Download Key issues/gaps Area/ Programme

Sri Lanka: Strengthening
Social Protection
Coping with Risk: Social Safety Nets
Dileni Gunawardena
Senior Lecturer
Department of Economics & Statistics
Overview
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Risks
Vulnerable groups
Existing social safety
net/programmes
Key issues
Policy directions
Risks
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Individual
(Idiosyncratic)
Community
(Aggregate/
Covariate)
Risks
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Individual
(Idiosyncratic)
Community
(Aggregate/
Covariate)
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Sickness, disability or
death of family member.
Poor are susceptible to
• Communicable diseases:
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respiratory infections,
mosquito-borne illnesses
Water-borne diseases
• Non-communicable
diseases
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Cardiovascular, diabetes,
tuberculosis
Unemployment
• Labour market constraints
• Aggregate shocks:
droughts, disasters,
conflict
Risks
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Individual
(Idiosyncratic)
Community
(Aggregate/
Covariate)
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Drought, crop failure,
other natural disasters
• Drought most significant
(people affected/needed
relief). 27 major episodes
in 1948-1992 period
• 24 floods, 17 landslides
(Badulla, Ratnapura,
Matale, Kegalle, Nuwara
Eliya, Kandy, Kalutara), 10
cyclones
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Conflict-related risks:
several hundred thousand
displaced
Ageing: Over next 25
years, share of popn > 60
will double from 1 in 10 to
1 in 5
Vulnerable groups/individuals
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Children
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Working age adults
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Elderly
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In large families
Disabled
Out of school (2%)
Street children
Soldiers (1,284 btwn 9-17 yrs)
Malnourished
In informal sector, remote/riskprone/infrastructure-poor areas
Unemployed low income
Displaced
Disabled (only 16% work, poor?)
Most rely on family support (only
2/3 are happy with this), LFP of
>60 fallen, only 16% had planned
for old age
Existing social safety nets
Area/Programme
Beneficiary
group
Expenditure
Samurdhi programme (income
The poor
transfers, micro credit, small scale
infrastructure, infant milk
subsidy)
12,449 mn.
(0.62% of
GDP)
Civil conflict related programmes
(payments to disabled soldiers,
rehabilitation and reconstruction)
Conflict
affected
population
6,392 mn.
(0.32% of
GDP)
Flood and drought relief
Population
affected by
natural
disasters
1,466 mn.
(0.07% of
GDP)
Other (Triposha, MCH/N, disability Specific
allowance, assistance for indigent
population and disabled)
456 mn.
(0.02% of
GDP)
Issues
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Targeting, benefit and work incentives of
Samurdhi programme could be improved
Disability programme does not reach all
poor disabled
Social welfare and care services exist but
provide limited coverage
Relief programmes could be strengthened
in their ability to support affected
populations.
Cost of delivery of safety nets likely
increased by involvement of many
ministries
Issues with Samurdhi: Targeting
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Evidence of mis-targeting.
• Outcome similar to untargeted programmes
such as Primary Health Care or Education
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41% of population received the benefit in 2002
44% of HHS in top 3 quintiles of population received
Sin 1999/2000
Only 60 percent of households in bottom quintile rcvd
in 1999/2000
Only 23% of poorest quintile and 27% of next
quintile of elderly
Targeting errors systematic
• ethnicity, party affiliation, NIC holding related
to probability of Samurdhi receipt.
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Mistargeting at local level, not in central
level allocations to districts
• Lack of rigorous criteria to establish eligibility
Issues with Samurdhi: Adequacy
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Level of benefit low
• 5-7 days of food per month, at best increased
food consumption of 4 lowest deciles by 7
percent
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Benefit payments smaller than stipulated
grant
• because of compulsory savings and social
insurance scheme and ¼ amount of average
shortfall
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Value eroded with time
Worker disincentives possible, though
unlikely
Issues with income support for
disabled
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Only 41% of disabled (surveyed) receive
any sort of income transfer
Main group (92% of transfers, 85% of
total budget) is disabled soldiers, others
are undercovered
Expenditure rising, possibility of collusion
and moral hazard increasing
Integration of disabled into society
(education and employment) needed
Issues with Relief
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Relief (dry rations) for displaced persons
(IDPs) insufficient to meet their nutritional
needs
Fiscal restraints limit coverage of provision
to permanent resettlers
Tsunami-related cash transfers—no errors
of exclusion reported, but significant
errors of inclusion
Wage rates in workfare were above
market
Knowledge gaps
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In understanding/designing of exit
conditions (Microfinance/workfare)
On effect of current interventions on child
malnutrition
No evidence on impact of provincial
council programmes
Little understanding of impact of
macro/aggregate shocks on vulnerability
Policy Directions
4 key areas:
 Address chronic
poverty
 Help the poor escape
poverty
 Address individual
vulnerability
 Address aggregate
vulnerability
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Target assistance
better and reduce
work disincentives
Safety “ropes”—
educn. & empl.
Strengthening social
welfare and care
services
Scale up response to
aggregated
vulnerability
Policy Directions
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Address chronic
poverty
Help the poor
escape poverty
Address individual
vulnerability
Address aggregate
vulnerability
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Improve targeting of
programme with PMT,
introduce exit/incentive
policies
Increase benefit level
(without compromising
work incentives and fiscal
sustainability
Improve fiscal,
administrative and
targeting efficiency by
consolidation of disability
and other cash payments
under the Samurdhi
programme
Policy Directions
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Address chronic
poverty
Help the poor
escape poverty
Address individual
vulnerability
Address aggregate
vulnerability
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Consider
conditional cash
transfers to reduce
school nonattendance and
child malnutrition
Promote access of
poor through skill
development and
access to microfinance
Policy Directions
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Address chronic
poverty
Help the poor
escape poverty
Address individual
vulnerability
Address aggregate
vulnerability
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Strengthen delivery of
social welfare and
care services through
public-private
partnerships
Implement national
disability policy
focusing on raising
awareness/reducing
stigma, preventing
disability, and
including disabled
people in socioeconomic activity
Policy Directions
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Address chronic
poverty
Help the poor
escape poverty
Address individual
vulnerability
Address aggregate
vulnerability
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Develop a package of
interventions:
cash/livelihood grants,
workfare and social welfare
and care services, to be
scaled up in case of
disasters
Strengthen relief for
conflict affected groups
• Reintegration of
demobilised soldiers
• Attend to special needs of
children and youth
• Rehabilitation of schools,
roads, essential
infrastructure (public
works)
Samurdhi Reform and the Welfare
Benefits Act No. 24 of 2002
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Main thrust of the act is to
• Limit programme to bottom 25-27 percent of population
(900,000 hhs)
• Better accuracy in identifying poor
• Making transfer more progressive
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Eligibility
• PMTF, eligibility checked every 1-3 yrs
• All homeless hhs (1.3% of applicants) included
• Exit mechanism to be devised
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Benefit
• Variable component for children and aged
• Rs. 830 per hh, up from Rs. 320 per hh
• De-linked from saving and insurance
Safety Ropes: suggestions
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Conditional cash transfers
• Targeted to 5-6 year olds and 11-14
year olds
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Microfinance for the poor
• Strengthen regulatory framework to
ensure security of deposits and probity
of microfinance organisations
• Knowledge gap: impact of microfinance
on poverty (poorest)? What works best?
• Combine with workfare?