How welfare-to-work programs can protect the poor and vulnerable during the difficult times.
Basic income security is a human right guaranteed by the Human Rights Declaration 1945, International Covenant on Economic, Social and Cultural Rights 1966, and other international human rights instruments. Article 33 of the Constitution of Nepal 2015 guarantees employment as a fundamental right to all Nepali citizens. In 2018, the federal parliament enacted the Employment Rights Act (ERA), which requires Government of Nepal (GoN) to provide at least 100 days of employment annually to the unemployed or provide half of the minimum wage for 100 days should it fail to provide employment.
Also in 2018, the Prime Minister’s Employment Programme (PMEP), a new welfare-to-work program, was introduced to realize Nepalis’ fundamental right to employment. PMEP differs from past welfare-to-work programs, including the Rural Community Infrastructure Work (RCIW) program started in 1996 and the Karnali Employment (KEP) program started in 2006, in the sense that it is a rights-based program; RCIW and KEP are not underpinned by constitutional or legal obligations. Since it started in 2018, budget allocation for PMEP has increased every year.
Recently, GoN decided to include informal workers and returnee migrants in PMEP, as an alternative relief package for easing the economic hardship caused by the Covid-19 pandemic. For FY 2020/21,the program was allocated NRS 11,600 million to generate200,000additional jobs in public infrastructure construction. These additional jobs are intended for internally displaced informal workers, migrant returnees, and other unemployed poor people.
Safety net for poor
Nepal’s ERA is similar to other South Asian countries, including Bangladesh and India. For example, India’s National Rural Employment Guarantee Act 2005 (NREGA) guarantees 100 days a year employment for all and should the Government fail to do so within 15 days of application, the state is liable to pay an unemployment benefit.
Public works programs are considered the best way to reach poor, needy, and vulnerable groups in countries like Nepal where a comprehensive poverty identification database is lacking. Such programs are inherently self-targeting, as the arduous, physical nature of public works rarely attract those with better livelihood alternatives. The beneficiary selection process for welfare-to-work programs means that there are fewer instances of fraud and corruption compared to other welfare programs, like unconditional cash payouts.
International experience also confirms that public works programs benefit the poor and marginalized even when eligibility criteria are not applied. For example, in India, over 50 percent of NREGA participants are women. Not only does this help promote women’s financial independence; in doing so, the program also supports the attendant benefits associated with higher income for women—increasing household food expenditure and caloric intake, for example. Moreover, the program’s positive impact for tribal and low-caste households (scheduled castes and tribes) is very encouraging. Although 25 percent of all rural households participated in NREGA, the figure is at 42 percent for tribal households and at 34 percent for low-caste households. Likewise, the evaluation studies of Bangladesh’s Food-For-Work program suggest that the work requirements effectively discourage participation by the non-poor households.
PMEP, if implemented well, can reduce seasonal distress migration, which is very common in Nepal’s western provinces: Karnali and Sudurpaschim. Due to the seasonality of agricultural work, subsistence farmers and agricultural labourers from remote rural areas migrate to India during winter and take on precarious temporary employment. This not only increases burden on those left behind but also invites other socio-economic problems. For example, seasonal migration has been identified as the largest source of HIV import and transmission in Karnali and Sudurpachhim provinces. Public works programs that provide out-of-season employment to farmers can reduce the need for seasonal migration and the risks associated with it. This is the lesson from Bangladesh where over 85 percent of the Food-For-Work program resources are used during January to May—the low season for agriculture.
In addition to creating employment opportunities, public works programs have an added benefit of empowering vulnerable informal workers by providing them with the information on their wage entitlements. In India, the simple disclosure of the state prescribed minimum wage rate through NREGA increased awareness amongst all informal workers of their wage entitlement and therefore placed workers in better position to claim their rights in negotiations with private sector employers. There is evidence that this empowerment led to increases in agricultural wages, which were stagnant in the years immediately before the implementation of NREGA. In Nepal too, PMEP can provide similar empowerment outcomes for the entire informal sector, whose workforce, as the Nepal Labour Force Survey (2017/18)shows, is paid far below the prescribed minimum wages rate.
Implementation is the key
Attaining the direct and indirect benefits of welfare-to-work programs depends on effective program implementation, based on sensitivity to the circumstances and personhood of potential beneficiaries. In fact, poorly implemented programs can result in adverse outcomes for the poor. ‘Discouraged Workers Syndrome’ is one such adverse outcome reported in India. In some places, the uncertainty of securing welfare-to-work discourages workers from proactively looking for such welfare programs. Ill-conceived programs can also result in the stigmatisation of beneficiaries. Nepal’s PMEP program, for example, has been criticized for providing beneficiaries with demeaning work, such as weeding and chasing stray animals. Not only is upholding the dignity of the poor a moral imperative, the failure to do so undermines the ability of welfare-to-work programs to attract willing and productive beneficiaries. In the Nepali context, the inclusion of public infrastructure construction into the welfare-to-work program for the coming fiscal year is a positive development in this regard.
Adverse outcomes can also be minimized by improving program design and implementation—the timely assignment of work and provision of wages; transparency and simplicity of procedures and communications; and effective monitoring are important and cannot be overlooked. Moreover, the institutionalization of social audits, payment through banks, and setting up of local-level monitoring systems with the active participation of civil society can not only help mitigate negative outcomes but can also enhance good governance in the implementation of poverty reduction programs of all types.
PMEP has great potential to help reduce the vulnerability and marginalization of unemployed poor people in Nepal. The program has become even more relevant because of the impact of the Covid-19 crisis on informal and migrant workers. However, sensitive implementation remains a key to effectiveness and must not be overlooked in the coming days.