جمهورية السودان رئاسة الجمهورية وزراة المالية والإقتصاد الوطني الملتقى الإقتصادي الثاني

1. جمهورية السودان رئاسة الجمهورية وزراة المالية والإقتصاد الوطني الملتقى الإقتصادي الثاني قاعة الصداقة 23 - 24 نوفمبر 2013م ورقة البنك الدولي

2. Social Safety Nets Lessons from Global Evidence and a Reform Agenda for Sudan Sudan Economic Forum Khartoum November 23/24, 2013 Dr. Qaiser Khan, Lead Economist and Sector Leader for Human Development; Social Protection & Labor THE WORLD BANK

3. Outline of the Presentation Introduction: Objectives and Spread of Social Safety Nets worldwide • Effectiveness and Efficiency of Social Safety Nets • Social Safety Nets as Part of a Social Protection System • Sudan’s Social Safety Net: Towards an effective and integrated Social Protection System

4. Introduction: Objectives and Spread of Social Safety Nets

5. Objectives of Social Protection: Resilience, Equity, Opportunity E

6. Objectives of Social Protection: Resilience, Equity, Opportunity

7. Social Safety Nets are a Sub-Set of Social Protection measures Social Safety Nets

8. Social Safety Nets are - Non-Contributory Transfers - Aimed at the Poor and Vulnerable- Regularly and predictably transferred

9. 2000 The Global Spread of Well-Designed Safety Net Programs

10. The Global Spread of Well- Designed Safety Net Programs 2013

11. Global Evidence on Social Safety Nets • Well-designed social safety net programs are: • effective, for a wide range of development objectives including the protection of the poor from economic and other shocks • efficient (e.g., in terms of fiscal costs and cost/ benefit) • For best results, socialsafety net programs need to be made part of systemic approaches to social protection. • For efficiency, modern social safety net programs need to incorporate innovations in design, especially in terms of beneficiary registries and electronic cash transfers.

12. 1. Effectiveness and Efficiency of Social Safety Nets

13. An effective Safety Net provides the foundation for a Social Protection System Step 1: Examples of Social Safety Nets: • Social Assistance through Cash transfers; • Temporary employment through Cash for Work; • Human Development Safety Net Programs through Conditional Cash Transfers (CCTs). Step 2: Towards a Social Protection System • Health Insurance for the poor • Youth Training and Employment Programs; • Access to Micro-Finance for the poorest

14. Evidence of Safety Net Effectiveness: Supporting Sustainable & Inclusive Growth Source: Alderman and Yemtsov (2012)

15. Evidence of Effectiveness of Safety Nets: Reducing Poverty/Inequality Each year, social safety nets in developing countries lift 50.3 million people from $1.25/day poverty • During period of introducing Conditional Cash Transfers (CCTs), per capita consumption increased by 30% in Honduras, 7-10% in Colombia, Mexico and Brazil • In Nicaragua, the CCT program reduced poverty by 5-7 % points; in Chile, Solidario reduced 35% drop in extreme poverty • BolsaFamilia in Brazil contributed 28 per cent of the fall in the Gini, 1995-2004

16. Evidence of Effectiveness of Safety Nets: Education Outcomes • In Bangladesh, elementary enrollment due to Food for Education increased 9-17% • In Colombia, secondary enrollment increased from 65% to 70% and rose 5-10% in urban areas • Early results from Malawi safety net program show an increase of re-enrollment rates among girls by 2½ times • In Turkey, girls’ enrollment increased by 10.7 percentage points for secondary, but only 1.3% for primary

17. Evidence of Effectiveness of Safety Nets: Nutrition Outcomes • In Mexico, 7% increase in calories, and families eating more and better. Also, significant impacts on child growth, decline in maternal mortality, rural infant mortality and lower stunting rates • Newborns whose mothers participated in the Colombia’s Safety Net Program in urban areas increased in average weight by 0.58 kilograms

18. Evidence of Effectiveness of Safety Nets: Employment • Mexico’s oportunidades program’s indigenous beneficiaries (especially women) had a 25% greater chance of better jobs • In Guatemala, beneficiaries of social protection program’s nutritional supplements had wages 46% greater than non- beneficiaries • In Brazil, labour participation higher in households receiving cash transfer, with strongest effects for women

19. Evidence of Effectiveness of Safety Nets: Coping with Crises • In Pakistan, the Benazir Income Support Program was established in 2009 mitigate the negative effects of the fuel and food price increases, providing today regular cash transfers to 5 million families. • Pakistan’sCitizen’s Damage Compensation Program provided cash transfers to 2 million families to mitigate the devastating effects of the 2010 massive floods. • In Ethiopia during the 2011 drought, the Productive Safety Net Program (PSNP) scaled up rapidly from 7+ million to 13+ million households, minimizing adverse effects. • Countries like Mexico and Indonesia used Cash Transfers to cushion the negative effects of Fuel and Food Price increases after reduction of subsidies.

20. Brazil’s BolsaFamiliacosts around 0.6% of GDP, Mexico’s Oportunidadesabout the same Evidence of Efficiency: Affordability Cost of SSN in Developing Countries is Mostly Around 1% of GDP Source: Fiszbein, Kanbur and Yemtsov (2013): “Social Protection, Poverty and the Post-2015 Agenda,” The World Bank

21. 2. Social Safety Nets as Part of a Social Protection System

22. The Challenge of Coverage Source: World Bank ASPIRE database 2012

23. Need to provide a portfolio of programs working together Work-ing age Youth Old age Pregnancy/ early childhood Childhood Oppor-tunity Equity Resi-lience

24. .. .Without fomenting fragmentation Multiple small, overlapping programs lower efficiency and effectiveness

25. Integrating Building Blocks of Social Protection Systems Program exit/graduation Beneficiary Registry Audit and control Transparent Payments Monitoring and Evaluation Participation, accountability & redress mechanisms

26. Technology and Service Delivery • SP programs use a wide variety of Information Technology for service delivery, for example to: • Enhance program effectiveness (identification) • Brazil’s cadastrounicois a unified registry for programs targeted at low income populations. More than 23 million families and 78 million people registered • India’s Aadharprogram aims to provide biometric IDs to every Indian citizen, as a foundation for social protection benefits • Increase efficiency (electronic transfers) • The Benazir Income Support Program (BISP) in Pakistan is currently delivering cash transfers electronically to 3.5 million women/families. • Because of the Benazir Income Support Program, more than 15 million women have received a National Identity Card, which lets them vote and access financial services.

27. Putting it all together • When building safety nets as part of social protection systems, the same investment in administrative systems and capacity can be used for most other social programs, improving efficiency and equity

28. 3. Sudan’s Social Safety Net: Towards an effective and integrated Social Protection System

29. Assessment of Sudan’s Social Safety Net • The Government of Sudan has increasingly acknowledged the importance of effective Social Safety Net programs in fighting poverty. • The Ministry of Welfare and Social Services (MoWSS) is in charge of Social Protection, with an institutional mandate to provide protection, prevention and promotion for the poor and vulnerable. • There is an array of programs and initiatives geared towards protecting the poor under several ministries and agencies. Coordination, collaboration and information about their effectiveness remains a challenge.

30. Assessment of Sudan’s Social Safety Net Under the leadership of the MoWSS, three Social Protection Programs emerge with potential: • The Zakat Chamber, an autonomous agency under the MoWSS, is the Government’s main social welfare agency targeting the poor through an extensive institutional system. • The National Health Insurance provides basic health insurance and is now expanding its services to more than one million poor. • The new Social Support program funded by the Ministry of Finance provides cash transfers to 140,000 families using the Zakat beneficiary lists (target 500,000).

31. Challenges of Sudan’s Social Safety Net • Selection of beneficiaries is based on a wide range of criteria, • Benefits are often too low to have an impact on the beneficiaries, • Payments a provided in a variety of ways, not always transparent. • Lack of effective monitoring and weak oversight capacity. • Weak coordination among the various social safety net programs implemented by government, semi-autonomous agencies, and non-government actors. • Temporary employment opportunities are absent from the menu of safety net interventions. Sudan’s existing social safety net system is largely inadequate to effectively respond to the effects of the Economic Reform Agenda on the poor and vulnerable population.

32. Sudan: Cost of Safety Net compared to Cost of Subsidies • Subsidies cost 2.8% of GDP (IMF) • Only 3% of fuel subsidies reach the bottom quintile while top quintile benefits from over 50%. • Cost of providing 150 per month to bottom 10% of households (about 800,000 households) would be 0.46% of GDP • Cost of providing 150 per month to bottom 20% of households (about 1.6 million households) would be 0.92% of GDP • Administrative costs and potential costs of beneficiaries outside the target group needs to added. Assuming this amounts to 30% of transfer costs – even the safety nets are extremely cost effective. • Even allowing for administrative costs this would be fiscally very cost effective compared to general subsidies. • Once a critical number of households receiving cash transfers is reached, subsidies can be phased out. The exact phasing would be a political economy decision specially reaching a critical number of households before actually phasing out food subsidies. Given the poor targeting of fuel subsidies they can go quickly.

33. The Economic Reforms need to be accompanied by a Safety Net Reform In the short term: • Scale up the MoWSS’s Social Support Program beyond the planned 500,000 poor families; • Increase access to Health Insurance for more poor families; • Create temporary Employment, particularly for Youth, through a Productive Safety Net approach. In the medium term: • Establish a coherent institutional structure with clear delineations of roles and responsibilities for policy development and program implementation; • Develop a Social Protection Strategy for the country; • Improve coordination and collaboration with Non-Government entities.

34. Urgent Measures for Sudan’s Safety Net Reform • Revise the targeting criteria and methodology used to identify the safety net beneficiaries • Establish a CommonBeneficiary Registry as a platform for social program coordination. • Develop effective payment procedures including through electronic payments to beneficiaries. • Establish an accessible appeals and grievance system for social safety net beneficiaries independent from service delivery institutions. • Strengthen controls, accountability and transparency of social safety net implementation with strong and independent governance structures. • Establish regular monitoring and independent spot checks of programs. • Carry out rigorous evaluation of the impacts of the main social safety net programs and subsequent adjustments of programs and policies.

35. Technical Advice based on international evidence and best practices, Analytical work South-South knowledge sharing For more information: Resilience, Equity and Opportunity: The World Bank’s Social Protection and Labor Strategy 2012-2022 www.worldbank.org/spstrategy Bank’s Possible Support