Sustainability of Pakistan’s COVID-19 ‘cash transfer’ scheme

Durdana Najam

To address the impact of lockdown in the wake of coronavirus, Pakistan’s ten million below the poverty line dwellers will receive Rs. 144 billion in direct aid from the federal government, while the daily wagers will also be eligible for additional assistance in Rs. 200 billion package. In a four months plan, this money will be disbursed directly as one-time-payments from the federal government’s Ehsas program. Each individual of a select family across Pakistan will receive a check of Rs. 12,000. Practically, each person will be receiving Rs. 3,000 per month. 

The question is what justifies this paltry sum when the government has capped a minimum salary at Rs. 17,500 per month. The announced relief gets invisible when seen through the prices of goods and services that have shot up over the years, while, hoarding has made ordinary things, like wheat and sugar, valuable.  On the other side, a huge stimulus package containing tax rebate and tax cuts have been doled out to the textile and construction sector. People running these sectors, however, should be the ones supporting the government through labour reform polices and other cash benefits to their workers. It seems like the curve of inconvenience caused by IMF induced financial constraints to the elites is being flattened rather than the viruses.

Providing cash and emergency food aid has been the traditional response in Pakistan to economic disasters.   The coronavirus pandemic has nevertheless made this a common response from even the smartest and cleverest economies. Lockdowns have surged unemployment, which if left on its own could become the recipe of social unrest.  A problem far unmanageable then any disease because of its nature to mutate into civil war if the crisis prolongs—in this case, the untreatable COVID-19 demanding stringent social distancing policies.  Not every job is computer specific and strong bandwidth dependent to earn a monthly salary.  A majority of people rather are needed on spot—in the garden, on railway tracks, on airports, in hotel kitchens, on streets cleaning roads for the commuters, the list goes on.  These are the ones who make the life of millions of people simpler, manageable and at times enjoyable.  These people are the hardest hit. 

In Pakistan, the informal sector makes almost 80 per cent of the economy. With no labour laws in practice, salaries of the workers in the parallel economy hardly match their production capacity. Given either on a daily basis, or on a per-piece arrangement, the salary of informal workers is usually sufficient for a day or two. Therefore, the lockdown of even a day could multiply their misery. The problem with the Ehsas program is that it gives 3,000 to only one member of the family. The minimum size of a lower-middle-class family is six persons each.  To weather financial stress they also send their children to work at an early age so that they could feed themselves—which makes Pakistan one of the few countries where the percentage of child labour is still high.

Could the government had used a different model or mechanism to dispense the aid package?

According to Dr Qais Aslam, Professor of Economics at the University of Central Punjab, Lahore cash transfer schemes have been unable to reduce poverty leave alone eliminate it.  He proposes industrial skill development as the only policy option to pull people out of the poverty line and make them useful.

On the question from, if Rs. 3,000 was enough for a family of six, he said that it was not enough even for the recipient. He argued: “It can hardly sustain an individual for a day or two given the high rate of inflation.  Also, has a seamless flow of money been ensured, through the supply chain? To hedge this scheme from getting stolen by the unscrupulous elements, the cash transfer system should have been made simpler and transparent. Alternatively, the government could have used other reliable and time-tested food security models such as the system of ration cards. Or the chains of utility stores could have been rehabilitated.  The tiger force may have been used to dispense food items in utility stores along with hiring cleaner management. The time in hand allows the government to make swift and bold decisions to push the corrupt components to the wall, isn’t it?”  

Imran Khan came into power on the promise to eradicate corruption and to make Pakistan a welfare state. He had promised to make polices that served the citizen rather than the elites, which has been the norm over the last 75 years. Soon both corruption and welfare state would become anything but misnomers. Not that Khan intended to have business as usual in the economic affairs. Other factors, more overbearing, led him to toe the line that moved in circles. However, irrespective of the ground realities, Khan kept to the rhetoric of the welfare state and announced several programs to benefit the poor.  One such leap was the Ehsas program.  Launched on March 27, 2019, the objective of the program was to reduce inequality and invest in human development. Multi-sectorial in nature Ehsas required for its implementation an inclusive governance structure to reform the lives of the marginalised. In simple words, it had become the responsibility of each institution to uplift those who had been left behind. Not a far-fetched dream if proper checks and balances are applied. 

The crisis facing the world in the shape of coronavirus is severe. It is not going away any sooner. Not only it has tested the boundaries of global healthcare infrastructure, but it has also revealed leadership gaps and potentials.  Where Imran Khan has missed, once again the opportunity to shut the stable door the Governor of New York, Andrew Mark Cuomo’s popularity has soared 87 per cent for managing COVID-19 in the worst hit city.

It is not only about giving away aids it is about owning the problem and bringing people at the centre-stage of the solution. It is about communicating with them rationally and with no veil between them. It is about rethinking the welfare state infrastructure rather than using the disease as a window to turn favours to the chosen few. 

Source: MatrixMag

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