Money Matters

Social protection

Money Matters
By Kamran Hafeez
Mon, 05, 21

In March 2020, Pakistan faced one of its toughest decisions as it moved much closer to a full lockdown in its attempts to limit the spread of Covid-19 by breaking the chain of transmission through physical contact. With the government-ordered shutdowns in provinces, the entire country had been closed down with only essential services allowed to remain open. The lockdown was undertaken in stages with initially closure of educational institutions, restricted international travel, barred large public gatherings, but the number of people infected with the virus continued to spike sharply.

In March 2020, Pakistan faced one of its toughest decisions as it moved much closer to a full lockdown in its attempts to limit the spread of Covid-19 by breaking the chain of transmission through physical contact. With the government-ordered shutdowns in provinces, the entire country had been closed down with only essential services allowed to remain open. The lockdown was undertaken in stages with initially closure of educational institutions, restricted international travel, barred large public gatherings, but the number of people infected with the virus continued to spike sharply.

The graph had been depicting a much steeper rise in the number of confirmed cases, leaving the government with no choice but to lockdown the country. At the same time as in case of everywhere Pakistan witnessed the same debate over whether or not a total lockdown is justified. Both arguments were valid. Those worried about job losses and food security for the poor had opposed the demand for a lockdown, with Prime Minister Imran Khan supporting this viewpoint.

In late March 2020, however the government imposed a nationwide lockdown to try to arrest the spread of the disease. Although the threat of an uncontrolled outbreak had become too serious to ignore, the decision to lockdown came with so many other risks. Nearly 25 million Pakistanis, more than 10 percent of the population, held informal, daily, or piece-rate jobs that the shutdown would endanger. A country that had halved its poverty rate from 2000 to 2015 faced the possibility that poverty would increase sharply.

The government however recognised these perils and stepped up. Within days of the lockdown it announced unconditional cash transfers of 12,000 Pakistani rupees for food support to 12 million vulnerable households. This herculean task would rest with Dr Sania Nishtar, special assistant to the prime minister on poverty alleviation and social protection.

The EHSAAS programme would make extra payments to 4.5 million families that were already enrolled in a longstanding cash-transfer programme – Benazir Income Support Program (BISP) now renamed as EHSAAS, and another 7.5 million households would receive money through a new initiative, EHSAAS Emergency Cash. Under no circumstances was this easy. Such an initiative required multiple resources, new capabilities and cross-sector collaboration.

Pakistan’s population is spread out widely, with the majority living in rural areas. Dr Nishtar and her team worked with big private-sector banks and small businesses to establish cash-distribution points at more than 18,000 bank branches, shops, parks, and public buildings around the country. A digital system was built to process payment requests and to notify applicants of their eligibility. The team also worked with provincial officials, in a coordinated effort to design and roll out the EHSAAS programme.

In a recent interview to a global consulting firm McKinsey, Dr Nishtar highlighted the challenges they were faced with. “Many people were living on the brink, and then they went into an abyss, and it was my role to get them something,” said Dr Nishtar. “It was the most challenging thing I have ever done. There were 24 million breadwinners in the country who either earned a daily wage, were given piece-rate remuneration, or worked in Pakistan’s very large informal economy. When you multiply this number by the average household size, you’re talking about almost 160 million individuals, which is two-thirds of the country’s population. Life for these 160 million individuals basically came to a standstill within days of the lockdown because they’re earning on a daily basis. Imagine the household of a daily-wage earner. He or she brings home 500 rupees a day, and that’s all they have: to eat, to save up, to pay rent, to pay their electricity bill, to buy whatever is required if their kids go to school. And if that income gets cut off, they have nothing to fall back on. It was not just the daily-wage workers and the hawkers who were thrown out of work. It was also a whole range of blue-collar workers. There were throngs of daily-wage labourers who couldn’t even go back to their villages because of the suspension of interprovincial and intercity transport. They were in the big cities without work and with nothing to eat, just dependent on handouts. You could feel the tension, the deprivation on the streets of our major cities”.

The biggest challenge for such an ambitious programme was the limitation of resources in a country like Pakistan and to make it effective enough to reach the maximum number of vulnerable people. The programme however had a head start. During the year prior to when Covid-19 struck, EHSAAS had been working on building the infrastructure to roll out multiple programmes. As part of that effort, there was a major investment in the digital infrastructure of the programme. This was critical in helping effectively roll out EHSAAS Emergency Cash. This included the SMS-based request seeking mechanism, which had been tested with NADRA.

People sent their CNIC through SMS by mobile phone; the software would compare the CNIC with different databases to confirm eligibility. This had been possible through efforts towards cleaning up the previous BISP lists and removing 800,000 individuals from those lists. All this was done using data analytics, and based on an algorithm that linked their CNIC to a whole host of big databases. Another major transformation to ensure verification and limit potential leakages was the biometric payment-verification system. Individuals who were considered eligible were sent SMS messages asking them to go on particular dates to payment sites to collect their money. They would go and queue up, and when they entered their biometric signatures, they would be enrolled into the programme and be able to withdraw the money. The whole process still faced multiple challenges including SMS code generation, connectivity issues in far flung areas, liquidity issues, at times, because bank branches were not open everywhere, and cash movement from banks to small retailers, who then disbursed the money. There was however only a seven percent failure rate for biometric verification, which was also addressed. Data issues also existed with eligibility and people needed guidance. There was a major communication campaign through local languages on radio. Despite all such challenges Dr Nishtar and the project team continued to work day in and out on managing the issues with the banks, devising and changing various SOPs and getting necessary approvals to ensure not to breach government protocols despite this being an emergency. This meant organisational agility unheard of for government projects in the past and extensive stakeholder coordination and consultation with provincial chief secretaries and the bank management as well as other government functionaries.

The execution model was only able to deliver due to the immense efforts that the project team undertook in structuring the programme to utilise the resources it had worked hard over the last year to develop. Most importantly the payments infrastructure was put in place not only utilising the commercial banks branches and the ATMs but also the branchless-banking retailers, already part of the expanding microfinance domestic remittance network. Despite the lockdown, the suspension of transport, the security environment, the branchless-banking retailers were asked to open their shops and execute the EHSAAS programme through offering them incentives as commissions offered by microfinance banks thereby creating a true form of public-private-partnership.

The impact of the EHSAAS emergency cash transfers programme was huge. As per a recently conducted pulse survey, 93 percent of the money disbursed was spent on rations and food. This meant a huge social impact as this money was meant to be for subsistence.

As per Dr Nishtar, ‘’We were rolling out the biggest social-protection programme in the history of the country. We were aiming to reach half the households in Pakistan at a time of extreme uncertainty, when lockdowns were in effect, when curfews were in effect, when public transport was suspended. This was also a time when the spread of Covid-19 was a risk, so people were scared to come out of their houses. We were doing things that were completely new in a very difficult environment. We were taking huge risks along the way. All I can say is that it was a huge responsibility and it was deeply humbling.”

As we face the challenges of the second wave of the pandemic and with it the smart and micro lockdowns, we can only hope that we are not faced with another similar lockdown as we did last year. However, for the 12 million households that EHSAAS reached out to during the last wave it is their only hope in the face of poverty and the impact of what social protection may offer to the most vulnerable and needy.

The writer is a staff member