Asia-Pacific Governments Urged to Consider Conditional Cash Incentives

MANILA, PHILIPPINES - Asia-Pacific governments should consider enhancing the use of Conditional Cash Transfers to help vulnerable families affected by the global financial crisis, Asian Development Bank (ADB) Vice-President Ursula Schaefer-Preuss said today.

Conditional Cash Transfer (CCT) programs provide cash payments to the most vulnerable groups in exchange for their participation in a range of beneficial activities such as prenatal care, nutrition programs, or school attendance.

"CCTs are particularly attractive policy options during economic downturns, because they provide counter–cyclical funds into the hands of the most vulnerable, who are likely to spend the money on essential items such as food and housing," Ms. Schaefer-Preuss said at the opening of the Regional Forum on Social Assistance in Manila.

"They, therefore, have an immediate welfare and poverty reducing effect – through provision of cash – and a longer term developmental effect through their potential to improve human health and education."

CCT programs have been successfully implemented in Latin American countries such as Brazil, Mexico, and Nicaragua. Many countries in Asia and the Pacific region are currently establishing or expanding similar schemes.

Ms. Schaefer-Preuss noted that despite Asia's remarkable success in sustaining growth, reducing poverty and improving living standards over the past two decades, the region still faces major challenges of extreme poverty in several countries.

Some 900 million people in Asia still live below the poverty line of $1.25 a day. With the global economic slowdown now spreading to the region, ADB estimates that at least 60 million people who would otherwise have been lifted out will remain mired in extreme poverty.

Investment in social assistance is a key priority in ADB's response to the crisis. Earlier this year, ADB approved loans on social protection measures for Mongolia, the Philippines, Pakistan and Viet Nam worth more than $1.1 billion. ADB has also approved a series of grant support, worth about $55 million, to Bangladesh, Indonesia, Mongolia, and Nepal.

The two-day regional workshop brings together more than 40 participants from ADB, developing member countries, partner development agencies, research institutes and civil society organizations who will share their views through interactive panel discussions.