Pakistan: Uplifting Lives and Livelihoods Through Cash Transfers

Challenge

In August 2010, Pakistan experienced terrible floods affecting:

• 78 districts and nearly 10% of Pakistan’s population covering one-third of the country
• More than a million houses in all regions of the country and over 20 million people
• Over 100,000 square km of land
• 2.4 million hectares of crops and a large number of livestock.

The flooding had a catastrophic effect on evaluated households (HHs): 52% suffered total collapse of all housing structures, 72% were displaced from their homes (average of 40 days). Coping strategies included: borrowing money (37%), spending savings, selling assets, and reducing food consumption.

Solution

The government of Pakistan set-up a unique post-disaster cash transfer program, Citizens’ Damage Compensation Program (CDCP), to support the flood-affected population in restoring their lives and livelihood. The World Bank, DFID, USAID and the government of Italy joined the Phase-II collectively through the Flood Emergency Cash Transfer Project (FECT) Project reaching at least 1 million households (7.5 million people), including the vulnerable (widows and disabled-headed households) and providing $404 to each beneficiary household in two equal tranches of $202. The beneficiaries were enrolled in the program through biometric verification with a national ID database and cash grants were disbursed through debit cards by engaging the private banking sector.

Phase-II also provided technical assistance for enhanced governance, improved transparency, establishing effective mechanisms to resolve grievances, and rigorous monitoring and evaluations. In addition, Phase-II incorporated measures needed to address certain gaps such as capacity building of implementation agencies at the federal, provincial, and local level, and strengthening of communications and the public information campaign. The program has offered a model framework for preparing a National Disaster Response Action Plan for early recovery phase that has been approved by the Cabinet Division, Government of Pakistan.

Results

Since the project was approved in spring 2011:

• The program reached out to an estimated 1 million households (7.5 million people) identified through provincial housing damage data verified through third party validation.
• Beneficiary households received two payments of PKR 20,000 (approx. $202 through a unique debit card issued when they register for the program after their identity is biometrically verified.
• Cash transfers made from November 2011 to January 2013 to 1,005,754 households (7.5 million people).
• 17% of ultra-poor (which are the country’s largest social safety net program’s beneficiaries) are benefitting from the program. 
• 18% (181,000) of 1,005,754 beneficiary HHs are female-headed households/families.
• More than 172,480 flood-affected households have been brought into the fold of the program through the grievance-redress system, 10% of them are female-headed households.
• The baseline report notes that 17% of CDCP beneficiary households exist below the poverty line.

World Bank Group Contributions

Out of the total FECT program cost of $570 million, the Bank contribution of $125 million was made available through the International Development Association (IDA). Of this amount, $115 million was apportioned to finance payment of cash transfer amounts to the flood-affected households across the country. In addition, $10 million financed technical assistance for capacity support to implementing agencies of the federal government, as well as to provincial Disaster Management Authorities, and for ensuring effective monitoring and evaluation of the program through process audit and impact evaluation.

Partners

The FECT project is supported by DFID (GBP 65 million), USAID ($190 million) and the Government of Italy ($69.7 million). In addition, the Government of Pakistan has contributed $100 million and USAID has also funded technical support for Third Party Validation of targeting surveys conducted by district administration, thereby enhancing the program’s transparency in identification of rightful beneficiaries of the early recovery cash-grants. The donors work in close coordination to promote the program’s objectives and jointly contribute to the program’s efficacy through quarterly Joint Supervision and Evaluation Missions. Moreover, technical support from the International Organization for Migration (IOM) to the grievance-redress system and local-level communication has improved the process of beneficiary mobilization, identification and payment, and ensuring due-diligence in the handling of complaints against service delivery.

Beneficiaries

Cash-in-hand brings hope for Razia!

Life was not very kind to 35-year-old Razia who lives in Bhalwaal in Punjab. Five years back her husband passed away. A year ago, her house was destroyed in the devastating floods of August 2010. Having no source of income, looking after her three daughters and a son was a daunting task for Razia until she got a new lease on life as one of the recipients of the floods emergency cash transfer project, CDCP. The cash transfer was the only lifeline available to her at that time to pay for basic essentials and needs. She recalls, “…the floods came and took away everything; my house and belongings were all washed away. The money I got was the only hope to pull through the tough times and feed my children.”

Moving Forward

The Phase-II of the program required the creation of a Disaster Response Action Plan for the development of a future disaster recovery response, building on best practices and lessons learned through this program. The Government of Pakistan has fully endorsed the National Disaster Response Action Plan and aims to institutionalize it to facilitate faster and more effective disaster response in the future. The sustainability of the program is also promoted through knowledge creation, based on the mid-term review of the program, which has also led to the additional funding proposals to build the capacities of implementing agencies for effective future disaster response.