Cash transfer may be the assistance the indegent need right now
Early data on the poverty impact of the coronavirus-induced coma of the economy, as Nobel laureate economist Paul Krugman characterises it, is rather alarming.
A survey by the Power and Participation Research Centre and BRAC Institute for Governance and Development on 5,471 poor families (including newly poor), presumably most, if not absolutely all, from the informal sectors in the urban space and rural areas finds about 80 per cent respondents lost jobs.
And those who still had jobs lost 50-90 % of their pre-coronavirus income, and the proportion of those who could afford three square meals a day has declined from 98 % to 73 %. Incomes of all poor normally plummeted 76 %.
And the majority of them have survived by cutting expenditures, drawing down savings and borrowing from families and friends.
The amount of diet declined 47 per cent in cities and 32 % in villages. Their stocks of food are fast running out and the jobs and income losses getting worse.
The newly poor constituted 35.3 % of the sample, which is apparently a purposive sample of poor households with the average family size of 4.85.
If that is a representative estimate of the national level impact, it means 14.3 million people have joined the ranks of the 40 million poor before coronavirus.
Only 14 per cent said they received government help, while 5 % said they were helped by the non-governmental organisations.
The poor people will not be able to fight the problem for long. The people in villages said they could sustain for 13 more days and in cities eight.
This is a time of existential reckoning for at least 55 million people.
A vast number of these face the spectre of hunger towards the end of April. They want assistance. Just how much and for how long?
The size of the assistance recommended by the analysis is certainly an under-response. They recommend spending Tk 5,600 crore for just one month to aid 38.2 million poor.
Poor families in villages, per their estimates, could run their families for Tk 6,600 a month, while those in cities need Tk 8,800. These are slightly below the lower poverty line national level estimates predicated on 2016-17 prices.
However, it may be thought of as compensating the increase in poverty gap and therefore a lot better than nothing.
Why the other 17 million poor are overlooked of the assistance programme, which would want another Tk 2,500 crore, is not quite clear. Surely, the Tk 2,500 crore cannot be the reason.
If the situation worsens, more assistance will be needed, according to Hossain Zillur Rahman.
The traditional relief of the government will never be enough to fight today's situation.
The federal government claims to have sufficient food. But, as another Nobel laureate economist Amartya Sen taught us many moons ago, food availability by itself does not guarantee access when persons are confronted with entitlement failures.
Whether the situation by the end of the month will be good or bad is determined by the restoration of entitlements lost by the indegent.
This involves quick actions predicated on various kinds of thinking. Social protection systems in 126 countries have previously introduced or adapted existing social protection and labour market policies with 505 measures.
There is a lot to understand from the responses. These measures attempt to ensure that no one is left out by this unprecedented crisis.
Leaving out 17 million is leaving out way too many, falling just a little short of different type of thinking.
It isn't possible toget through the pandemic abandoning so many adversely affected by home quarantines, the shutdown of non-essential businesses, and higher charges for food and basic goods.
Different type of thinking also requires forsaking models that do not work for the indegent. These include open market sales and the food-based transfer programmes.
The reason is basically. Both spread risk and the logistical challenges in the delivery of food are just a great deal to handle, given the scale and likely duration of the problem.
Media reports suggest that the incidents of pilferage in food distribution are much higher than officially recognised. Exhortations to keep up social distancing and keep carefully the distribution corruption-free are routinely disregarded.
It is advisable to expand social safety nets so that they quickly disburse more or larger assist with new and existing beneficiaries.
Currently, 1,300 new cash initiatives have already been introduced globally.
Delivering cash to the poor directly isn't necessarily tougher than delivering food. That is particularly true for Bangladesh where micro-finance programmes and NGO partnership in service delivery have played such a key role in what Wahiduddin Mahmud characterised as the "Bangladesh Development Surprise".
Transactions via mobile financial services have increased phenomenally since 2014.
There is absolutely no reason to risk social distancing at such an enormous scale every day in lots of different areas, including hotspots, when the complete country is declared to be at a high threat of coronavirus spread.
Social safety nets should be extended further to certain at-risk groups, including those in affected employment sectors, such as garments, transport, hotels and restaurants, shops, internal and international migrants etc.
These also include support for homeless populations, as planned in Bangladesh, subsidies that let utilities waive service fees for basic services, waivers for loans and other obligations, and coronavirus-sensitive public works.
Additional assist with the poorest prevents negative coping strategies, such as for example reducing food consumption or selling essential assets and help protect human capital.
Time-bound cash transfers to food-insecure households with children beneath the age of 2 mitigate the consequences of higher food prices and protect children's nutrition.
There is nothing in international data to suggest that cash transfers do not achieve the intended objectives much better than food transfers.
Within their recent book Economics of CRISIS, Abhijit Banerjee and Esther Duflo lay out the evidence.
What is clear from various country experiments is that cash transfers improve the share of the poor's total expenses that head to food; enhances nutrition and increases expenditure on schooling and health.
And cash transfers generally increase food expenditures as much as food rations.
We are in need of more of what works, not more of what does not work even in normal times. We don't need measures that undermine virus spread mitigation.
Cash transfers have a tested record in Bangladesh.
For instance, the government's cash transfer modernisation project under the ministry of social welfare administers the later years, widow and disability allowance programmes, reaching more than 6 million poor households.
Social distancing can be an added advantage that goes naturally with cash transfers.
Operationalising the national household database can ensure all vulnerable and poor households are registered and access benefits. POSTOFFICE cash cards can be used for the purpose.
The earlier we recognise the merits of cash transfers and the hazards of food-based programmes at this unprecedented time of distress for the vast number of people, the less time we waste.
Through the coronavirus mitigation efforts, we are trying to buy time at a very high cost to the economy, the indegent and the vulnerable specifically. We can not afford to waste it.
Nothing will better complement the spread of coronavirus compared to the spread of hunger.
Delivering food against 5 million ration cards to the indegent regularly until their livelihood systems are restored is an enormous challenge both from targeting and governance points of view.
The intent is laudable, but an equivalent amount of cash transfers will be relatively easier on both counts.
Government stocks are better used to keep food prices at the retail level stable by augmenting the stock of private retailers through sales at wholesale market prices when prices have a tendency to rise.
Enhanced government procurement of paddy from the farmers will hopefully help them progress prices from the millers aswell.
Public stocks so acquired is better used to augment the supply of rice in the wholesale market in order that the millers and stockers cannot use higher paddy prices as a justification to gouge wholesale rice prices.
Is the threat of widespread hunger overblown? Most of us hope it is overblown.
However, what we are observing on the streets nowadays all over the country is sufficient to warn that people can discount such a risk only at our very own peril. This is what I read on the wall. Not?
