The COVID-19 pandemic is an unprecedented health crisis. We are witnessing cataclysmic socioeconomic costs and extraordinary infection rates with global cases surpassing 5.7 million.
The International Labour Organisation estimates that almost 1.6 billion workers in the informal economy – those in employment characterised by a lack of basic protection – are in danger of losing their livelihoods due to the crisis.
Vulnerable individuals are falling through the cracks of international systems, missing out on testing, healthcare, social support, and the ability to isolate.
The combination of these health, safety, and economic risks, creates the perfect storm for extreme forms of exploitation, including forced labour and forced marriage, to flourish.
South African woman in Diepsloot, March 2020
Responding to COVID-19 requires decisive, innovative action in an environment where conventional methods of service provision may not be practical.
Cash transfers may answer this call, as they require little in-person contact and can be rolled out efficiently. As the name suggests, cash transfers involve direct payments to individuals which can either be conditional (only spent in certain circumstances or if targets have been met) or unconditional.
Cash transfers have also been used successfully in crises before. In the aftermath of the 2015 earthquakes in Nepal, Plan International distributed over €4 million (US$4.4 million) in cash and vouchers to meet emergency needs. The 2011 famine in Somalia saw aid agencies use remittance companies to provide cash transfers to more than 1.5 million people, while in Yemen, the combination of civil conflict and protracted famine resulted in the 2016 Cash for Nutrition program implemented by the Yemen Social Fund for Development.
Cash transfers, conditional on keeping children in school, have been used to combat child labour (including in its worst forms) and child marriage. Some of these interventions have been evaluated, and are included in Walk Free’s Promising Practices Database, a searchable database of evaluations of modern slavery interventions.
For many vulnerable families, there is no real choice beyond sending a child to work or to an early marriage — cash transfers have often been used to combat this problem
An analysis of cash transfer evaluations highlights that for cash transfers to have a lasting effect, they must be embedded within wider interventions such as behavioural change and community empowerment programs. This analysis also reveals programs which ran for longer periods were more likely to have enduring positive outcomes.
These findings are important for our current response to COVID-19. While immediate assistance is focused on the distribution of cash, as we transition to medium- and long-term responses to COVID-19, it will be necessary to wrap additional services around cash transfer programs, and ensure assistance continues in the longer-term, and with a clear exit strategy. This will safeguard already vulnerable populations, so they are not put at risk once an intervention ends.
As of May 2020, there were 246 cash transfer programs in 124 countries, that have been expanded or adapted to respond to the COVID-19 crisis. Of those programs, 161 in 104 countries are new initiatives. Malawi announced a 35,000 Malawi kwacha (US$48) monthly cash transfer, matching the country’s minimum wage, and Somalia has introduced its first-ever cash transfer program for 270,000 vulnerable households.
Concerns about whether cash transfers will help all vulnerable people do exist. In the Philippines and Ecuador, support was linked to out-of-date registries, which resulted in a rush to update information for eligible households. Added to this, it can be unclear how people are selected for the programs, and how long they can access the aid.
Disbursing these funds fairly is essential. In countries where welfare infrastructure and systems are already in place, the rollout is theoretically straightforward. Jordan, for example, digitised data from land and vehicle registries and social insurance, and subsequently expedited the application process for cash transfers.
The role of technology here is crucial. Program designers should keep an eye on innovative horizon – for example, Oxfam Australia recently piloted a blockchain program in Vanuatu, providing credit to individuals in disaster-prone locations to speed up service delivery in crises. The pilot reduced dependency on formal institutions to handle money, and significantly reduced recipient enrolment time.
Where online banking may not be reliable, governments have taken other means to effectively provide financial assistance. For example, the Armenian Government established a home delivery of cash for seniors, and in Ghana, the country’s central bank relaxed its criteria to establish a mobile wallet, allowing vulnerable people who often lack documentation to open an account and receive money. Further, both the Egyptian and Pakistani Governments utilised various media avenues, community announcements, and SMS to notify beneficiaries and avoid overcrowding.
Similar to all our findings across the Promising Practices Database, embedding evaluation methods within the cash transfer programs is essential. Process monitoring could include a robust feedback and complaints mechanism, such as in Pakistan where emergency cash program beneficiaries and community members can lodge appeals, feedback, and complaints via post, email, and phone. And, in the age of social distancing, phone surveys can replace in-person qualitative assessments.
Governments and civil society are searching for the most effective means of delivering immediate relief to those worst affected by the socioeconomic impact of COVID-19. For the current and inevitable future crises, cash transfers must fit within a broader, comprehensive system implemented over an extended period with an embedded evaluation process.
Looking forward, ensuring social assistance infrastructure is already in place allows for fast roll-out of programs at short notice, while permitting flexibility in distributing funds can mean the most marginalised populations are reached. One thing, however, is absolutely clear: cash transfers are invaluable in protecting the most vulnerable individuals from exploitation and harm in times of crisis.