Disasters cause massive disruptions, poverty and migration. Learning from COVID-19, a new generation of social welfare programs will help the poorest better cope with extreme weather events
Storms, fires, droughts and other disasters are a harsh reality for Latin America and the Caribbean. Their occurrence has increased five- to sixfold in the past 50 years. According to IDB estimates, almost 78 million poor people in Latin America and Caribbean people are vulnerable to the impacts.
Shoring up infrastructure is often considered the first line of response, whether building homes that can withstand hurricanes, constructing bridges that can survive floods, or even relocating communities to safer areas. But boosting overall resilience requires action on several fronts. Today, a powerful tool is coming into focus to help protect the poorest and most vulnerable from disasters: specially purposed cash-transfer programs, part of a new generation of shock-resistant social safety nets known as adaptive social protection programs, with El Salvador as a pioneering country.
Alexandre Bagolle, an IDB specialist in social protection programs, says these new tools are necessary because the poor are more likely to live in disaster-prone areas and lack the financial means to cope with a disaster, sinking them deeper into poverty. “Countries are unprepared to face this challenge,” he notes.
Adaptive social protection programs, as the name suggests, can be applied to all kinds of social support initiatives but the most powerful tools are cash transfers, which have existed as anti-poverty programs for decades. They can be conditional or unconditional. In conditional cash transfers (CCTs), the payments are disbursed when families meet certain conditions related to their children’s education and health.
During an emergency, however, payments are typically disbursed quickly and with few strings attached, as was the case during the COVID-19 pandemic. Prior to the outbreak, one in four Latin American and Caribbean citizens received cash transfers. That rose to more than one in three in the immediate aftermath of the pandemic.
An IDB review found that while cash transfers linked to COVID-19 helped avert the worst social and economic effects of the pandemic, they were also a blunt instrument. They often aided those who didn’t need it and lacked exit ramps to stop payments once the emergency passed. The study called on countries to reform their social protection systems “to make them more flexible, efficient, and sustainable, and to include strategies that provide protection against shocks.”
A good cash transfer program, conditional or otherwise, is built on providing reliable information to those who manage the programs. COVID-19 showed government agencies often failed to coordinate or share information on who was poor, where they lived, and how money could be transferred quickly. That’s where adaptive social protection programs come in – they look to pixelate information to the household level.
It is about “how we use social protection programs to improve the resilience of households, starting out with the poorest,” says Bagolle.
Research proves the value of such programs to help poor households gain resilience. A household that receives conditional cash transfers is more likely to invest in storm-proofing their homes, for instance. Without them, says IDB sustainability expert Mariana Alfonso, families take “maladaptive measures” in the aftermath of a disaster, such as selling a productive asset or removing kids from school to have them work on farms.
“This is something that impacts young adolescent boys especially,” she says. Cash payments can help prevent these life-altering events from happening, as well as providing money to pay for transportation in the event of an evacuation. But for that to happen, they must be well-targeted and predictable. And that requires a strong institutional framework behind them.
El Salvador’s adaptive response
El Salvador is one of the countries in the region most vulnerable to disasters. It also has good information on poverty from household surveys and other sources. Its adaptive social-protection program is innovative in that it provides timely payments and is national in scope, as well as technologically advanced.
Meet “GaIA,” a map-based database whose name fuses the Greek goddess of Earth with “IA,” the Spanish acronym for artificial intelligence. It uses AI to interpret satellite images to determine population densities, and then cross-references the densities with socioeconomic data to identify the locations of the poorest families most at risk of a hurricane, flood, drought or fire.
In a recent application, the system identified 400,000 households in 262 districts potentially eligible for cash assistance – almost 2 million individuals, or one-third of the country’s population. They go from San Salvador, the capital and the wealthiest district, where just 2% live below the poverty line, to San Isidro in the country’s Northeast, where 47% of households are classified as poor.
As part of a $100 million project to create a social registry and an adaptive social-protection system, the IDB is providing $20 million to El Salvador’s finance ministry for the next stage of the program, where officials fan out to the identified areas to obtain information that would allow money to be disbursed soon after, or possibly before, the arrival of a hurricane. Luis Tejerina, an IDB specialist who is managing the project, compares the process to “building the ark before the storm arrives, not during the storm.”
The conditions for the payments are spelled out in a comprehensive document, where nine government bodies – from the ministry of finance to the ministry of health – are on the same page on everything from what defines the severity of a storm to payments to the degree of vulnerability. For instance, a family that cares for a handicapped person may get more financial assistance than one that does not. There is a maximum of $500 per family for between one and six months.
“It is like the crew on a boat,” says Tejerina. “When the storm strikes, the crew does not decide what to do; it knows what to do.”
While the focus today is mainly on hurricanes, it can be expanded to other events, such as extreme heat or wildfires.
These information platforms could also be used for other social programs, not just cash transfers, says the IDB’s Alfonso –targeted education for boosting climate resilience or health interventions, for example.
Programs similar to GaIA, but not nation-wide in scope, have been tested in Bangladesh and Haiti “with positive results,” says Tejerina. Other countries, such as Chile, have strong programs to roll out assistance after a disaster strikes, but not before.
Since 2000, Latin America and the Caribbean has suffered more than 1,400 disasters. Coping with storms and other calamities means everything from shoring up the infrastructure to cutting emissions. But to contribute to overall resilience, it also means strengthening institutions and rethinking social welfare programs.
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