More than half of world’s poor out of safety net coverage, says World Bank

Despite the growing number of social safety net schemes to improve lives of the poor, it is still a distant dream for the almost half of the world’s poor to come under it. According to a recent World Bank report, nearly 55 per cent of the total world’s poor population is still out of its coverage. The poverty is rising in urban areas at a rapid pace.

According to report that was released on July 7 and titled “The State of Social Safety Net 2015”, 773 million people (which constitutes 55 per cent of world’s poor population) are in acute need of social safety coverage. The three quarters of the poorest people in lower-middle countries, and more than one-third of the poorest people in middle-income countries lack safety net coverage and remain at risk.

According to a press release, the report endorses the goal of universal access to social protection which includes safety nets by 2030.

The safety net programmes include cash and in-kind transfers targeted to poor and vulnerable households, with a goal of protecting families from the impact of economic shock, natural disasters and other crises.

The report is second in a series of studies that monitor and report on the growth and coverage of social safety net in developing world, highlight promising innovations and review important policy and practical developments in this area.

According to report, all five biggest social safety net programmes are in middle income countries, which include India, China, South Africa, and Ethiopia which covers 566 million poor people.

India’s job guarantee programme, Mahatama Gandhi National Rural Guarantee Scheme, is the world’s biggest social safety net programme.

In low-income and lower-middle-income countries, social safety nets cover only 25 per cent of the extreme poor, compared to 64 per cent in upper-middle-income countries. In Sub-Saharan Africa and South Asia, where most of the global poor live, social safety nets cover just one-tenth and one-fifth of the poorest 20 per cent of the population, respectively.

Coverage of the poorest in urban areas, where an estimated 863 million people live in precarious settlements, also remains a challenge. Poverty is urbanising at a rapid pace, says the report.

It also highlights that cash transfer schemes constitute 50 per cent of the total social safety net programmes. Many countries are rapidly catching up these schemes. In 1997, it was only two countries which adopted conditional cash transfer scheme which now increased to 64 countries.

The report strongly argues that conditional cash transfers scheme is one of the best way to reach out to targeted population. The report cites example of conditional cash transfer programmes in Latin America, such as Bolsa Familia in Brazil and Prospera in Mexico and more-recently established programmes in Asia, such as the Pantawid in the Philippines.

The report also argues against unconditional cash transfers which are not much effective in comparison to conditional cash transfer. It further highlights the need to improve the efficiency of social safety net programmes to timely reach out targeted population.