In case you are not a regular reader of the Daily Mail you may not be aware that the paper has a long running campaign against the UK spending 0.7% of national income on international development. On today’s front page it has trained its guns on the use of ‘cash transfers’, a form of aid spending which sees recipients being given money, or vouchers, often with no strings attached.
The idea of handing over cash unconditionally can feel reckless or even irresponsible. We give up control on what it’s going to be spent on. But this approach has been shown to be some of the most effective aid spending there is, with great benefits for the world’s poorest people. Last year the well-respected Overseas Development Institute (ODI) conducted a review of 165 studies covering 56 cash transfer programmes in 30 different countries, to find out just how effective the process was.
Their findings revealed that cash transfers have improved school attendance and reduced child labour, boosted access to healthcare, improved and diversified diets, stimulated the economy and saw a reduction in domestic physical abuse. That’s not a bad haul and probably explains why the UK’s Department for International Development (DFID) is keen to make use of such a positive method of delivering aid. The ODI report also found no evidence that cash transfers to the poor led to people working less. In fact the evidence they found was that it actually increased employment among adults.
In the past lots of aid, especially humanitarian aid, was delivered in the form of in-kind assistance, usually goods bought by humanitarian organisations, and delivered physically to areas in need. But because these goods have to be transported, sometimes thousands of miles, this can be an expensive and often slow, way to help. If such goods can be acquired locally then it makes much more sense to provide people with the funds to acquire them where they are. This income also provides a spark to the local economy, which will be essential for communities’ recovery and long term prosperity.
As well as being a quicker and more sustainable way to meet needs it’s also smarter and more empowering
As well as being a quicker and more sustainable way to meet needs it’s also smarter and more empowering. Chiyambi Mataya, Christian Aid’s Senior Humanitarian Advisor on Cash and Markets in Malawi, said that it’s common sense that local people would have a better understanding of their own needs. He said: “Cash transfers to disaster affected people have proven to be more empowering, as the people are accorded the right to make their own decisions on which of their needs should be addressed first, unlike when providing in-kind assistance, which is very prescriptive on which needs should be addressed. Such power to make their own decisions on prioritisation, enhances the dignity of disaster affected people in a way that could never be achieved through the use of in-kind interventions.”
He added that the provision of cash to vulnerable people to buy their most immediate basic needs from local markets is not a new phenomenon. Most Western governments have been providing social safety-nets in the form of cash to vulnerable sections of society for many decades. These vulnerable people are given the power to decide by themselves on the most important needs to address in their lives using the money which they receive as social security, so why not take the same approach with people overseas?
In a bid to listen more to the needs of those being helped, Christian Aid recently sent a ‘Truth Truck’ to Nepal to get feedback from earthquake survivors about the kind of aid they received. The second most popular item listed was cash.
DFID is now using biometric payments which make it one of the most secure cash transfers in the world
Clearly no scheme or program devised by humans is perfect and where there are problems it’s right that they be pointed out and addressed. Where there is fraud or corruption this must be stopped, and it’s good to see the Daily Mail report that DFID is now using biometric payments which make it one of the most secure cash transfers in the world.
The 0.7% of our national income the UK Government spends on the world’s poorest and most vulnerable is coming under attack. Rather than something which we get angry about it should be the source of immense national pride. We should encourage more countries to go further and match our country’s commitment. As former DFID Minister, and Christian, Desmond Swayne has said, he doesn’t know anyone who spends 99.3% of their money on themselves, and he’s not sure he would want to.
There is great inequality in our world. UK aid is some of the best in the business and delivering it through cash transfers is one of the best ways of doing it.