Replace ‘income support’ programme with ‘employment generation’ plan

The News

23-11-2009



By Dr. Sabur Ghayur

The “welfare” and “workfare” programmes are two important instruments of policy makers outreaching the poor and marginalised segments of the population in times of distress.

Termed as important components of social safety nets, it is quite common for governments of poverty stricken regions to recourse to such programmes at the time of need, for economic development and improving the lives of the societies’ underprivileged.

A variety of governmental programs designed to protect citizens from economic risks and insecurities of life have been experimented in a number of developing countries. Such programs mostly provide financial assistance to beneficiaries; however, they also contain certain positive and life changing conditions. Such as, the beneficiaries of these programmes have to enrol their children in schools etc.

Bangladesh launched a targeted food rationing programme in 1993. It was later replaced with food for education programme, which provides a free monthly ration of rice or wheat to poor families if their children attend primary school. Poor households are provided monthly 15 kg of rice per child with a maximum of 20kg, if all the children of a family are enrolled in primary schools. The goals of this program are to increase primary school enrollment, promote attendance, reduce dropout rates, and enhance the quality of education.

Progresa – a social assistance program in which cash is transferred to poor households was introduced in Mexico. Federally designed and implemented cash transfers were conditioned with: (i) enrolment of children aged 6-17 years in schools, and ii) regular visits to health centres with full attendance at information sessions.

The workfare programmes (WFPs) have come into existence in response to the crisis of unemployment and poverty having cropped up in recent times, due to macro-economic instability or climatic disasters owing to global warming. Such programmes were introduced in different regions under different circumstances. For example, South Korea in response to the Asian financial and economic crisis of 1997-98, north-east Brazil due to the prolonged drought that destroyed it in 1998, and in Argentina, where in 1997 unemployment had reached 18 per cent because of recession.

In our neighbouring country India, the Maharashtra state was first to guarantee statutorily to the principle of “right to work”; making employment an entitlement for everyone to empower the poor living in slums. The Maharashtra Employment Guarantee Act was enacted in 1979. In 2004, the then newly elected government launched the national rural guarantee scheme, initially in 150 districts and then later covering the entire country.

Successful workfare programmes have been found to be linked with citizens earning low wages in mostly poor countries of the world. However, it has been witnessed that when market wages fall, programme wages are also reduced. Like in the case of Argentina’s trabajar programme, where low wages were paid to the rural population on the basis that it was just a form of economic assistance only and not a hefty remuneration amount. In Korea, the programme wage was set slightly below the market wage for unskilled labour. The programme in Brazil also paid benefits below the minimum wage.

Pakistan also has various welfare or social security programmes aimed for the betterment of the unemployed or poor people. Many of these programmes announced have found later to be either abandoned or replaced with others. The “guzara” (sustenance) allowance and permanent rehabilitation programs under Zakat have been in place for decades; reaching over a millions of families. In addition to this, cash transfer, individual financial assistance, food support and vocational training programmes are reaching over a million needy and destitute through the Pakistan Baitul-ul-Mal (PBM). Further, there is the wheat subsidy and the mid-day meal for school students under Tawana Pakistan programme, however this has been dis-continued. Except the programmes under Zakat, the rest are funded through budgetary allocations, on many occasions based on foreign loans.

The People’s Party government launched a rather ambitious income support programme in August 2008, targeting 3.5 million households in its initial year of inception. With a huge financial allocation of Rs.35 billion, the funds for Benazir Income Support Programme (BISP) have been doubled for the current fiscal year. The international financial institutions are the major providers of funds, in the form of loans for this particular programme. While not denying the need for a well prepared social safety net programme, one is really astounded by the ease with which such an uneconomic, unsustainable and ineffective programme has been launched and that too on borrowed money.

A look at the current employment and labour market situation lands us into a rather discomforting situation. The signs emanating from the labour market are alarming. The economic side is exacerbating at a fast rate. Rapid depleting regular employment has become a norm. The unemployed workforce escalating at a swift pace is being confronted with absorption difficulties. Furthermore, those employed; a large proportion of them have to be satisfied with such working environments having longer hours of work, lesser remunerations with an overall poor working conditions. Females and the youth are the most disadvantaged segments of the society as poverty and unemployment are fast engulfing them, even though many of them are educated and skilled. Unemployment and poverty are fast returning and surging the economy.

Indeed the current situation, besides other interventions deserves a well designed and implemented workfare programme. A mechanism of WFP that can provide a guaranteed wage employment for 120 days can be worked out rather easily. The pubic sector development programmes (PSDPs) do contain huge allocations for a large number of smaller projects, many of them related to infrastructural development. These need to be linked with an employment generation programme (EGP) primarily for the rural areas and slums. The citizens’ community board is to be consulted, as well as local bodies involved with the national and provincial parliamentarians in the design and monitoring of the programme, along with other schemes. The activities that can be undertaken under the EGP may also include: (i) soil conversation and development, (ii) developing waste lands, (iii) water conservation, (iv) minor irrigation, (vi) flood protection, (vii) improving water courses, (viii) brick-lining of canals, (ix) supply of clean drinking water, (x) electricity, (xi) building of streets, (xiii) horticulture, (xiv) forestation, and (xv) roads building and maintenance.

Whereas, diversion of financial resources from the Benazir income support programme can be the immediate source of funding, whereas, levy of EGP tax on motor vehicles, all non-food and non-oil imports and a rise of GST by 0.5 per cent would be the other sources of funding. Furthermore, the international financial institutions can also provide financial assistance to meet their goal of poverty reduction.

As far as the much broadcasted BISP is concerned, it should not be discarded. In fact, it should be amalgamated with the Pakistan Bait-ul-Maal and Zakat but with significant reforms in the governance of these institutions.

The introduction of the employment generation programme, owing to the worsening labour market situation and large infrastructural gaps especially in rural areas is quite essential for us and long overdue. It will address the three most critical obstacles faced by Pakistan’s economy; unemployment, poverty and slow economic growth. Moreover, it will also be a face saving for the much trumpeted BISP, providing it a safe exit.

— (The writer heads Islamabad-based centre for labour advocacy and dialogue (CLAD).)