Pakistan’s policy makers must revisit unconditional cash distribution among the poor as it has not reduced poverty in the past and the country cannot afford to keep doing it for an unlimited amount of time, stressed PIDE or the Pakistan Institute of Development Economics, a policy think-tank in its study Unconditional Cash Transfer and Poverty Alleviation in Pakistan BISP’s Impact on Households’ Socioeconomic Wellbeing.
The study focused on the Benazir Income Support Program (BISP), the largest social safety net program, which has not succeeded in reducing poverty among its recipients despite 12 years of intervention. Under the BISP program, 5 million people get Rs6,000 every three months or Rs2,000 monthly.
The BISP should shift its focus from unconditional to conditional transfers that may help improve human capital and asset creation, PIDE advised. The existing BISP conditional cash transfers should be extended to secondary level education as financing up to the primary level is not enough to build human capital among the poor.
Only 4% to 5% of senior citizens, over the age of 60, have been benefiting from the BISP, which indicates that the young population has been getting a fair share of the program. Any new intervention must target the youth by providing them market-based skills. Such skills, accompanied by interest-free loans, may generate livelihood opportunities for the poor, and lower their dependency on handouts.
Moreover, social safety nets alone cannot alleviate poverty. Unconditional and conditional cash transfers alone will not alleviate poverty in regions deprived of education, health, infrastructure and market connectivity. A stable macroeconomic environment is needed to eradicate poverty.
The study pointed out that the federal and provincial governments were running several parallel social safety net programs. This has led to duplication as well as exclusion of some the deserving.
The recently developed Poverty Alleviation and Social Safety Division should work on the consolidation of all such programs, and formulate a social protection framework by enlisting the roles and responsibilities of both tiers of government.
The poor must be given space to grow as mere handouts would not help them emerge from the menace of poverty since a cash transfer cannot be a substitute for opportunity. Exclusion from opportunity is the biggest reason for people staying poor. The “apartheid social regime” excludes the poor in housing, employment, leisure and space from entrepreneurship.
The recently drafted Ehsaas strategy, which has tried to re-conceptualize the program, needs synergy and coordination among departments at the federal and provincial levels, which is generally difficult to create. Moreover, it will also need strong commitment and financial resources to successfully implement it.
The Ehsaas program aims to cater to 12 million families, which also includes persons registered under BISP, distributing Rs12,000 per family with a total initial budget of Rs144 billion.