The 2008-11 global economic crisis highlighted the importance of good social safety nets for reducing poverty and vulnerability. Countries with effective safety net programs used them to respond to the crises and disasters, while countries without such programs had to rely on ad hoc and less effective responses. Yet it is precisely in the poorest countries where the gap in the provision of SSNs is largest. In Sub-Saharan Africa, for example, four out of five poor families have no access to any safety nets program.
However, it takes time and political will to build good safety nets. Crises or post-disaster situations are worst times to develop new safety nets. Effective and cost-effective programs need a process of refining and fine-turning systems and capacity. For countries that already have some programs in place the challenge is to overcome fragmentation, to integrate individual programs into coordinated, national systems. It is important to hold safety nets to high standards of governance and results – both to ensure that they provide the most effective assistance to populations in need, but also so that they keep the confidence of both policymakers and the public.
Building sustainable and affordable safety nets in each developing country is a key component of the Bank’s Social Protection and Labor Strategy 2012-2022, which aims to help countries move from fragmented programs to affordable social protection systems, enable individuals to manage risk and improve resilience by investing in human capital and improving people’s ability to access jobs.
The Bank works with countries to develop tailored tools and approaches; invest in knowledge, data, and analysis; provide “on-time” policy advice, as well as continuous technical assistance and capacity-building. The Bank supports a diverse set of safety net interventions, ranging from cash transfers to labor-intensive public works to school feeding programs. In low-income countries, the Rapid Social Response program is particularly instrumental in helping to address capacity constraints, provide demonstration of the success in developing effective delivery systems and in communicating results.
Safety nets globally are a strong force in reducing extreme poverty and achieving shared prosperity. Evidence from the new WBG ASPIRE database shows that, each year, safety nets in developing countries lift about 50 million people from absolute poverty (living on less than US$1.25/day). Unfortunately, these effects are smallest in low-income countries and fragile states, where the needs are greatest.
Major results of WBG support to safety net programs include:
- The safety nets portfolio from FY07-13 was just over US$12 billion, with 273 financing activities in 93 countries. The average annual commitment for safety nets during FY07-13 was US$1.72 billion, a threefold increase from US$567 million per year during FY02-07. Overall, US$9.2 billion, or 71 percent of the financing approved between FY07-13 was for member countries of the International Bank for Reconstruction and Development (IBRD), and US$2.6 billion, or 21 percent, for the poorest countries through the International Development Association (IDA).
- From FY11 to FY13, approximately 37.4 million new safety nets beneficiaries, including 20.6 million women, benefited from WBG support to SSNs. About 31.3 million of these beneficiaries were in IDA countries, while 6 million were in IBRD countries. A total of 1.5 million beneficiaries were in fragile and conflict-affected countries.
- From FY05-13, more than 2,000 practitioners received training through programs including the WBG Core Course on Safety Nets and the South-South Learning Forum series. Safety Nets Communities of Practice, peer-to-peer knowledge exchange fora are active in Europe and Central Asia, the Middle East and North Africa, Latin America and the Caribbean, and Africa, connecting practitioners from 30 countries and disseminating best practices.
Specific country results include:
- Bank support to Mexico’s Oportunidades (US$1.5 billion in FY09, US$1.2 billion in FY11), conditional cash transfer program benefits 6.6 million families; increases health, nutritional, and educational coverage and quality; and supports an increase in the number of children advancing from primary to secondary school and from secondary to high school.
- In Brazil, the Bank-supported Bolsa Familia program covers 12 million poor households (about 25 percent of the population) by providing monthly payments to families that send their children to school, meet vaccination requirements, and utilize health services. This program has been instrumental in reducing poverty and inequality in the country.
Ethiopia has achieved a huge progress in building national social safety net system. Ethiopia’s Productive Safety Nets Project (PSNP), one of the largest IDA programs, provides cash and in-kind transfers through labor intensive public works for able-bodied households, and direct support to the rest. The WBG has been supporting the program since FY05. The latest IDA operation was in the amount of US$130 million in FY10. Additional financing in the amount of US$370 million was approved in FY12. The program has reached 7.6 million people, or 8 percent of the Ethiopian population, so far. In 2011, the PSNP was scaled up to meet the additional needs sparked by the Horn of Africa crisis. On top of its core beneficiaries, PSNP reached an additional 3.1 million people with transfers over a three-month period. It has been leveraged to provide beneficiaries with financial services (through the Household Asset Building Program, HABP). The combination of interventions has amplified the program’s impact and resilience; one visible result of this increased performance has been a boost in beneficiaries' use of fertilizers and, as a result, the productivity of agricultural workers. This increased agricultural self-reliance, in turn, has helped to revive local economies and may continue to provide significant multiplier effects.
In Senegal, the Rapid Response Child-Focused Social Cash Transfer and Nutrition Security Project provided 55,323 with cash transfers over the life of the project. In addition, the project reached a total of 1.3 million children under 5 through the community nutrition program. Finally, almost 300,000 school children in primary education received weekly micronutrients supplements and deworming medication twice in a one-year period.
Tanzania’s Productive Social Safety Net (PSSN), implemented as the third phase of Tanzania Social Action Fund, was approved in FY12 for US$154 million. Its goal is to create a comprehensive and permanent productive social safety net system with CCT and public works components for the poor and the vulnerable.
In response to the food price crisis in Liberia, through the Food Price Crisis Trust Fund, the WGB supported a Cash-for-Works Temporary Employment Program, providing more than 680,000 days of employment to more than 17,000 beneficiaries. This trust fund provided US$3 million between FY09 and FY10. The program is now mainstreamed into social protection system for the country and the pilot led to another US$7.5 million IDA Crisis Response Window and Africa Catalytic Growth Fund project in FY11.This scaled up safety net project provided an additional 1.8 million days of employment for 45,000 beneficiaries.
Bangladesh’s recent operation, Safety Net Systems for the Poorest Project, takes the lead as the biggest IDA operation in terms of volume (for a single project). Its objective is to integrate and improve the equity, efficiency and transparency of the existing safety net programs. The project was approved in FY12 for US$500 million.
In 2008, Pakistan launched an extensive social protection program, providing cash transfers to the most vulnerable households. Within 10 months, the program provided cash transfers to 2.2 million families. By June 2012, Benazir Income Support Program (BISP) collected information on 7.15 million poor families out of which 4.2 million (about 15 percent of households in Pakistan) are receiving regular cash transfers.