What's wrong with the conditional cash transfer program?

Or three reasons to do it differently

The Asian Development Bank is loaning the Philippine government $400,000 million to implement it’s conditional cash transfer program, known as the Pantawid Pamilyang Pilipino Program (4Ps). The conditional health and education cash grants will be provided to poor households by the DSWD, to mothers and/orpregnant women of eligible households, who will receive the cash grants for up to 5 years subject to the eligibility criteria and compliance. Transfers are paid quarterly, directly into women beneficiaries' accounts established in the Land Bank of the Philippines. The 4Ps includes two types of transfers: one related to health and one to education.

Poor households with children 0–14 years old and/or pregnant women are eligible for a health grant currently set at P500 per household per month (for 12 months per year). The conditionalities are: (i) all children 0–5 years old attend the health center to obtain services established by the Department of Health (DOH) according to their age, including immunizations; (ii) pregnant women attend the health center according to DOH protocol, including delivery by skilled personnel and postnatal care; (iii) children 6–14 years old comply with deworming protocol at schools; and (iv) the household grantee (mother) and/or spouse attend family development sessions at least once a month.

Poor households with children 6–14 years old are eligible for the education grant. The education transfer is P300 ($7) per child per month (for 10 months per year), for up to a maximum of three children. Beneficiary households will receive the education transfer for each child from 6 to 14 years of age as long as they are enrolled in primary or secondary school and maintain a class attendance rate of at least 85% every month.

Eligible households can receive both the health and education grants. The average transfer per household is estimated at 23% of the average annual household income.

So far it sounds so good. But let’s analyze the package and the conditional cash transfer instrument further.

Firstly, this is a loan being borrowed by the government to be repaid over a twenty five year period, i.e. a debt that burdens future generations. Furthermore, this is a high interest ADB loan, a part of the ordinary capital resources loans, which charges near market interest rates. The ADB also provides Asian development fund loans, on concessional rates and grants (as opposed to loans) to developing countries. The government and it’s negotiating team should not borrow loans at market rates for such a program, but demand that the ADB provides the government with grant funding instead. If the ADB wants to assist us with our social programs and wants to strengthen the country’s social protection system, let it provide us grant funding – ‘free’ money – instead of loans, especially non-concessional loans, that only serve to increase this country’s debt burden.

The government negotiators should stand firm on this. If the Philippines does not qualify for grants, then insist on changing the terms with the ADB and other international finance institutions.

The country’s historic national debt and the automatic debt appropriation law that sacrifices the budget to loan repayments, should make the government more circumspect. The government should apply the utmost caution in negotiating more burdensome loans.

Secondly, even the ADB admits that the “ Key causes of poverty in the Philippines include high inequality and chronic underinvestment in physical and human capital, especially health and education. As a result, the Philippines is lagging on progress in non-income MDG targets for universal primary education, maternal mortality, and access to reproductive health services.” International donor agencies are in a mild panic as they face the prospect of countries not being able to achieve the less-than-minimum millennium development goals or MDGs. They will pressure us to recklessly get into debt to borrow to try and meet these targets. But this also provides us with an opportunity – to be firm and negotiate conditions that benefit the country in the short and long run. Also, if the new President and government has political capital in the eyes of the international community, why not use this to extract grants, rather than loans.

Thirdly, these conditional cash transfers are short-term measures – essentially anti-crisis measures – to mitigate risks and negative impacts. Therefore borrowing and getting into debt for short-term impacts is short-sighted and even reckless. We need long-term solutions. This means we must increase investments, starting with the national budget, on health and education.

The government should immediately double the national budget on health and education. The Philippines spends only around 6.4% on health as a percentage of total government expenditure, compared to our neighbour Thailand, for example, that spends 11.3%, or China with 9.9%. (UNDP 2009)

A longer-term measure is to provide universal health care and education. The problem with the poverty targeting instruments of the ADB and other IFIs is that in the name of targeting the ‘poorest of the poor’ it effectively excludes large sections of the poor (also referred to as ‘low-income’) thus depriving them of their fundamental and inalienable human right to a decent education and healthcare. Several countries in our region provide universal healthcare, such as Vietnam, which is already ahead of several of its MDG targets, Malaysia, Thailand and the two countries with the largest populations in the world, India and China. So why not us? Let us once again place this issue on the agenda – universal health care for all.

Finally, we need to once again raise the issue of repealing the automatic debt appropriation law. This is fundamental to increasing social investments and addressing structural inequalities that prevent the poor from accessing affordable and quality health care and education.

Disaster Management

The Case of New Zealand, Haiti and the ‘Cuban way’

By Reihana Mohideen

Comparisons must be made between the impact of the earthquake in New Zealand and the quake that hit Haiti in January and the nature of a global system that harbors these inequalities should be exposed over and over again. Haiti – a population of around 9 million -- some 250,000 people died in the earthquake and (according to government figures) 200,000 were injured and one million were made homeless. Some eight months later disaster still grips peoples lives. Fortunately, but in a staggering contrast, no lives were lost in New Zealand, although the earthquake was of a similar magnitude (7 on the Richter scale).

New Zealand’s building codes set a world standard in seismic building regulations and are incorporated into the building codes of several countries, including the Caribbean Uniform Building Code. Haiti, on the other hand, had no known building regulations. According to a report provided to the Global Task Force on Building Codes by a member of a disaster risk management team that visited Haiti prior to the earthquake in 2009, Haiti reportedly has some building regulations, but they were not focused on building safety and were rarely implemented. Haitian civil engineers and architects said that any codes used for professionally designed and constructed private buildings would not be Haitian - but would depend on where that person studied (USA being most common). Donor funded buildings are usually built to a standard stipulated by the donor or by the professional in charge. The State University’s engineering curriculum did not have any substantive elements on building codes.

The Philippines is one of the countries most vulnerable to earthquakes and studies have found that the country’s school children are especially vulnerable due to sub-standard building construction. Tens of thousands of people could die, in Manila alone, from an earthquake of the magnitude that hit Haiti and New Zealand. The building industry is riddled with corruption, undermining the implementation of building industry safety standards and regulations. The urban poor, who are a significant proportion of the urban population, live in hovel-like structures that are assembled with flimsy pieces of card board, wood and discarded roofing materials, easily washed away by rains and typhoons. Typhoon Ondoy that hit the country in October last year, killing thousands and displacing tens of thousands of people, gives us a terrifying preview of what an earthquake could unleash.

But the problems faced by those of us living in Third World countries in coping with disasters goes beyond the inadequacy of building regulations. The basic problem is poverty. A glance at the UN’s ranking of countries based on its Human Development Index (a measurement of education, life expectancy and income) is an indicator of the problem. Haiti’s ranking is 149 to New Zealand’s ranking of 20 (out of 182 countries). Philippines ranking is 105. The massive numbers of lives lost in disasters is a direct result of poverty. The poor in the Third World are more vulnerable, including to climate-change induced disasters, than those in the industrialized countries.

However, even a poor country can take effective measures to mitigate the loss of lives and injuries if there is political will in government to prioritize protecting the lives of its’ people. If New Zealand sets the world standard with its seismically safe buildings, then Cuba sets the world standard on how a poor country can save lives during disasters. And the Cuban example has been acknowledged and praised even by those not partial to the Cuban revolution, such as the United Nations, which identifies Cuba as a case study in disaster risk management. Between 1996 and 2002, six major hurricanes hit Cuba killing 16 people out of the total 665 deaths in the affected countries. Hurricane Charlie killed four people in Cuba and 30 people in Florida. When Hurricane Ivan threatened Cuba, the country evacuated 1.9 million people, 17% of the population, over 15 days. All shelters were staffed with nurses, and doctors were sent to the high risk areas. Then President Fidel Castro went to the highest risk region to assist the effort. No one was seriously injured or killed as a result of the hurricane.

According to the International Secretariat for Disaster Reduction (ISDR), the United Nations body that focuses on disaster reduction, “the Cuban way could easily be applied to other countries with similar economic conditions and even in countries with greater resources that do not manage to protect their population as well as Cuba does”. The ISDR says that Cuba is an example that the vulnerability of people can effectively be reduced with low-cost measures and strong determination. According to the ISDR the Cuban authorities are determined to implement disaster reduction policies in Cuba. “It is part of their development planning and their culture, which play a key role in saving lives and livelihoods. This illustrates the importance of a strong political will … Leaders of countries around the world have at their disposal the knowledge needed to reduce risk and vulnerability to hazards. Even poor countries are not entirely without options to mitigate or prevent the consequences of hazards. What is often lacking are concrete programs of action and the political will to implement policies and measures.”

This Cuban “political will”, however, does not emanate from particular individuals or even governments. The “Cuban way” is the logic of a society – an entire social, economic and cultural system – that places human beings and their needs as its central and fundamental priority. Cuba’s economy and society are based on socialist principles prioritizing people before imperialist profits resulting in the highest levels of human solidarity and culture. Haiti, in contrast to Cuba, tragically and despite it’s heroic and historic struggles against colonial slavery, has been exploited for decades by imperialism, which has intervened in it’s political affairs with impunity, supporting coups and organizing military interventions to overthrow pro-people governments, a history that we in the Philippines are familiar with as a result of our own semi-colonial relationship with and dependence on the United States.

The Cuban government is unique in that it has paid an equal amount of attention to the structural and physical aspects of disaster preparedness, but has also created a “culture of safety” through successful education and awareness campaigns. The ISDR points to education as one of the main reasons for the low level of hurricane mortality rate in Cuba compared to its neighbors. Disaster preparedness, prevention and response are part of the general education curriculum. People in schools, universities and workplaces are continuously informed and trained to cope with natural hazards. From their early age, all Cubans are taught how to behave as hurricanes approach the island. They also have, every year, a two-day training session in risk reduction for hurricanes, complete with simulation exercises and concrete preparation actions. This facilitates the mobilization of their communities at the local level when a hurricane hits Cuba. Cuba’s entire adult population is literate and therefore can access educational materials about disasters. The Cuban Red Cross, which provides teaching material, is reinforced by training courses and disaster drills for parents in the workplace, as well as by radio and television broadcasts.

There is an adequate road system in the country that facilitates speedy evacuation and building codes are enforced, which reduce the element of highly vulnerable substandard construction. Approximately 95 per cent of the households in the country have electricity and therefore can access information about disasters through radio and television. Most importantly the Cuban population is mobilized through a range of social, professional and political organizations in the country that provide structures that can quickly mobilize the entire population in disaster.

All these features of Cubas’ disaster management program are direct results of the gains of the Cuban revolution, which has created one of the most socially conscious, educated and politically organized and mobilized people in the world. We, in the Philippines, have much to learn from the “Cuban way”.