Social Protection Responses to Crises and their Impacts on Children: Learning from Past Lessons in

Indonesia and Ethiopia

Maricar Garde and Jenn Yablonski

The Global Economic Crisis - Including Children in the Policy Response

UNICEF-ODI9-10 November 2009'

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Outline of presentation

• Introduction

• Brief review of literature

• Case studies

– Description of programmes

– Problems

– Successes

• Lessons and insights from Indonesia and Ethiopia

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Introduction

• Policy essay looking at Indonesia and Ethiopia’s experience with social protection programmes (SP)

• SP programmes implemented under different contexts but a number of similar challenges/successes arise

• Indonesia’s crisis stemmed from the financial sector while Ethiopia suffered from chronic food shortage—features present in the current crisis

• The paper is not an impact analysis nor does it try to make generalisations

• Highlights insights that are relevant to the present crisis

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How do aggregate shocks affect households and children?

• Aggregate shocks tend to increase poverty and lead to a deterioration of social indicators in developing countries

• Impacts differ across households depending on wealth, geographic location, demographics and education

• Households resort to networks or

• Severe coping mechanisms (Ravallion, 2008):– Borrowing or selling-off productive assets

– Switching to a less expensive but lower quality diet

– Withdrawing children from school and at times putting them to work

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How do aggregate shocks affect households and children?

• Previous crises have led to:– Increased food insecurity (Studdert et. al., 2001)

– Maternal wasting in Indonesia (Block et. al., 2004)

– Reduced probability of school attendance in Argentina (Rucci, 2003)

– Increased incidence of child labour in Tanzania (Beegle et. al., 2006)

• Children may disproportionately suffer from irreversible consequence—malnutrition and missed years in school may alter children’s productivity and earnings during adulthood (Ravallion, 2008; Strauss and Thomas, 2008; Victora et al., 2008)

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Analysis of Social Protection Programmes:

Indonesia

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Indonesia: National Safety Net Programme (JPS)

• JPS introduced in 1998—without any institutional antecedent—as a response to the Asian Financial Crisis, five components are:

– Sale of subsidised rice (OPK)

– Employment creation programmes (Padat Karya)

– Scholarships and block grants

– Healthcare including nutrition supplement programme

– Community fund programme

• Funded by the national government, the Asian Development Bank and the World Bank

• Implemented by national agencies together with local and village authorities

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JPS: Challenges and successes

• Inadequate coverage of most programmes except for the rice subsidy scheme (OPK)

• Targeting mostly based on household income classification from previous surveys—missed those made vulnerable by the crisis

• Local-level intervention with the distribution of benefits improved targeting in some areas

• Households that participated in the OPK scheme reduced their probability of falling into poverty by 4% (Sumarto et. al., 2005)

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JPS: Impacts on Children

• Households which benefited from the OPK scheme and scholarships saw a 4 % and 10% rise (respectively) in consumption (Sumarto et. al., 2005)

• Scholarship programme reduced drop-out by 3 percentage points at the lower secondary school level which historically was the level most susceptible to drop-outs (Cameron, 2009)

• Beneficiaries of the nutrition programme (supplementary food programme) achieved better nutritional status than those who did not participate from the scheme (Satriawan, 2006)

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Analysis of Social Protection Programmes:

Ethiopia

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Ethiopia: Productive Safety Net Programme (PSNP)

• PSNP marked shift to systematic response to chronic food insecurity

• Two components: public works & direct support

• Aims to protect households from shocks: reduce food insecurity & asset depletion

• Households receive different combinations of food and/or cash over six-month period

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PSNP: Challenges and successes

• Initial problems related to targeting, timeliness of transfers, and amount of employment per household

• Challenges prevented participating households from improving their food security in 2006

• Modest improvements over time with repeated surveys in 2006 and 2008 showing that PSNP is protecting beneficiaries to some extent

• High rates of inflation affected the cash transfers—e.g. households in Amhara lost 56% of their purchasing power over 7 months

• Combination of inflation & different packages mean real value varies substantially between households/areas

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PSNP: Impacts on Children

• Households receiving cash were spending part of it on education (15% of hhs) and health (29%)

• Increased use of healthcare facilities, enrolment of children, and attendance attributed to the PSNP (Devereux et al., 2006; Slater et al. 2006)

• But labour requirements affect selection and participation in the programme—unintended impacts for some women and children

• Work requirement leads to increased children’s work at home in order to replace adult labour being used for PSNP (Slater et al. 2006, Woldehanna 2009)

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Learning from Indonesia’s JPS and

Ethiopia’s PSNP

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Lessons and Insights

• The nature of the shock affects both the social protection response of the government, and possibly the longer-term prospects for the programmes

• Ethiopia’s experience of periodic shocks led to the development of a more predicted and multi-year safety nets programme

• But certain factors such as donor dependence make the future if the PSNP unclear

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Lessons and Insights

• The JPS did not continue after Indonesia recovered

• Fuel subsidies were continued but later phased-out, and Indonesia tried a cash-transfer programme in 2006

• Poor coverage and targeting are often a problem but can be improved as the programme progresses Indonesia’s experience with using previous income classification highlights the need for real-time coverage during shocks> importance of investing in capacity (before crisis)

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Lessons and Insights

• SP design needs to be gender- and child-sensitive to minimise differential impacts among households members

• Programmes in Ethiopia and Indonesia did produce some positive results despite implementation challenges—the most obvious impact is protecting consumption during times of insecurity

• Social protection can prevent aggregate shocks from causing long-term consequences, e.g. children by protecting nutrition and preventing drop-outs

Thank you for listening

Questions and comments are welcome