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1
SOCIAL PROTECTION STRATEGY ON SHOCKS : NATURAL DISASTER, ECONOMIC CRISES,
SOCIO-POLITICAL SHOCKS
By Rachel Cipryk (World Bank)
Paula Bertolin (USAID) John Lamm (USAID)
Siebren Wilschut (WFP/Mozambique) Silvia Caruso (WFP/Mozambique)
Ririn Purnamasari (World Bank/Indonesia)
Haryadi Sabar (Indonesia) Riya Farwati (Indonesia)
Protecting Lives, Livelihoods and Development Investments from Shocks
Emergency response currently saves lives, but not livelihoods and development investment Emergency responses can be slow when response
systems are not pre-planned Safety net structures are rarely built to respond to
disasters, but could do so effectively if properly designed
We have invested in SN programs that respond to chronic need and vulnerability - how can we use them to respond
to shocks, too?
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Designing Flexible Safety Nets for Rapid Response o Targeting
• target shock-affected and known vulnerable HHs – integrated registry • scalable – how to include non-core beneficiaries
o Benefits • nature of transfer and level of assistance • rapid delivery – e.g. smart cards, phone credit; using existing systems
o Financing • local, regional, national level contingency budgets
o Administration • agreed-upon protocols for inter-ministerial programs (e.g., MOUs);
coordination between ministries • contingency plans for response through existing mechanisms
o Building resilience of beneficiaries and communities • e.g., nutrition, education, public works for natural resource mgmt.
o Political support • may inform decisions re: which programs are used for response
Mozambique – Poverty, Vulnerability and Natural Disasters CONTEXT • Total population : 23.2 million
• 54% under poverty line, of which 80% live in rural areas (Household survey 2009). GDP per capita $458 (2010)
• Rural population heavily dependent on agricultural activities highly seasonal and sensitive to climatic shocks
Type of recurrent natural disasters • Major hazards : droughts, floods and cyclones
- 1.3 M people (5% of population) at risk of drought
- 350,000 exposed to floods and cyclones
• Second most likely country to suffer economic hardship due to natural disasters (Maplecroft Natural Disasters Economic Loss Index).
• Floods, cyclones and droughts exacerbate poverty covariate shocks can increase the national poverty rate by 2 percentage points. (WB 2010)
• Climate change, increased exposure to natural disaster risk over the coming 20 years.
Floods & drought , cyclones prone areas
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Non-contributory social assistance managed by Ministry of Women and Social Action: 1. Regular unconditional Cash Transfer to elderly and chronically ill (PSSB): coverage
338,000 households funded with national resources , mainly elderly and disabled unable to work;
2. Temporary support via vouchers/in-kind transfers to poor families affected by idiosyncratic shocks (PASD) 2,200 HHs;
3. Productive Social Action Programme (PASP) Public works “plus” model. New programme being rolled out, government target 440,000 HHs by 2014, for able bodied.
Plus = financial literacy-, live/work skills training, health services etc.
National SP Strategy identifies PASP as a mechanism to address the vulnerabilities associated with climate-related shocks.
Mozambique – Poverty, Vulnerability and Natural Disasters Social Protection Strategy 2012 – 2014
Expenditure on Social Protection 2.8 % of GDP in 2012 , of which: • approx. only 0.7 % are for social assistance broadly defined – majority are non-contributory transfers; figures up to almost 1.8 % when including external funds.
2011 revised SSN programmes approved: efforts to rationalise.
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Design Scalability/flexibility Potential adjustment measures Targeting and eligibility - Geographical (poverty ranking) - CBT - PMT score
PMT time and resource intensive - Allow for CBT only in disasters context Use risk maps to support geographical targeting
Transfer value $22 or equivalent in food for 16 days/work/month
Part-time employment leaves space for reconstruction requirements
Introduction for lump-sum payment as reconstruction incentive
Transfer frequency 4 months rural (lean season)
Does not factor in longer periods if high impact shocks
Allow for flexible periods
Eligible activities public goods based on 30/70 ratio (capital/labor)
High-labour content might be a trade off with assets’ quality
Disaster & livelihood-sensitive menu of activities should be developed
Mozambique – Poverty, Vulnerability and Natural Disasters Disaster Response Readiness of PASP
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Funding Scalability/flexibility Potential adjustment measures Resource availability Funding cap on domestic resources External funding predetermined
National contingency funding available
Contingency funding provision to be activated automatically according to triggers/threshold
Institutional arrangements
Scalability/flexibility Potential adjustment measures
Inter-ministerial SP coordination body
Central level only, chaired by Ministry of Social Action (weak political weight against Disaster Management Office)
Define roles & responsibilities between disaster office and Ministry of Social Action to activate SSN in emergency context
Mozambique – Poverty, Vulnerability and Natural Disasters Administration Scalability/flexibility Potential adjustment measures
Single registry Work in progress
Only effective in districts with ongoing SSN
High-disaster prone districts to be prioritized
Delivery mechanism to be outsourced Private sector
Lack of FSP coverage and services (high unit cost) Disaster Management Office cash-adverse
Contract negotiation to embed flexible service delivery
MIS Work in progress
More comprehensive and coherent Not ready on short notice (by 2014).
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-15
-10
-5
0
5
10
15
20
25
30
1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
GDP growth and Poverty Headcount Indonesia, 1996-2010
Annual Real GDP growth (%)
Poverty headcount ratio at national poverty line (% of population)
Global Financial Crisis
Asian Financial
Crisis
Global Food and Fuel Crisis
Crises and shocks will recur in Indonesia:
Increasingly globalised nature of economy and planned policy shocks.
Indonesia’s location on the highly volatile Pacific Ring of Fire.
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Lessons learned from previous crises ...
Government responses were slow or problematic since a crisis monitoring and response system did not exist yet
While responses ideally optimizing the available programs, they are not necessarily appropriate as crisis response
Five criteria for evaluating the appropriateness of existing programs for shock response 1. Can the response be quickly deployed?
• Nature of program and institutional capacity 2. Can the benefits be delivered to the right households/area ?
• Good targeting system in place 3. Can the response deliver the right amount of support to households during crisis? 4. Can the response be temporary and cost-effective?
• What are the administrative costs as a percentage of total program costs? • Can the benefits be discontinued when shock is over?
5. Will there be political support ?
Assessing Existing SA programs in Indonesia using Five Emergency Response Criteria - at its current state
PROGRAM Quick Response?
Right Benefits? Targeted Well? Cost-effective? Temporary?
Politically Supported?
Raskin (Price subsidy for rice)
YES/NO NO MODERATE NO YES
BLT (UCT) YES YES MODERATE YES NO
PKH (CCT) NO YES MODERATE Not in the long-run.
Long-term program.
Yes.
BSM (Scolarship)
NO NO. MODERATE Not in the long-run.
Long-term program.
Yes.
Pre-determined response protocols
Pre-determined response options
Optimizing the existing instruments and programs Modifying the existing program for crises response:
rapid, effective, temporary Piloting new potential programs, for example Public
Works
– Determining beneficiaries – Determining assistance (the length and level) – Identifying implementing agencies – Budgeting and disbursement
What Indonesia need to do for having an effective respond function
Good Practice Examples
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Design Feature Examples
Targeting Pakistan national registry Crisis modifier clauses Sahel Drought Multi-year Assistance Programs
Benefits Destocking in Pastoral Areas Electronic transfers in Pakistan, Kenya, South Africa
Financing Ethiopia PSNP Indonesia Catastrophe Draw-down Option (CAT-DDO)
Administration USAID Joint Planning Cells (Kenya, Sahel)
Political Support Mozambique PASP USAID Resilience Strategy World Bank Social Protection and Labor Strategy
Resilience Building Ethiopia PSNP Bangladesh CHARS Livelihoods Program Harita rainfall insurance through PW in Ethiopia
Annex I: Resources
• USAID Resiliency Strategy – http://usaid.gov/resilience
• World Bank Social Protection and Labor Strategy • IDS Adaptive Social Protection Project
– http://www.ids.ac.uk/project/adaptive-social-protection
• World Food Program – http://www.wfp.org/content/update-wfps-safety-net-
policy
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