Supporting Poor and Vulnerable Households During the COVID-19 Pandemic in Bolivia

Beneficiary Story/Quote

"I received a bonus during the pandemic. I used it to make biosecurity masks; I'm a craftsman. We couldn't go out to work, everything was paralyzed, we needed to invest and there was no access to the banks at that time, so it was very useful to buy supplies and keep on producing. I also used a part of the bonus to buy some food for my family."

Challenge

The onset of the COVID-19 pandemic in Bolivia, together with the stringent social distancing measures adopted by the country’s government to respond, caused substantial economic and welfare impacts, particularly affecting the poor and vulnerable. In Bolivia, where a 2018 survey had found that 80 percent of private sector workers worked in the informal sector and most of the population was vulnerable to income shocks, an urgent ramping up of social assistance was essential. The impacts of COVID-19 mitigation measures affected not only poor and vulnerable households but also large segments of the middle class who were self-employed in the informal economy. Bolivia’s social assistance programs, which included conditional cash transfers, social pensions, and disability benefits, were not designed to respond to sudden income shocks. The delivery system for social assistance was characterized by institutional fragmentation, with multiple beneficiary registries and cash payment systems.

Approach

The World Bank supported the provision of temporary economic support to poor and vulnerable households impacted by the COVID-19 pandemic by providing financial resources to implement

temporary cash transfers nationally and expand the use of an effective payment system. After the initiation of lockdown measures in March 2020, the Government of Bolivia (GoB) created three new temporary cash transfer programs: Bono Familia (BF), Bono Canasta Familiar (BCF), and Bono Universal (BU). The World Bank project financed BU and BF and provided analytical support in designing all the three programs. Together, these mechanisms were intended to provide economic support for households affected by the COVID-19 pandemic, with the combination of all three transfers ensuring that all households in the bottom 60 percent of the population received social assistance.

The World Bank teams provided timely and relevant technical assistance to the GoB during the project’s preparation. At the height of the pandemic, the World Bank played a key role in sharing the measures other countries around the world were taking to tackle the crisis. In April 2020, as part of project preparation, the World Bank team ran economic simulations to help the GoB fine-tune its response and ensure that it would reach the poor and vulnerable, as well as workers who might find themselves out of work. For instance, based on the simulations, the BCF was expanded beyond families with children receiving public education to also reach schools in the private sector with low-income students.  

Results

From April to September 2020, the project promoted broad-based and inclusive growth, specifically as it increased access to selected basic services for the poorest communities by temporarily expanding safety net coverage to cover informal workers unemployed due to the pandemic.

• The project financed temporary cash transfers to 3,502,421 direct beneficiaries, of whom 1,516,005 were women. Of these, 3,459,574 were not previously beneficiaries of existing social assistance programs and received temporary cash transfers under the Bono Universal. The other 42,847 direct beneficiaries financed by the project received temporary cash transfers under the Bono Famila.
• By project completion in July of 2021, Bolivia’s social protection system had been strengthened. The GoB successfully implemented a vertical and horizontal expansion of cash transfers to mitigate the adverse effects of the pandemic, creating conditions for an adaptative social protection system. It also created a registry for BU beneficiaries by gathering primary information from the national identification (ID) database and cross referencing it with other administrative databases, such as formal job and pension registries. This improved the government’s ability to reach populations not covered by social assistance programs in the future.
• During the emergency, the GoB successfully implemented a single payment system with access to a country-wide network of bank offices for all temporary cash transfer payments. The single payment platform reached almost all branches of private and public banks of the Bolivian financial system. It also achieved an unprecedented level of transparency in the execution of payments, as banks were able to verify the identity of beneficiaries by connecting the payment platform with the national ID database.

Bank Group Contribution

The World Bank provided $254.3 million in funding for the project, with $54.3 million provided through the International Development Association (IDA), and $200 million through the International Bank for Reconstruction and Development (IBRD).

Partners

Ministry of Economy and Public Finances (Ministerio de Economía y Finanzas Publicas MEFP). MEFP was was the project’s responsible unit and the Bank’s main government counterpart during project implementation.

National Agency of Electronic Government and Technology of Information (Agencia de Gobierno Electrónico y tecnología de Información y Comunicación) was responsible for the definition of the final list of beneficiaries of BCF and BU programs through database cross-checks.

Public Management Entity of Long-term Social Security (Gestora Publica de la Seguridad Social Largo Plazo) supported MEFP in managing the contract with SINTESIS for delivering payments.

SINTESIS, a private payment platform was used to pay the temporary cash transfers, ensuring prompt and transparent payments to beneficiaries. The World Bank worked in collaboration with members of the Group of Development Partners of Bolivia group to support the GoB strategy to mitigate the adverse effects of COVID-19 mitigation measures, particularly the French Development Agency (AFD) and the Inter-American Development Bank (IDB).

Looking Ahead

In January 2021, the GoB launched a new temporary economic support program following the design of the BU program, which was developed in collaboration with the World Bank.