Not to confuse social safety net with poverty alleviation

 

Researchers working at the Bangladesh Institute of Development Studies (BIDS), the oldest economic research and think-tank in Bangladesh, have recently completed an analysis of a government programme titled, `Strengthening Women’s Ability for Productive New Opportunities’ (SWAPNO). Based on their findings it has been recommended that instead of the prevailing social safety net programmes those with a productive orientation like the women’s programme that has been studied should be taken up. According to them this will enable the beneficiaries of social safety net programmes (SSNP) to have savings with which they can undertake investment-based activities for poverty alleviation.

The Brac Institute of Governance and Development (BIGD) has endorsed their views, observing that social safety net programmes that are in operation were a short-term affair which would benefit by incorporating the concept of `productive safety net’. Clarifying that it is not suggested that SSNP should be folded up, rather based on experience, it is felt that unproductive safety net programmes are difficult to continue for longer period. Echoing the same view, the BIDS researcher concluded that rather than “spoon feeding” over a longer period it is better to support a “mini big push” over a short period to have a major impact on poverty reduction.

Well-intentioned as the BIDS researcher and the BIGD are, there seems to be a confusion over the basic concept of social safety net programmes in contrast to poverty reducing ones. Firstly, safety programmes are not meant to help the beneficiaries to graduate out of poverty. It was introduced for subsistence of those who are unable to work because of old age and other physical disadvantages. Because of these handicaps they are ‘unemployable’ in the labour market and are unfit to become self-employed at the same time. The SNPP has been designed to help these unfortunate people to survive at subsistence level with help in kind or cash. Giving them more money than required for subsistence is not going to enable them to invest in income-generating activities for the simple reason that they are not in a position, either physically or mentally, to engage in such undertakings. More money in the hands of these groups of people will only lead to more consumption and even wasteful expenditures. Even if they can save out of any extended financial help, they will have no idea about investment opportunities and the physical and mental capacity for taking decision on the same. The SNPP that is now in operation recognises this limitation of the target group and does not mix up subsistence strategy with productive initiatives for poverty reduction. In a strict sense, SNPP does not improve the poverty situation of the target group, rather it seeks to help them to make both ends meet through ‘income transfer’ at the barest minimum level. There is no such thing as ‘productive safety net programmes’ when the beneficiaries are past their working ability, whether because of old age, illness or other handicaps. Helping these groups is based on humanitarian considerations and not on economic ones. BIDS is spot on in saying that social safety net programmes is just a token transfer of money but it is token that takes into consideration the need of the disadvantaged groups for subsistence. With the best of intention and earnest efforts, the beneficiaries of SNPP can not be brought out of the poverty trap into which they have fallen. In a sense, for these groups of people poverty is the result and not the cause of their condition of living.

Poverty alleviation programmes, on the other hand, are meant for productive activities to be undertaken by those among the poor who are physically and mentally fit for these. Granted, not all of them will be able to undertake these activities successfully because of lack of experience. But given basic training for skill formation, many of them can make a go of it to break out of the ‘vicious circle of poverty’. Those among the poor who are receiving funds from government or from NGOs (non-governmental organisations) with entrepreneurial capacity clearly have an edge over others that do not have the same. They are the first to touch the finishing line and make the outcome of poverty reducing activities irreversible. A pragmatic approach to poverty reduction with income-generating investments presupposes the identification of the varying capacities of the poor included in any poverty-focused programmes. By definition, the beneficiaries of SNPPs are beyond the pale from such investment programmes.

The most glaring shortcoming in all poverty-focused programmes, whether funded by government or NGOs, is that rarely a provision is made to use some part of the fund given to the poor for productive purposes. As a result, funds ostensibly given for productive activities are inevitably diverted for unproductive purposes, mainly for consumption of the recipients and their family. Because of this diversion many poverty-focused programmes meant to yield productivity ends up with less production. The ground reality about consumption need of the poor even when they are engaged in productive activities is known to all involved in the business of poverty alleviation. Yet, there is a strange ostrich-like attitude to ignore these hard realities. Many cases of failures in poverty alleviation programmes can be attributed to this lack of realisation by their sponsors.

Instead of mixing up apples with oranges, as the recommendation for productive SSNPs involves, the objectives of SSNPs and poverty-focused programmes should be kept separate.  There is need and scope for fine-tuning both and the researchers’ efforts will be best rewarded if their analysis is based on recognition of the differences between the two. The SNPPs and poverty-alleviation programmes are two different kettles of fish and should be regarded as such. What is appropriate for one is not applicable for the other.

The target group of the ‘Strenghening Women’s Ability for Productive New Opportunities’ (SWAPNO) project, sponsored by GoB and UNDP (Government of Bangladesh-United Nations Development Programme),  has succeeded in becoming productive through savings and investment because the consumption need has been recognised and provided for accordingly. Firstly, they get training on a livelihood that is expected to generate a steady stream of income in future. Secondly, fund is given to them to undertake those activities after the training is over. Alongside, they receive money to meet living expenses. The SWAPNO is designed to be a training and delivery of higher amounts of money than is usually given in a poverty-focused programme. So, it is an improved model of poverty-focused programmes and should not  be equated with SSNPs.

There is no scope for introducing the concept of ‘Productive safety net’ into prevailing safety net programmes. It is evident that SWAPNO is not a SSNP, rather it has turned the traditional poverty-focused programmes on their head, adding the new dimension of consumption needs. Where the SSNPs require reforms is in the selection of the target group and timely provision of the help. Both of these may go a long way in reducing wastes. To suggest that SSNPs should be productive is to lose sight of their objectives and manner of implementation.

 

Source: 

 Hasnat Abdul Hye

The Financial Express. Bangladesh. 18-12-2019

hasnat.hye5@gmail.com