The FINANCIAL — Economic inclusion programs, which help boost income and assets of the world’s poorest, are on the rise in 75 countries, reaching approximately 20 million poor and vulnerable households, and benefitting nearly 92 million individuals. This surge comes at a crucial time, as more than 700 million people around the world face extreme poverty, a number on the rise for the first time in two decades.
According to the World Bank’s newly published “State of Economic Inclusion (SEI) Report 2020: The Potential to Scale,” economic inclusion programs —usually a combination of cash or in-kind transfers, skills training or coaching, access to finance, and links to market support— are fast becoming a critical instrument in many governments’ large-scale anti-poverty strategies. And they are likely to continue, especially in areas affected by conflict, climate change, and shocks, due to the COVID-19 pandemic.
“One of the most stubborn challenges we face in development is positively transforming the lives of the extreme poor and vulnerable— a problem exacerbated by the COVID-19 pandemic,” said Mari Pangestu, World Bank Group Managing Director. “This report presents—for the first time—a systematic review of economic inclusion programs around the world, and sheds light on how governments can best invest in social protection, jobs, and financial inclusion, to help the poor build a better future for themselves.”
The SEI Report is a result of a unique collaboration under the Partnership for Economic Inclusion (PEI). PEI is a dedicated platform to support the adoption and adaptation of national economic inclusion programs working with a variety of stakeholders, including national governments and bilateral, multilateral, non-governmental, research, and private sector organizations.
“Partnership is integral for program success given the multidimensional nature of program delivery. BRAC’s engagement with PEI reflects our collective commitment to ensuring program approaches and delivery are informed by community needs, ground realities and local partner expertise,” said Shameran Abed, Director BRAC, an international development organization based in Bangladesh.
The report examines over 200 programs, across 75 countries. It finds that governments around the world are increasingly scaling up economic inclusion initiatives through social safety nets. In-depth case studies covering the Sahel, Bangladesh, Peru and India highlight the evolution of economic inclusion programs, and how they are addressing challenges such as urbanization, gaps in human capital accumulation, adaptations to shock, and technological change.
The implications of COVID-19 feature broadly in the report, which looks at the fallout of the pandemic at the household as well as institutional level. Economic inclusion programs for the poorest show strong potential to improve livelihoods as part of integrated policy responses focused on containing the pandemic, ensuring food security and supporting medium term recovery. Experiences in Egypt, Ethiopia, Ghana, Zambia and other countries, show how economic inclusion programs can build on – rather than replace – social assistance programs.
“The Covid-19 pandemic has put a spotlight on the importance of linking social protection and economic inclusion when it comes to protecting people against shocks. We continue to provide significant funding for social protection and jobs. But there is a strong potential for economic inclusion programs to build on pre-existing government social protection systems, and this may prove critical in the long-term recovery from the COVID-19 fallout,” said Birgit Pickel, Director for Global Health; Pandemic Prevention; One Health, in the German Ministry for Economic Cooperation and Development, BMZ.
The report reveals women’s economic empowerment is a key driver of interventions, with nearly 90 percent of programs surveyed having a gender focus. This is critical given findings from the report and other work from PEI which show that women make up the majority of workers in sectors such as education, retail travel, hospitality and domestic services, which have been most affected by COVID-19. Lessons from previous crises highlight the importance of this gender focus to avoid declining opportunities for women, de-prioritization of female health services, and increased gender-based violence.
“Economic inclusion packages are well positioned to support women to address the plurality of COVID-19 related impacts. In particular, the pandemic has highlighted the need to strengthen national systems, and to make sure that they are inclusive and equitable by design, so that women and others who have been historically marginalized are not left out,” said Olivia Leland, Founder and CEO of Co-Impact, a global collaborative focused on improving the lives of millions of people across the world.
The report also discusses key debates on program impact and costs, as these are critical factors affecting the sustainability of economic inclusion programs at scale. For example, the report sheds light on major lessons learnt from initiatives supported under the Sahel Adaptive Social Protection Program (SASPP), which was launched in 2014 to design and implement adaptive social protection programs aimed to help poor and vulnerable households become more resilient to the effects of climate change. One important lesson from that experience was the need to expand reach in a systematic and rapid manner.
“Leveraging digital technology will be critical to leapfrog capacity constraints and to strengthen program management. Many programs are already utilizing government social registries, beneficiary registries, and other government databases to identify potential participants,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.
Alongside the SEI, the PEI is also launching an online and open-access PEI Data Portal The data portal underscores a commitment to open access to support global learning and program implementation.
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. It is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. The WBG is making available up to $160 billion over a 15-month period ending June 2021 to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans and $12 billion for developing countries to finance the purchase and distribution of COVID-19 vaccines.