LONDON — After a Conservative MP said that the U.K. Department for International Development’s (DFID) cash transfer projects in Pakistan are “exporting the dole,” Prime Minister Theresa May staunchly defended Britain’s foreign aid commitments and reaffirmed the effectiveness of cash transfers programs.
Following claims by Conservative MP Nigel Evans this week at a development committee meeting, the Daily Mail ran a story strongly criticizing these projects. The paper, picturing poverty-stricken Pakistanis queuing outside an ATM in Peshawar, claimed that more than £1 billion in British foreign aid had been “given away in cash” over the last four years. It also claimed that DFID’s cash projects promote corruption.
“It only should be a temporary measure,” Evans said, according to the Daily Mail report. “But it seems like we’re exporting the dole to Pakistan, which is clearly not a clever idea. … Anything that involves money needs to be properly scrutinized and is clearly open to fraud with money siphoned away when it ought to be directed to those most in need.”
“In the last four years, cash transfers supported by U.K. aid have helped almost 9 million of the world’s poorest people to buy food, medicine and clean water,” the spokeswoman said, the Independent reported. “There are robust systems in place to make sure that they are not being exploited for fraud and corruption. We think it is a respected system for getting aid to those that need it most.”
The U.K. aid budget provides £300 million for the Benazir Income Support Program (BSIP), which offers cash to 5 million of the poorest families. Pakistan is a country where around 60 million people live on less than a dollar a day. The program has helped in the fight against poverty at the community level, as well as enabling children to remain in school and providing support to and empowering marginalized women.
The idea of cash handouts are controversial in the public eye, as the Daily Mail highlights. Assuring the British taxpayer that they are getting value for money can be a hard sell when cash handout projects can seem like a free-for-all; but there is evidence to suggest that their are strong benefits to using it instead of traditional aid.
Last year the Overseas Development Institute reviewed 56 of DFID’s cash transfer programs across 30 countries to assess their effectiveness. The ODI analysis showed that giving people money was generally effective at improving areas like health, education, income and savings.
Responding to Evans’ and the media’s criticism of cash programs, Alex Jacobs, director of the Cash Learning Partnership (CaLP) – a consortium of nongovernmental organizations that provides cash transfer in humanitarian crises – welcomed May’s comments and defended the effectiveness and efficiency of cash transfer projects.
“Cash transfer programming is one of the most highly scrutinized forms of aid. CaLP’s members decide to use cash relief not only because it works but also because it saves taxpayers money compared to other traditional forms of aid,” Jacobs said in a statement. “We applaud the British prime minister, Theresa May, for speaking out so strongly in favor of cash programming.”
Jacobs also stressed that cash relief had multiplying effects, building local economies as well as enhancing livelihoods.
“The positive effects of cash relief go beyond the direct recipient. Robust evidence shows that cash transfers not only reduce poverty, they can also boost economic recovery and build the resilience of local markets.”
While aid agencies like CaLP may find it hard to convince the public that cash handouts are more effective than traditional aid, it’s not impossible. Given that media criticism constantly leveled at DFID centers around corruption and waste – the success of cash projects can challenge this narrative. Whether aid agencies are brave enough to extend cash projects, given this criticism, is another question.
In an article for CapX, Joe Ware, news and emergency communications manager at Christian Aid, addressed that concern.
“So why are there not more cash transfer programs in operation? Probably in part because agencies fear the kind of scare stories in the Daily Mail. But if the aid sector can trust people in the developing world to spend cash transfers wisely, then maybe it can trust people in developed countries to understand the value of good aid.”