WB: New programs targeting impoverished groups to be introduced

• Source: Global Times
• [14:00 July 17 2009]
• Comments

Conditional Cash Transfers programme (CCTs), where qualifying families get money in exchange for commitments may help alleviate poverty for certain groups in China.

On July 15, the World Bank issued a research report called Conditional Cash Transfers, Reducing Present and Future Poverty, saying that CCTs will be a breakthrough point in achieving poverty reduction.

First started in 1997 in Mexico and implemented later in countries, such as Japan, Brazil, Ecuador, Jamaica, and Turkey, CCT programs offer qualifying families cash in exchange for promises such as taking babies to health clinics regularly or sending children to school.

Ariel Fiszbein, chief economist for the Human Development Network at the World Bank, said CCT programs help to reduce poverty in participating households who also tend to spend more on food and improved nutrients than comparable households who don’t receive the money transfer.

In Nicaragua, consumption by participating households accounts for 30 percent of the average expenditure, resulting in the poverty rate reducing five to nine percentage points.

The bigger the sum of CCTs is, the larger the influence it has on consumption, he added.

CCTs have also increased the use of education and health care services.

However, in order to insure the efficiency of targeting, a credible system of verification, monitoring and evaluating is essential.

At present, China’s social security system that covers rural and urban areas has been established, but pension, medical care and social assistance programs are supervised by different departments.

Gao Huajun, official of the Department of Minimum Living Security of Ministry of Civil Affairs, calls for the recognition of all related departments to establish an efficient evaluating system for CCTs.

Despite the advantages of CCTs, they are not the solution to all poverty problems, Ariel Fiszbein pointed out. They might not be applicable to an elderly poor population and children older than the age limit of the programs. Therefore, they should be supplemented by other money transfer programs such as social pensions or workfare to provide social protection to all vulnerable groups.