Dev’t expert: cash transfer OK, but how will poor be chosen?

Published by rudy Date posted on November 29, 2010

MANILA, Philippines—The selection of beneficiaries is one of the most contentious portions of cash transfer programs in various countries, according to Social Watch coordinator and Third World Institute executive director Roberto Bissio.

“The problems related with cash transfer are mainly around the decision of who do you give the money to. How do you determine who is entitled to it or not? And that is one of the aspects where many, many things can go wrong,” he told reporters.

Bissio, who works with nongovernment organizations around the world, said the dynamics of choosing who to give the cash assistance leave the process vulnerable to corruption and abuse of power.

A cash transfer program can help people, but for it to help people rise up from their poverty, it has to be coupled with job provision and other services, he said.

Support programs

“A cash transfer can be a very fast way of reaching a lot of people fast and efficiently, and improving immediately their lives. But then it has to be supported and be part of a wide range of other measures and service provision and job creation if you want the poverty eradication to be sustainable,” he said.

The Uruguay-based Bissio also spoke at a Pan Asian Capacity Building workshop on regional development hosted by Social Watch Philippines on Ortigas Avenue in Pasig City.

In the Philippines, the conditional cash transfer program, which the Aquino administration seeks to expand, has been the subject of controversy.

Critics question its sudden expansion to cover 2.3 million households (from one million households), as well as its P21 billion budget, which they say should be devoted to basic services and livelihood projects.

Who is poor enough?

According to Bissio, biases may be involved in determining who is poor enough to receive monetary assistance from the government. The selection of beneficiaries could also vary from country to country, from region to region and from province to province.

The absence of very clear rules on who is entitled to the cash assistance could also create problems. The interpretation of these rules could pave the way for corruption or abuses of power when determining which households get the money.

Officials could choose the beneficiaries arbitrarily or based on their personal preference.

But even with set criteria, the selection of beneficiaries is not a cut-and-dried activity, Bissio said. For instance, it would be difficult to choose beneficiaries from poor communities based on income because the residents are essentially unemployed and their money comes sporadically, depending on whether they have come upon an odd job or some other means to put food on the table.

Families that own certain appliances, like a flat screen TV, may be deemed excluded, but in reality the item may have been a gift and the family could still be considered to be poor.

Costly monitoring

And keeping an eye on the chosen beneficiaries, to make sure they are qualified and that they are keeping their part of the bargain, could be a costly and complicated activity.

“You may have to check and recheck, and then it’s complicated, expensive, bureaucratic,” he said.

He also said that when families fail to meet the conditions set for the cash assistance, such as not sending their children to school, it usually means there is a bigger problem, like lack of food

Taking the cash assistance away because of the families’ failure to meet the conditions could just exacerbate the families’ woes, he pointed out.

Ethical commitment?

He said that in most of the cash transfer programs, the condition “tends to be more like an ethical statement of commitment than a natural trigger that would stop the transfer.”

But he said not automatically cutting the cash assistance for failure to meet the condition was okay, especially if the cash transfers are going to the families that need it.

“You have to understand the real logic of what you want to achieve,” he said.

Interest, greed

Bissio stressed the need to ensure the proper selection of beneficiaries and distribution of the money, especially since cash transfer programs tended to involve large sums of money. Such big amounts tend to attract interest and greed, he added.

“It’s unavoidable, it’s human nature. People will have an interest of some kind, either tapping from that money or tapping from the political power or benefits that one way or the other they can extract out of being perceived as the providers of that money,” he said.

Bissio acknowledged that the cash transfer programs still have a role to play in helping countries reduce poverty, even if many countries have come to realize that it is better to offer universal services, such as education for all, rather than setting up programs specifically targeting the poor. –Leila B. Salaverria, Philippine Daily Inquirer

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