Safety Nets And Extreme Poverty
Social safety nets don’t handicap economies, they save lives and provide continued opportunities to grow out of poverty
“Ending extreme poverty in all its forms” is no longer a platitude or a dream for development experts – it’s the guiding vision of the United Nations High Level Panel, as well as an achievement that’s closer to being realized than ever before, thanks to the millennium development goals.
One of the best tools we have to this end might surprise you. Education matters, of course, as does higher employment and better health care. But for us, it’s clear that the increased, global scope of social safety nets will make the most vulnerable of populations more resilient. We need these to end extreme poverty.
“Social safety nets” are programs designed to provide a floor of protection to the poor and to cushion them from shocks, and they help reduce overall poverty. These transfers can come from the state, donors, NGOs, or the private sector, and they run the gamut, including cash, food, and fee waivers for healthcare or schooling.
Social safety nets are cost-effective insurance against the risks that could derail many other developments around the world, in areas like health, education and food security. These protection programs help ensure that a family with some income doesn’t fall back into extreme poverty when a husband unexpectedly falls ill, or when drought destroys two-thirds of the family’s crops or harvest, or when food become otherwise unaffordable because of a sudden global spike in prices. Social safety nets guarantee that a family can continue to send their young daughter and son to school in spite of any economic, climate or health-related shock.
These programs come in many shapes and sizes and can be tailored to fit a country’s context and needs: there are right models for Ghana, Mexico and Norway, though they might be very different. Some act as a general support system for those on the brink of poverty, while others target specific populations with more narrowly defined needs.
While they do require sometimes significant resources, these systems are not confined to countries on the middle and upper ends of the income scale. Rwanda has attributed a 12% decline in poverty since 2006, in large part to its Vision 2020 Umurenge Program which prominently features public jobs programs and cash transfers. In 2011, The temporary boost to Ethiopia’s Productive Safety Net Program saved lives during severe drought and famine. Both Kenya and South Africa go so far as to include the right to social protection in their constitutions.
The benefits from these programs can accrue to the state as well as its citizens. Effective and targeted social safety nets can ease the transition away from inefficient, costly general subsidies. Many countries can reform fossil fuel subsidies, for instance, which often do not reach the most vulnerable populations and impose large fiscal burdens, and then turn toward more specialized social safety net programs, which can function as a key component of medium- and long-term stability.
New technologies mean that states can craft their programs to help specifically the most vulnerable populations, and that they can do so efficiently. The widespread use of mobile phones, analytics and biometric technology lets a country implement social safety nets with far greater speed and efficacy than previously imagined. The government of India was able to enroll 200 million people in a national biometric ID effort in less than two years, modernizing a vital system that provides the poorest of the poor with food assistance, education vouchers and job opportunities.
Finally, beyond the moral argument, social safety nets make fiscal sense. The United States spent over $35bn on development investments last year to help the poor help themselves. It only makes sense to spend a fraction of this amount on a sustainable, systemic approach: better to provide a family with continued opportunity improve their conditions – through work and school – than to risk the collapse of whole neighborhoods and cities of families who could not rebound from dangers out of their control, like economic downturn and natural disasters.
The fight to end extreme poverty means ensuring that those who are lifted just over the brink – including the more than 600 million people who moved out of extreme poverty over the last decade – are resilient enough in their income, health and food security not to slide backward and take their families with them. Smart social safety nets can provide that security, guaranteeing that no matter how unpredictable the future, it won’t undo decades of development, upward mobility or the lives of countless people.