend to have significant beneficial impact on children Pensions in Namibia Productive Safety Nets Programme in Ethiopia Cash Transfer Programme in Zambia Cash Payments to War-displaced Urban Destitute households (GAPVU) in In Mozambique

Page 11 Complementing other interventions Cash transfers will be most effective when combined with access to services and availability of wider economic opportunities for the household. Cannot be a solution to extreme poverty on their own.

Page 12 Are cash transfers affordable? A recent study by ILO demonstrates A pension to all people over 65 would cost no more than 1% of GDP or 3.7% of government expenditure A national programme to reach 10% of households with $6 per month – as in Zambia – would cost no more than 0.7% of GDP in Ethiopia and and Tanzania and 0.5% of GDP in Kenya In Zambia, this would be less than 2% of annual donor assistance

Page 13 Are Cash transfers affordable? Cost of child benefit at US$ 0.25 ppp per day to all children up to the age of 14 ranges for 2005 from 1.8% of GDP (Guinea) to 6.3% (Tanzania) If child benefit restricted to orphans up to the age of 14, then cost falls mostly to less than 1% of GDP in African countries considered. Bangladesh Cash for Education is financed from the Government recurrent budget

Page 14 Cost-Effectiveness It is cheaper often to have a long-term and predictable social assistance programme to address extreme deprivation rather than using emergency food aid Examples: In Ethiopia, the safety net programme now in place will cost one third the annual ‘emergency’ food aid to the same population In Zambia, cash transfers will cost $19million compared to $45 million for food aid for a similar number of people

Page 15 Implementation challenges Social Transfer practice will vary in different institutional contexts. It is possible to start with simple designs and scale up. Social transfer programmes have even been possible in fragile states such as Somalia, DRC and Afghanistan

Page 16 How Much ? Who to ? And how? Agreeing who is poor – targeting issues Understanding needs for and effect of transfers Understanding the scope for graduation Getting institutional set-up right and management support Making sure the finance will not dry up

Page 17 Country leadership and Ownership The key implementation challenge will be to get political support for Social Transfers within governments, the electorate and regional institutions People likely to benefit from SA not in positions to influence decision-making Politicians worry about making such long-term commitments to social transfers – seen to encourage ‘dependency’

Page 18 What do donors and DFID need to do differently Donors also need to show their willingness to support Social Transfers – traditionally have been averse to cash and ‘social welfare’ type approaches Have to commit to long-term and predictable funding for Social Transfers – this is beginning to happen – Ethiopia, Zambia