CAIRO: The World Bank’s Social Safety Net (SSN) programs, which are aimed at sheltering the poor from shocks and decreasing chronic poverty, have not targeted Egypt in the last decade because of the country’s inefficient reliance on universal subsidy programs, according to the author of a recently released evaluation of the bank’s SSN programs.
“The World Bank has not provided any loans to support Social Safety Net programs in Egypt [in the last ten years], as its approach — like in most other MENA countries — has relied mainly on universal subsidies rather than programs targeted specifically to the poor,” Jennie Litvack, the main author of the Independent Evaluation Group’s (IEG) report, told Daily News Egypt Wednesday.
Because Egypt and other governments in the Middle East and North Africa (MENA) region are under intense pressure to sustain general subsidies, due to rising food costs and general volatility, promoting a shift towards poverty-targeted subsidies has been very difficult, Litvack explained.
According to the IEG study, the MENA region accounted for only 13 of the 244 SSN programs executed globally by the bank from 2000 to 2010.
Regardless of the difficulties of promoting SSNs in the MENA region, the bank should continue efforts to “ensure that a greater share of reform benefits would go to the poor” in Egypt by focusing on the issues of “poverty and income inequality,” a recent Egypt-focused World Bank Country Assistance Evaluation from IEG argued.
However, due to the politics of reform in Egypt, such initiatives “should be implemented within a medium-term framework,” as it would be “extremely difficult” to advance this agenda in Egypt in the immediate term, the IEG added.
The recently released IEG study, titled “Social Safety Nets: An Evaluation of World Bank Support, 2000-2010,” evaluated the effectiveness of the bank’s $11.5 billion spent on 244 SSN programs, which include: cash transfers (conditional and unconditional); in-kind transfers; education/health subsidies; energy, water, and housing subsides; and public works programs.
Overall, the report noted consistently high success rates in the 92 impact evaluations it conducted on 24 of the bank’s 244 SSN projects. According to the study, 86 percent of projects received a performance rating of “Moderately Satisfactory” or higher.
However, none of the 92 impact evaluations were conducted on SSN projects in the MENA region. According to Litvack, IEG evaluations normally take several years to complete, and rely on the availability and transparency of data, and the ability to conduct new household surveys. In addition, “countries in MENA generally have not been interested in conducting impact evaluations,” she said.
Despite promising success rates on the SSNs evaluated by IEG, the study noted that more needs to be done to improve how success is measured. “Although short-term achievements have been encouraging, results frameworks of operations supporting SSNs need to be further improved,” as 47 percent of the SSNs “did not have even one indicator to monitor progress on reaching the poor.”
In addition, the study recommended that SSNs should be more tethered to a “longer-term results framework,” and have mechanisms to more effectively measure the cost-effectiveness of the projects.
The study also pushed for the World Bank to more rigorously engage low-income countries and help them build their SSN systems and institutional capacities.
According to the IEG, only 20 percent of the bank’s $11.5 billion went to low-income countries, with the remaining 80 percent going to middle-income countries.
The skewed figures, the study explained, came as a result of medium-income countries having more capacity to borrow and spend, whereas low-income countries have weaker administrative capacities and tend to “place less emphasis on SSNs as elements of their poverty alleviation programs,” due to “tighter budgets and many competing needs to help the poor.”
The IEG study also stressed the importance of engaging with countries during stable times in order to help them develop SSN programs flexible enough to address systemic shocks.
“Countries that had prepared themselves during stable times by building permanent social safety nets were better positioned to respond than those that had not when the crises hit,” Vinod Thomas, director-general of evaluation at the World Bank Group, said.
According to the IEG study, most SSN projects that the bank supported weren’t designed to address systemic shocks, such as the food, fuel, and financial crisis that pushed an additional 64 million people into poverty in the last few years.
The sampled SSN projects focused mainly on “addressing chronic poverty and human development” and less on “SSNs that can address shocks,” the study showed.
In an effort to help countries improve their institutional capacities to respond to potential shock, the report noted that the bank did make a notable shift over the decade in the type of SSN programs it supports. The bank began the decade by supporting “projects that emphasized delivery of social assistance benefits” and ended the decade focusing on projects that helped countries “build SSN systems and institutions that can respond better to various types of poverty, risk, and vulnerability within a particular country context.”
During the second half the decade, 46 percent of the sampled projects embraced a systemic approach, while only 14 percent did so during the first half, the study explained.
In addition, the study showed that half of bank’s SSN spending occurred in the final two years of the studied decade, as a result of the food, fuel, and financial crises.
According to a press release, “The Independent Evaluation Group reports directly to the World Bank Group Boards of Executive Directors. The results of its evaluative findings are discussed by the Boards and its studies are carried out independently of the Management.”
