At the end of June, the Lebanese Parliament approved a cash card project that serves as a safety net for vulnerable families in Lebanon as the country goes through the worst economic crisis in its history.
Within 15 days of the law’s approval, a ministerial committee, comprised of the caretaker Social Affairs, Economy, and Finance Ministers, was supposed to determine the mechanism through which the law would be executed. However, this has yet to happen.
Considering the prevailing situation in Lebanon, the implementation of the cash card plan faces many challenges.
In light of that, the American University of Beirut Knowledge to Policy (K2P) Center has produced an evidence brief that informs the design and implementation of the cash transfer program.
First, What is the Plan?
The cash transfer program (CTP) that was approved on June 30th, 2021, aims at alleviating poverty and assisting people in securing their basic needs in the midst of the ongoing economic meltdown.
According to the law, the plan’s annual cost is estimated to be $556 million, $360 million of which is to be funded internally through the Central Bank of Lebanon and can be replaced, when available, by external funding sources.
Each of the eligible 500,000 families targeted for the CTP will receive between $93 and $126, depending on the household size, for one year.
However, the eligibility criteria and funding sources for the plan have yet to be determined.
“The implementation decrees that will be issued by the ministerial committee need to be carefully designed to ensure that assistance is provided to the right people and to demonstrate value for money,” the K2P evidence brief stresses.
Failure to design an effective plan can result in an array of dangerous consequences.
Potential repercussions include targeting errors, which can create community tension and heighten existing tensions and conflicts over scarce resources.
Cash diffusion, particularly if the cash will be disbursed in Lebanese pounds, can exacerbate inflation and increase the difficulty that people in Lebanon face in securing their basic needs.
Additionally, inappropriate monitoring and managing of the CTP, in addition to irregularities in money transfer, are potential hurdles that must be avoided during the execution of the plan, as they could have a serious negative impact on its effectiveness, the K2P report notes.
How to Make It Work?
“Because it’s unknown what will happen in Lebanon, most importantly, funding should be secured first. If funding isn’t secured, the card will fail,” Lama Bou-Karroum, one of the authors of the K2P evidence brief, told The961.
This is one of many key points that the ministerial committee should account for while developing the plan.
“The sum also has to be sufficient … and there has to be a commitment to the timing, such that people would receive money every month because, otherwise, they would not be benefiting; There has to be punctuality and regular payment,” Bou-Karroum said.
The comprehensive report details the issues that need to be addressed in the planning process in order to guarantee a successful design and implementation of the CTP.
Its key recommendations are:
- Ensuring that government institutions have the capacity and skill to plan, implement, and monitor the CTP
- Devoting a budget for the program administration
- Ensuring that basic goods and services, such as food and health services, in addition to functional financial infrastructure, such as banks, are available in the market.
- Monitoring inflation and local prices
- Taking measures to prevent mismanagement and corruption from undermining the program
- Encouraging civil society oversight to help monitor implementation and operate as anti-corruption watchdogs
- Ensuring transparency and accountability using a complaints system and transparent targeting methods
- Ensuring the security of staff and beneficiaries
- Considering a supplementary food supply system when the cash handouts are insufficient due to the increase in local prices
- Ensuring that cash transfers are handed out regularly and in a timely manner
- Determining the payment amount based on factors that include inflation rates, household size, the price of goods on the local market, and the costs associated with receiving the cash transfer
- Securing sufficient funding using a combination of government funding and donors support, and considering additional sources of funding such as reinvesting revenues from excise taxation
- Accurately identifying and targeting beneficiaries through a combination of methods that include self-targeting, categorical targeting, and geographical targeting. This process should include updating and verifying existing social welfare lists, developing documentation-based verification systems, and producing an effective communication plan that sensitizes the public to the targeting and selection criteria
- Identifying implementing agency with appropriate capacity to coordinate with service providers and overseeing various aspects of the cash transfer process.
- Developing a monitoring and evaluation plan that includes monitoring the cash transfer process, market prices, inflation, and beneficiary satisfaction, and determining whether beneficiaries can meet their needs post-CTP. Such a plan would also engage the community and review cases periodically to ensure eligibility of beneficiaries
- Developing a transition plan from the CTP to sustainable social protection programs or other long-term development programs
