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Social safety net is affordable, says bank

Plans to upgrade Asia's inadequate social protection systems reporter, Manila

November 27, 2012

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Social protection in most Asian countries falls far short of meeting the needs of the poor and vulnerable, even though better safety nets are affordable for poorer countries, according to a study by the Asian Development Bank (ADB).  

In a statement released today the ADB said despite high economic growth in much of the region, public spending on social protection in Asia and the Pacific is lower than in any part of the world except for sub-Saharan Africa. 

The bank says recent economic and financial crises, food and fuel emergencies, and the increasing frequency of natural disasters have starkly exposed the inadequacy of the region’s national social protection systems to guarantee a minimum level of subsistence and meet people’s basic needs. 

The study -- Asian Development Bank: Social Protection Strategy -- found convincing evidence that social protection programs, especially well-designed safety nets that transfer resources to the poor, can reduce the depth and severity of poverty and inequality. 

“Governments around the world tend to scramble to adopt social protection programs in times of crisis,” says Vinod Thomas, director-general of Independent Evaluation which conducted the study for ADB. “But comprehensive systems built in stable years are much more effective."

Widening wealth gaps are also drawing attention to the need for greater social protection in Asia, where income disparities over the past two decades have widened in 11 countries that account for more than four-fifths of the region’s population, the study said. 

All countries spend on the poor in some form or another, although there are considerable country variations in the levels and effectiveness of the spending. Concerns over the cost of universal social protection are deterring some countries, but well-targeted safety nets are not prohibitively expensive, the study said. 

In the Philippines, for example, the government’s conditional cash transfer (CCT) program to uproot extreme poverty costs less than 0.5 percent of the country’s gross domestic product, yet it reaches 15 million people. 

The program makes regular cash payments to mothers conditional on their children attending school and public health clinics.

The study noted that after just three years of implementation, there have been positive results on elementary education school enrollment and beneficiary households spending more on the health and education of their children. 

Activists, however, disagree. 

Youth group Anakbayan today expressed fears that the government's CCT program may be used to buy votes for administration allies in the 2013 elections. 

With a proposed budget of more than P40 billion (US$1 billion) in 2013, Anakbayan also said the “fake anti-poverty program” is turning into “a milk cow for politicians, administration allies and bogus NGOs.”

The government's own Commission on Audit recently criticized the CCT program, saying some of the beneficiaries were not actually poor and that billions remain unliquidated. Unnecessary and extravagant purchases were also recorded, such as the purchase of high-end phones for “monitoring” purposes. 

Despite the hike in the CCT budget last year, the government body also noted a decline in the number of beneficiaries of the program.  

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