Reaching the Poorest through Strengthening the Social Safety Net System in Pakistan

Synopsis

Supported by IDA’s technical assistance since 2009, Pakistan has established the Benazir Income Support Program (BISP), a flagship national safety net system, which is one of the largest in South Asia. The program currently provides income support in the form of predictable monthly cash transfers of US$15 to almost 4.8 million families (approx. 18 million people) of the poorest households for consumption smoothing as well as investments in human capital development. Up to the present time more than US$ 2.9 billion has been disbursed to BISP beneficiaries out of whom 93% of beneficiaries receive the cash transfers through technology based payment mechanisms (Debit Cards, Mobile Phones, Smart Cards). The program plans to reach 5.5 million families in the next financial year.

The program has successfully established a National Socio-Economic Registry (NSER) through the use of an objective targeting system, hosting a database of more than 27 million households (approx. 167 million people) – the first in South Asia. More than 30 federal and provincial social sector programs are currently using the Registry to improve their pro-poor targeting performance. BISP has also rolled out the Co-responsibility Cash Transfers (CCT) program, linking cash transfers to primary school education, which is being implemented in 32 districts in all provinces and regions. After a successful pilot in 5 districts, enrolment process is currently underway in 24  districts. To date more than 726,000 children have been enrolled in the program out of which over 329,000 children have taken admission in schools.

Challenge

A significant proportion of Pakistan’s population either lives in extreme poverty or is vulnerable to falling into poverty due to any adverse natural or idiosyncratic shock. Before the start of BISP in 2008, the country’s main safety net programs (i.e. Pakistan Bait-ul-Mal, and the Zakat) had limited coverage and were poorly targeted, as around 25 and 32 percent of resources distributed by these programs respectively, were going to non-poor households. Additionally, administration arrangements were inadequate, and implementation and monitoring and evaluation capacity were very weak. Consequently, these programs had little impact on addressing the issue of poverty and vulnerability. The sector also faced fragmentation of various federal and provincial level initiatives due to absence of a platform or credible system, which could support their consolidation. The country’s spending of 0.16% of GDP on the safety nets was also lowest in the region.   

Approach

In order to address the above challenges, the Government of Pakistan launched the Benazir Income Support Program (BISP) during the second half of 2008 as its flagship national social safety net initiative. The short-term objective of the program was to cushion the adverse impact of the food, fuel, and financial crisis on the poor, but its broader objective was to provide a minimum income support package to the poorest and to those who are highly vulnerable to the future shocks. Since 2009, the World Bank’s Social Safety Net Project is supporting BISP in establishing an objective targeting system, strengthening the program operations, and putting in place control and accountability mechanisms for transparent delivery of services to the poor. This represents a shift from poorly designed and administered programs to building blocks of a national safety net system with a focus on creating institutions and initiatives capable of delivering tangible results.

Results

• Establishment of a National Socio-Economic Registry for harmonizing social protection initiatives both at the federal and provincial government levels. More than 30 federal and provincial organizations are already using this registry to improve the pro-poor orientation of various social sector programs.
  
  
• Empowerment of women by providing them access to the National ID cards and making BISP payments to female head of the beneficiary families, enhancing their ability to take decisions on the use of cash transfers. Since the introduction of BISP, the female registration of Computerized National Identity Cards (CNICs) has almost doubled, which can potentially open avenues for their socio-economic and political empowerment.
  
  
• Improved transparency and efficiency of the program with more than 93% of the current 4.8 million beneficiaries of BISP being paid through technology based mechanisms, offering even the poorest women access to branchless banking accounts for the first time ever in their lives (more than 90% beneficiaries collect payments within 72 hours of disbursements).
  
  
• Advancement of human capital development through a scale up of a Co-responsibility Cash Transfers (CCT) program in 24 additional districts after a successful pilot in 5 districts, linking cash transfers to primary school education while incentivizing admission of children of the poorest households out of which nearly 50% are girls.
  
  
• Control and social accountability standards have helped in improving credibility and refining program implementation through third party monitoring systems such as spot checks, process evaluations, impact evaluations and a comprehensive case management system (CMS). The CMS is further enhanced through the inclusion of a Social Mobilization, Accountability, Reporting and Tracking (SMART) structure at the community level by using “mother groups” that are being created to support the CCT program for primary education. These groups will be linked directly to government offices to ensure sustainability beyond project life.

Link to MDGs

• Eradicate extreme poverty and hunger
• Promote gender equality and empower women

Bank Contribution

The World Bank supported the BISP, initially through Social Safety Net Technical Assistance Project (US$60 million) approved in May 2009. Based on the successful implementation of the project, a Restructuring with Additional Financing (US$ 150 million) was approved in March 2012, which introduced Disbursement Linked Indicators (DLIs) to incentivize performance on results. The SSN project was complemented through a Bank executed Trust Fund TA being financed by the DFID to help the government in further development of SP systems and their wider application at the federal and provincial level. The existing TF was established in 2013 with an allocation £9 million till 2021.

Partners

The World Bank continues to play a lead role in donor coordination for SP and leveraged more than US$ 1.4 billion of other donors’ investment in BISP. In 2009, the UK’s Department for International Development (DFID) approved a World Bank-managed trust fund to support the test phase of the Poverty Score Card and to set up the initial organizational and operational arrangements for implementing the BISP. Following support from the World Bank, other donors such as the Asian Development Bank and the US Agency for International Development also provided US$150 million each to finance cash transfers to beneficiaries identified through the Poverty Score Card targeting system. The partnership between World Bank and DFID further continued with approval of £300 million of DFID’s 8 years (2012-20) support to Pakistan’s National Cash Transfer program by using a common framework with the WB. In 2013, ADB has also approved US$ 430 million with major proportion of financing going to expansion of the coverage of basic cash transfers to eligible families.

Moving Forward

The Bank stays committed to support the Government of Pakistan in advancing the social protection agenda as part of its on-going economic and subsidy reforms, which insulate the poor from any adverse impacts by providing income support as well as access to human development. The federal engagement will continue to focus on SSN system development agenda through, among others, update of the National Socio-economic Registry and scaling-up of the CCTs encouraging federal-provincial partnership. The provincial engagement will support the reforms in existing pro-poor initiatives by capitalizing on the federal SSN systems for effective service delivery to the poor and aligning investments in the complementary areas to allow the poor to graduate out of poverty.