Consistently inconsistent

From 1989 to 1992 Germany supported Mozambique in the development and implementation of a cash transfer programme, deploying two short-term experts to the country. The idea was to provide the equivalent of around $ 10 to extremely poor households without members capable of work – for instance families who had lost their breadwinner in the civil war. This approach was bold, no doubt. At the time, both German and international observers considered it problematic to support a social assistance programme in a least developed country.

Today, the intervention is fully funded by Mozambique’s national budget. It was originally known as GAPVU, named after the lead agency Gabinete de Apoio à População Vulnerável (Office for the Support of Vulnerable People). At present, the programme is run by the Instituto Nacional de Acção Social (National Institute for Social Action) and called INAS accordingly.

Despite evident Mozambican demand, Germany aborted its support in 1992 out of fear of violating the principle of “helping people to help themselves”. UNICEF and Switzerland stepped in to compensate for the German agency GTZ’s withdrawal.

History was to repeat itself ten years later when Germany once more cautiously fathomed a social transfer initiative, helping Zambia’s government to draft and implement a cash transfer pilot programme in the district of Kalomo. Like INAS in Mozambique, this programme was about providing money on monthly basis to extremely poor households that had lost their breadwinners, mostly to HIV/AIDS.

The donor community classified the project as innovative and groundbreaking. Many international delegations paid visits. In March 2006, the African Union (AU) hosted a conference in Livingstone to inform ministers, state secretaries and directors of social services departments from 13 African countries about the Kalomo approach. The conference approved the “Livingstone Call for Action”, demanding that social transfer programmes be adopted in all African countries (Schubert et al., 2006).

At the time, the delegate from the German embassy wrote an enthusiastic paper for Germany’s Federal Ministry for Economic Cooperation and Development (BMZ). Soon similar programmes were to spring up in Malawi, Ghana, Liberia, ­Kenya and eventually Zimbabwe. A ­Google search on “Social Cash Transfers Kalomo” yields hundreds of results. Kalomo is generally considered a milestone in the quest for effective social protection in sub-Saharan Africa.

Withdrawal after success

To much surprise, however, Germany discontinued its support for the expansion of the Kalomo approach to further districts in Zambia. This decision caused consider­able bewilderment and indignation on part of the partner government, the German staff and the donor community in general. According to the director of the BMZ division responsible for the region, the project did not fit the priorities of German co­operation in Zambia. Since the project was close to the end of its orientation phase, termination of support was deemed unproblematic under international law.

And today? In January 2008, the Bundestag passed a resolution with support from all parties. It demanded that the Federal Government give more support to developing and emerging-market countries in the field of social protection. “The relevance of this issue should be reflected institutionally and adequately in the priorities of the Federal Ministry for Economic Cooperation and Development,” the resolution stated.

So far, there has been no serious response to this demand. Social protection is neither among the eleven focal points of Germany’s development cooperation (such as health, food security or water), nor among six key sectors determined by the new government that took office in 2009. So the question arises whether social protection has really become a priority of German development policy.

The picture remains ambiguous. At least Germany has pledged to spend
€ 13 million on the extension and enhancement of Malawi’s Social Cash Transfer Programme. KfW Entwicklungsbank, Germany’s governmental development bank, is set to begin disbursing the money this year. The Malawian programme itself is a result of the Livingston Conference and is modelled after the Kalomo example. Apart from this planned cooperation with Malawi and the four technical assistance projects in El Salvador, Indonesia, Vietnam und Central Asia, however, there is currently little German support to social cash transfer programmes.

Britain’s substantial commitment

Things are very different in the United Kingdom. In the coming years, the Department for International Development (DfID) plans to fund cash transfer initiatives in 16 countries. One of them is Zambia, where the UK has been supporting the Kalomo approach for years. DfID recently pledged $ 65 million for the extension of cash transfers to further Zambian districts.

Over the past year, British development agencies published numerous articles that focused on cash transfers. April 2011 saw the publication of a 115-page “DfID cash transfers evidence paper”, an evaluation of the instrument in the context of the Millennium Development Goals. It comes out strongly in favour of an increased use of cash transfers. DfID generously sponsors relevant research, training and publications. Beneficiaries include the Manchester Chronic Poverty Research Centre, the Overseas Development Institute, the Institute for Development Studies and a number of similar British university institutes.

DfID also funds NGOs such as Helpage International (which promotes social pensions for the aged), Save the Children (which provides cash transfers for AIDS orphans) and OXFAM (which utilises cash transfers in the context of humanitarian aid). Finally, DfID supports African institutions like the Regional Poverty and Hunger Programme, which champions the “silent revolution” through its internet magazine WAHENGA and through research and conferences.

While the DfID currently plays a leading role in the promotion of cash transfers, other donors, including the EU, World Bank, ILO and UNICEF, are also actively engaged. At present, hardly a month ­passes by without a new publication, conference or workshop being dedicated to the topic.

So how should Germany’s development cooperation contribute to social protection in the future? What is now required is the broad scale applications of the lesson learned, based on the experience of German and international development agencies. There is clear evidence that cash transfers are an effective tool for achieving the Millennium Development goals and for poverty reduction, which is the overarching objective of German development cooperation. The priority should be to support the cash transfer programmes that are planned and implemented by the governments of developing countries, especially in southern Africa, where societies have been hit hard by HIV/AIDS.

Germany should make use of its comparative strengths in the field of social protection. This country has decades of experience with social transfers domestically and can offer innovative concepts for designing and funding social protection programmes. Partner countries appreciate Germany’s good reputation. The national Parliament and civil society take an interest in these matters. It would be a pity if Germany did not rise to the challenges with determination. Financial support for Malawi’s programme is a step in the right direction.