Pakistan’s cash transfer emergency program will be instrumental in mitigating the impact on the economy due to the novel coronavirus (COVID-19), said the World Bank.
According to a blog on the World Bank’s website:
Cash transfers will be instrumental in mitigating the impact of the upcoming recession by ensuring that consumption by the poorest and vulnerable contributes to the local economies.
It suggested that if the fiscal space allows the government, emergency cash transfers should be considered an optimal option to rejuvenate local economies.
Last month, Prime Minister Imran Khan had announced the country’s biggest-ever Ehsaas emergency cash program worth Rs. 144 billion to disburse Rs. 12,000 each to around 12 million beneficiaries who were mostly affected by COVID-19.
At a time when cash transfer programs are the most widely used instruments to counter the socioeconomic fallout from the pandemic, the case of Pakistan provides a good insight to others, the blog added.
No doubt this response is one of the best investments that a government could make in a crisis. The cash transfers provide purchasing power for people to meet their needs, said the blog. Nearly 24 percent of Pakistan’s 210 million people are below the poverty line. The country requires a rapid response to protect its poor from becoming even worse off.
The national lockdown imposed on March 13 is a necessary pre-emptive step to contain the health emergency. But it compounds socioeconomic risks for the vulnerable who have lost their jobs or can’t access health and social programs.
In addition, the pandemic puts women, who are already disadvantaged in the labor force, at greater risk as they carry the invisible burden of caring for the sick, elderly, and children.
One of Pakistan’s initial measures, with support from the World Bank, was to expand its national safety net institution, the Benazir Income Support Program (BISP), to direct additional support to its 4.5 million women beneficiaries.
The government also scaled up its flagship cash transfer program, Ehsaas Kafalat, to include 7.5 million additional vulnerable families affected by the crisis — thus increasing its annual budget dedicated to cash transfers by 85 percent.
Pakistan’s quick action was possible because the country has invested in programs like BISP and Ehsaas Kafalat which form one of South Asia’s largest social safety net systems. They provide quick registration options and reliable payments through biometric verification. Their online linkage to the national ID database helps prevent duplicate payments while ensuring transparency.
While these investments have achieved results, there’s room for further improvement.
A move towards a dynamic system for updating the National Socio-Economic Registry (NSER) and integration among social program databases will help keep the data current and ensure a two-way flow of information.
Besides avoiding duplication of effort, a centralized and integrated social registry would also provide data for informed decisions regarding socio-economic policies and initiatives.
Along with this, the governments (federal and provincial) need to expand the primary education and children’s health-related conditional cash transfers to integrate aspects of long-term human development and reduction of intergenerational poverty.