XIV Congreso Internacional Del CLAD Sobre La Reforma Del Estado

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    XIV Congreso Internacional del CLAD sobre la Reforma del Estado y de la Administracin Pblica, Salvador de Bahia, Brasil, 27 - 30 oct. 2009

    El impacto de la crisis global en el mercado de trabajo de Amrica Latina:lecciones de las crisis anteriores

    Diana AlarcnSi bien el impacto de la crisis financiera en Amrica Latina no ha sido tan pronunciado comoen otras regiones, la contraccin del comercio internacional, la cada en las remesas, lareduccin de los flujos de inversin extranjera directo y la contraccin del financiamiento hantenido un gran impacto en la regin, con grandes costos sociales. 1

    Estimaciones recientes de la Cepal apuntan a una contraccin del comercioa abril de esteaodel 31,8% en relacin con el mismo mes del ao anterior, mientras que la cada en lasremesas puede ser de entre el 5 y 10 % en 2009 (entre el cuarto trimestre de 2008 y elprimer trimestre de 2009) y la cada en la inversin extranjera directa puede ser entre el 35 y

    45 %. El deterioro en las expectativas de las familias y las empresas que generan estastendencias, han provocado un reduccin generalizada en el consumo y la inversin del sectorprivado que redunda en un aumento del desempleo que puede llegar a 9 % hacia finales deeste ao, que significa ms de tres millones de personas adicionales.

    Aun cuando la economa mundial est mostrando signos de recuperacin, las perdidas en elempleo y el costo social que estas generan tienen impactos de ms larga duracin: larecuperacin de los ndices sociales generalmente toma el doble de tiempo que la de losndices econmicos, tal como sucedi durante la crisis de los aos 1980, cuando losindicadores sociales tardaron 24 aos en llegar a los niveles previos a la crisis y loseconmicos 12 (CEPAL, 2009, Estudio econmico de Amrica Latina y el Caribe 2008-2009 ).Incluso el escenario optimista que predice la recuperacin del crecimiento en 2010, una tasapromedio regional del 3.1% anual, sera insuficiente para revertir el aumento del desempleo yla informalidad que se estiman para este ao 2.

    Tendencias en el empleoILO construy tres escenarios para predecir los cambios en el empleo que acarreara la crisiseconmica a nivel mundial. En enero del 2009 se estimaba que el total de trabajadoresdesempleados aumentara entre 29 millones (en el escenario 1) a 59 millones (en elescenario 3) en el periodo que va de 2007 a 2009. Esto corresponde a una tasa dedesempleo de entre 6.5 a 7.4 respectivamente. En el escenario intermedio se estimaba queel nmero de trabajadores desempleados aumentara en 39 millones en el mismo periodo, loque corresponde a una tasa de desempleo del 6.8 por ciento y un nmeros totales detrabajadores sin empleo de 220 millones en 2009. En la actualizacin de estas proyecciones

    1Simplemente en remesas, el Banco Interamericano de Desarrollo estima que America Latina y el Caribe van a recibir cercade $62 billones de dlares en remesas en 2009, lo que representa una reduccin del 11 por ciento comparado con el aopasado debido a la contraccin en Estados Unidos, Espaa y Japn principalmente. La reduccin de las remesas afecta a 4millones de personas, de las cuales casi la tercera parte estn en Mxico, el pas con mayor recepcin de remesas en laregin.

    2 Las estimaciones de la Cepal se pueden consultar en: http://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/7/36467/P36467.xml&xsl=/prensa/tpl/p6f.xsl&base=/tpl/top-bottom.xsl (acceso 7septiembre 2009).

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    http://www.eclac.org/id.asp?id=36464http://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/7/36467/P36467.xml&xsl=/prensa/tpl/p6f.xsl&base=/tpl/top-bottom.xslhttp://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/7/36467/P36467.xml&xsl=/prensa/tpl/p6f.xsl&base=/tpl/top-bottom.xslhttp://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/7/36467/P36467.xml&xsl=/prensa/tpl/p6f.xsl&base=/tpl/top-bottom.xslhttp://www.eclac.org/id.asp?id=36464http://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/7/36467/P36467.xml&xsl=/prensa/tpl/p6f.xsl&base=/tpl/top-bottom.xslhttp://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/7/36467/P36467.xml&xsl=/prensa/tpl/p6f.xsl&base=/tpl/top-bottom.xsl
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    realizadas en mayo de 2009 se incorpor el deterioro en los mercados de trabajo observadoshasta ese momento que implicaron un aumento del nmero de desempleados a nivel globalde 21 millones de personas en el primer escenario, 31 millones en el escenario 2 y 50

    millones en el escenario 3. Con la informacin existente al momento, se estima que eldesempleo a nivel global est colocado entre los escenarios 2 y 3. 3

    Sin embargo, en los pases en desarrollo, el desempleo abierto es una expresin muy parcialdel deterioro de los mercados de trabajo. El desempleo no es opcin para la mayor parte delos trabajadores que no cuentan con seguro de desempleo, ni ahorros que les permitasubsistir por periodos muy largos. La prdida de empleos formales en esos pases y/o la faltade acceso a estos para una gran mayora de trabajadores, se traduce en altas tasas deempleo precario, de baja remuneracin y sin seguridad social. En base a las ltimasproyecciones sobre el crecimiento del producto a nivel mundial, la OIT estima que la tasa deempleo vulnerable flucta entre el 48.9 y 52.8 por ciento del empleo mundial, que se traduce

    entre 1.5 y 1.6 billones de trabajadores a nivel mundial.4

    Si bien Amrica Latina ha transitado la crisis en mejores condiciones dada su solvenciafinanciera, un buen ambiente de negocios, una acumulacin de reservas considerablelograda, en parte, por los altos precios de las materias primas de los ltimos aos 5, lasproyecciones de crecimiento en la regin para 2009 se han deteriorado desde el ltimoejercicio del FMI en enero del 2009. Se espera que las economas de Argentina, Brasil,Mxico y Venezuela se contraigan este ao, con una contraccin particularmente severa enMxico. 6 Las economas de Mxico, Centroamrica y el Caribea partir del turismosonparticularmente sensibles a la debilidad del crecimiento en Estados Unidos, mientras que laseconomas del Sur de Amrica Latina han sido afectadas por la cada en los precios de lasmaterias primas. En las ltimas proyecciones de la OIT, el desempleo en la regin afectaraentre 22.6 y 25.7 millones de trabajadores que corresponde a una tasa de desempleo deentre 8.1 y 9.2 por ciento.

    3En el primer escenario se utilizan las tendencias histricas que asocian el crecimiento econmico a los cambios en eldesempleo en cada pas entre 1991 y 2008 con las proyecciones sobre el crecimiento del producto del FMI para 2009. Elsegundo escenario esta generado a partir de la relacin entre el crecimiento econmico y el desempleo en el peor ano decontraccin observado en cada pas con las proyecciones sobre el crecimiento del producto del FMI para 2009. El tercerescenario esta construido tomando el peor ao de recesin econmica en cada pas y su impacto sobre el desempleo;asumiendo que este crecimiento en el desempleo ocurre simultneamente en todos los pases desarrollados en 2009 con unefecto retardado en los pases en desarrollo. Para estos ltimos, se estima que la mitad del aumento en el desempleo ocurre

    en el ao 2009.4 Empleo vulnerable se calcula como la suma de los trabajadores por cuenta propia y los trabajadores en empresasfamiliares como porcentaje del empleo total. http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_106504.pdf Accedido el 7 de septiembre de 2009.

    5Estas predicciones se pueden consultar en:http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22243070~pagePK:34370~piPK:34424~theSitePK:4607,00.html (Accedido el 7 de septiembre 2009).

    6En las ultimas estimaciones nacionales, Mxico calcula una caida del PIB de mas del 10 por ciento anual, mucho mayorque la contraccin observada durante la crisis del tequila en 1995-1996.

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    http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_106504.pdfhttp://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_106504.pdfhttp://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_106504.pdfhttp://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_106504.pdfhttp://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22243070~pagePK:34370~piPK:34424~theSitePK:4607,00.htmlhttp://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22243070~pagePK:34370~piPK:34424~theSitePK:4607,00.htmlhttp://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_106504.pdfhttp://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_106504.pdfhttp://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22243070~pagePK:34370~piPK:34424~theSitePK:4607,00.htmlhttp://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22243070~pagePK:34370~piPK:34424~theSitePK:4607,00.html
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    De manera paralela, se estima que el porcentaje de trabajadores en condiciones devulnerabilidad en Amrica Latina y el Caribe aumente para colocarse entre el 31.6 y 34.5 porciento del total de trabajadores en 2009.

    Respuestas frente a la crisisAmrica Latina es probablemente una de las regiones con mayor experiencia en el manejode condiciones de crisis. Desde principios de la dcada de los 80, la regin experimentperiodos recurrentes de crisis econmicas y financieras que llevaron a la implementacin dedistintas iniciativas sociales para paliar los impactos ms negativos de la contraccineconmica.

    La experiencia acumulada en la regin para responder a condiciones de crisis, le permitieron,no solamente enfrentar esta crisis global con una posicin ms slida desde el punto de vistade la macroeconomacon mejor estabilidad en las finanzas pblicas, tasas de cambio mas

    flexibles y reservas de divisas que le han permitido activar polticas anti-cclicassinoadems con una red de proteccin social que han sostenido una reduccin importante en laincidencia de pobreza y mejoras sustanciales en la cobertura de los sistemas de educacinbsica, salud y nutricin. La innovacin en el diseo e implementacin de programas socialesen Amrica Latina son ahora referentes importantes para el diseo de programas deproteccin social frente a condiciones de crisis en otras regiones.

    La evolucin de los programas de proteccin social en Amrica Latina ha dejado grandesenseanzas acerca de la efectividad de distintas formas de intervencin para protegerniveles mnimos de consumo entre la poblacin ms vulnerable y de proteccin social paraimpedir daos permanentes en la salud y en la acumulacin de capital humano entre lapoblacin. Los primeros programas de proteccin social que surgieron en los aos 80 frentea la crisis generalizada de la deuda, estaban diseados bsicamente para ampliar lacobertura de los sistemas de salud, educacin y saneamiento.

    Los Fondos de Inversin Social que se realizaron en muchos pases de la regin, intentabanampliar la infraestructura de servicios bsicos bajo es supuesto de que este era el factor quelimitaba el acceso a estos servicios entre poblaciones vulnerables.

    La evaluacin a este enfoque de oferta de servicios volc la atencin hacia loscondicionantes de la demanda de servicios con una propuesta que intenta generarestmulos a las familias para hacer un mejor uso de los servicios de educacin y salud paraaumentar la inversin en capital humano y romper, de esta manera, la reproduccin inter-generacional de las condiciones de pobreza.

    En ese sentido, Amrica Latina ha sido una regin pionera en la adopcin de programas detransferencias condicionadas de ingresos que intentan, no solamente reducir la pobrezaextrema en el corto plazo, sino mejorar las condiciones de salud y educacin de los niospara colocarlos en condiciones de mejorar su insercin laboral a largo plazo con mejoresingreso que les permita superar su condicin de pobreza.

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    Como puede verse en el cuadro adjunto, hay varios programas en la regin diseados bajoestos lineamientos. Los Progamas de Transferencias Condicionadas de ingresos se hanconvertido en un elemento central de las estrategias de reduccin de la pobreza con

    pequeas variaciones pero muchos elementos comunes: Seleccin de beneficiarios a partir del ingreso familiar (e indicadores geogrficos en

    algunos casos). Extrema pobreza Transferencia condicionada a cambios de comportamiento Tipicamente asistencia de nios a la escuela, atencin a la salud y nutricin Atencin integral a las familias (no los individuos) Estmulo a la demanda de servicios

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    Pas Nombre del Programa Fecha de Inicio

    Argentina Jefes y Jefas de Hogar Desempleados Abril 2002

    Brasil Bolsa Familia Octubre 2003

    BrasilPrograma de Garanta de Ingreso

    Familiar Mnimo (Renda Mnima)Junio 2001

    ChilePrograma Puente, entre la Familia y

    sus DerechosMarzo 2002

    Colombia Familias en Accin Noviembre 2000

    Ecuador Programa de Proteccin Social Junio 2000

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    Programs of cash transfers to the poor were introduced in Latin America as a way to reducethe negative impact the economic recession in the 1980s. Their importance increased in thelate 1990s, partly in response to the persistence of high levels of poverty in spite of severalyears of positive growth in the region. But they also reflected more fundamental changes inthe conceptualization of poverty and the means to reduce it. Conditional Cash TransferPrograms (CCTP) have gained relevance as a central piece of poverty reduction strategies inmany countries throughout the region and they are being considered as promisingalternatives in countries that have not yet adopted them.

    Earlier poverty reduction programs, including those that had a cash transfer component, wereconceived as programs of assistance to help families cope with that transitional costs ofeconomic hardship generated by the debt crisis in the mid-1980s and economic reform of theearly 1990s. The underlying assumption was that the main mechanism for poverty reduction

    was job creation and expansion of income opportunities of the poor through economic growth.The central effort of governments in the region was to restore macroeconomic stability andgrowth. In this view, poverty reduction programs were a temporary safety net to smooth theimpact of recession on the poor until growth and stability were restored.

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    Pas Nombre del Programa Fecha de Inicio

    HondurasProyecto Pograma de Asignacin

    Familiar BID Fase IIEnero 1999

    JamaicaPrograma de Promocin a travs de

    Educacin y Salud (PATH)Diciembre 2003

    Mxico Programa de Desarrollo Humano

    OportunidadesAgosto 1997

    Nicaragua Red de Proteccin Social Enero 2000

    PerTransferencias Condicionadas en

    EfectivoMarzo 2005

    Repblica

    DominicanaTarjeta de Asistencia Escolar (TAE) Octubre 2001

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    Since the late 1990s Conditional Cash Transfer Programs (CCTP) have been adopted as acentral part of poverty reduction strategies in Latin America. With important variations fromcountry to country that reflect different contexts but also the particular evolution of poverty

    reduction programs, they all share important common elements. Governments grant cashtransfers to families in extreme poverty (usually identified by level of income and few otherindicators for geographical location and socio-economic characteristics of families).

    In exchange families are committed to send children to school on a regular basis and attendhealth clinics to receive basic prevention. Different conditionalities have been incorporated invarious countries (attending talks to parents to improve health habits and nutrition, acceptingadvice to improve the dynamics of family life, etc.). But conditionality typically includes abehavioral change towards education and health. The underlying assumption is that byestimulating greater investment in human capital, labor productivity of young entrants to thelabor force will improve their opportunities to increase income breaking the vicious circle of

    poverty.To the extent that CCTP incorporate interventions to simultaneously improve the level ofincome of beneficiaries, school attendance and health care they offer an opportunity toimprove coordination among different levels of government and other stakeholders. Some ofthe programs designed around these criteria include: Chile Solidario, Oportunidades inMexico, Bolsa Familia in Brasil, Familias en Accin in Colombia, the Program AsignacinFamiliar in Honduras, Program of Advancement through Health and Education (PATH) inJamaica, Red de Proteccin Social de Nicaragua, Programa Beca Futuro in Bolivia, Bono deDesarrollo Humano in Ecuador.

    An interesting feature in the design of CCTP is the construction of sound information systemsthroughtout implementation of the program that has helped improve monitoring and theevaluation of results 8. Evaluation of some of the earliest programs (Brazil and Mexico, butalso Colombia and Nicaragua more recently), show significant improvements in schoolenrolment, especially in secondary school; improvement in assistance to primary health carefacilities and greater consumption among families in extreme poverty. Impact of theseprograms in current poverty reduction, obviously depends on the coverage and the level ofincome transfered to families.

    The long term impact of these programs breaking the vicious cycle of poverty (an explicit andimportant objective of these programs) is more difficult to evaluate. It will have to wait a fewyears when children start entering the labor markets. Estimation of long term impact atpresent crucially depends on the assumptions made on the returns to the education andhealth of children in future labor markets.

    8Some of these programs have used rigorous methodologies to measure results building experimental models (within theprogram Oportunidades in Mxico for example) or through the construction of control groups, including in some cases theex-ante evaluations to support evaluation of alternatives in program design. Some of these studies include: Gertler, 2000,Hoddinott, Skoufias y Washburn, 2000, IFPRI 2000 y 2002, Schultz 2000, Skoufias and McClafferty, 2001, World Bank,2001, Bourguignon, Ferreira and Leite, 2003.

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    CCTP have become a central component of policies adopted by many Latin Americancountries ro reduce poverty. Resources allocated fluctuate from 0.12 per cent of GDP inColombia in 2002, to 0.32 per cent in Mexico and Jamaica in 2002 and 2004 respectively.

    Level of transfers in other countries has been smaller, but almost all countries are increasingthe amount of resources committed to these programs to become a central component ofgovernments strategies to reduce poverty (Rawlings, 2004). In Brazil, for instance, thegovernment consolidated previously dispersed transfer programs to support education,nutrition and gas consumption (Bolsa Escola, Bolsa Alimentacao and a Gas Subsidy) and isturning Bolsa Familia in the largest CCTP in the world, both in terms of the number of familiescovered and the amount of financial resources transfered.

    While the design of CCTP addressed many of the problems identified in previous transferprograms, there is still controversy around some of the following issues: i) CCTP are orientedto estimulate the demand of poor families for basic services in education and health, but they

    are not necessarily helping to improve the supply of such basic services. In the worst caseescenario, without an increase in resources or substantial reforms in service provision, alarger demand estimulated by CCTP would contribute to overcrowding and furtherdeterioration of already thin public services; ii) conditionality runs the risk of excluding thepoorest of the poor in countries with a large incidence of poverty and geographical dispersion

    where there are no schools or health posts to meet the conditions for participation in theprogram; iii) changes in the power relations within the family (typically cash transfers aredisbursed to mothers) are create tensions in some countries; iv) especially among indigenousand traditional communities, the selection of beneficiaries based on the socio-economicindicators of individual families is challenging traditional leadership and may become a sourceof tension within the community; v) cash transfers may generate negative incentives towards

    work by parents 9; vi) with the exception of Brazil, management of CCTP is highly centralized within the government and may counter efforts towards the descentralization of publicservices; vii) better use of good quality statistical data for the selection of beneficiaries, hasreduced discretionality in the selection of beneficiaries, but criticism remains about thepolitical use of information and benefits 10 .

    An additional factor that will have to be included in the evaluation of these programs aseffective mechanisms for poverty reduction is their cost effectiveness. A recent study ofOportunidades in Mexico (Coady, Prez and Vera-Llamas, 2005) found that theadministrative costs of the program, which represent about 11 percent of total resourcesallocated to the program in recent years under-estimates total costs because they do notincorporate the private costs incurred by beneficiaries to access cash transfers and comply

    with conditionalities 11 . The estimation of costs in relation to the total budget is notstraightforward. Cost reporting varies from country to country and not all costs are fullyaccounted for.

    9In the case of Mexico, the evaluation ruled out the existence of such substitution effects...... But it is not an issue that hasbeen sistematically evaluated in other countries.

    10An illustration of this point is the controversy generated in Mexico by the appointment of the former Minister of SocialDevelopment to lead the presidential campaign of her political party for her knowledge of the operation and access to theinformation of beneficiaries of Oportunidades.

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    Assumptions made about the time duration of the programs will also be critical in theestimation of administrative costs. The only point we are trying to raise here is that any effortto assess the impact of CCTP vis a vis alternative interventions would need to include proper

    estimation of private costs, an issue that deserves further evaluation.Comprehensive systems of monitoring and evaluation of CCTP have helped to refine thedesign and implementation of CCTP improving their impact. They have contributed to givecontinuity to these programs inspite of political renovation in countries where oppositiongovernments have win elections (this is the case of Oportunidades in Mexico that took afterProgresa and Bolsa Familia in Brazil that grew out of Bolsa Escola). Yet, difficult challengesremain. In the short term, creating mechanisms to improve inter-sectorial coordination tomake sure greater demand for services is consistent with the provision of quality publicservices. In the long term, breaking the vicious cycle of social exclusion and lack ofopportunities to revert the inter-generational transmission of poverty will remain a difficult

    challenge. Increasing years of schooling and their health status are critical factors in the earlydevelopment of children and expands their opportunities for an active participation in society.

    But the extent at which better schooling and health will expand their opportunities to improvelabor earning will depend on the relevance of education and the dynamism of labor markets tocreate better remunerated jobs to accomodate the improved skills of young entrants. It willalso depend on the opportunities young workers have to access credit, product markets andtechnology to support more dynamic growth of micro and small entrepeneurs. The inter-sectoral approach CCTP have incorporated in their design opens up new opportunities toimprove policy coordination in areas that are critical to the success of long term povertyreduction: improvement in the quality and relevance of education, the expansion of jobopportunities to new entrants, deepening of credit markets to respond to the needs of smallscale producers, the creation of new platforms for technological innovation in the productsand processes that are relevant to the poor, the creation of new forms of association amongsmall producers and between small and larger companies, expansion of social and economicinfrastructure to improve market access to name a few areas that remain constrains to theexpansion of employment and productive opportunities to the poor restricting their earningsand contributing to the inter-generational reproduction of poverty.

    By dissagregating the various sources of income changes in Brazil, Chile and Mexico sincethe 1990s, this paper seeks to provide empirical evidence of the relative importance of othersources of income for the poor (where resources from CCTP would be captured), vis a visearnings from labor of the current generation of beneficiary families. In the next section webriefly review the characteristics of CCTP in Brazil, Chile and Mexico with the aim of providingthe policy framework that may help to explain the origen of other sources of poor household

    11Administrative costs in the study include the cost of identifying beneficiaries, disbursement of cash transfers to familiesand verification of compliance with conditionalities. Actual administrative costs depend on the time horizon of theseprograms. Identification of beneficiaries as one of the most expensive components of the program is substantially reducedover the long term. Private costs include the income of working children and transportation costs to the health unit, theschool (especially relevant at the secondary level) and the post to collect payment when applicable. A low cost estimate ofprivate costs in Mexico amount to 20 percent of the total cost of the CCTP in the short run and 36 percent in the long run,when some of the most expensive components of the administrative costs are reduced.

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    income identified in recent surveys. A hypothesis we are contemplating in this paper is thatimprovement in the design of CCTP in these countries has helped to concentrate cashincome among the extremely poor, explaining the increasing importance of other sources in

    the income of those at the bottom of the distribution.ChileChile is probably the country with the longest experience of highly targeted social programs.The macro-economic orthodoxy of the military government placed a heavy emphasis on thecreation of markets even in basic services that were once provided and or regulated by theState. Extreme targeting for the delivery of basic service to the poor were refined over timeand backed up with improved systems of information to identify the poor. Sectoral policiesincluded specific interventions whose chief objective was to avoid leakages of limitedresources to the non-poor.

    Recovery of democracy in 1990 broadened the constrains of strict targeting of social policyand redifined its role as an instrument to reach the poor in order to meet the goal of universalprovision of basic social services. During the 1990s macroeconomic stability and rapid growthhelped to reduce the level of poverty in the country. Absolute poverty almost halved from 38.6percent in 1990 to 20.6 in 2000. By 1996 extreme poverty was also reduced by half; from 12.9to 5.7 percent (Mideplan, 2004) but no substantial progress was made thereafter. In the year2000 the government of Ricardo Lagos introduced the program Chile Solidario to estimulatethe demand for basic education and health care among families in extreme poverty. Theprogram is centered around the family, not the individual, as the unit of intervention. Itincludes an element of personalized support to families in extreme poverty to identify theirspecific needs and match them with the supply of government sponsored services. Theobjective is to work directly with families to expand their opportunities to reach markets,develop skills and strenghten the dynamics of family life to estimulate shared familyresponsibilities and promoting their autonomy for the generation of income and their socialintegration to community life.

    Chile Solidario is designed to reach 225 families (800 thousand people) in extreme poverty,including 15.6 thousand elderly in extreme poverty and living alone. It consolidates formerprograms that subsidized water consumption and sanitation and replaces other Statesponsored pension systems. Not all services included in Chile Solidario represent directsubsidies to families. Secondary school attendance is estimulated through subsidies to schoolproviders. A family that qualifies to participate in Chile Solidario receives a small cash tranferfor the first 2 years to guarantee minimum levels of income. Participation in the program isconditioned upon compliance with 52 conditions estipulated in the contract subscribedbetween the government and each family. Once families graduate from the program theyqualify for an exit bonus for 3 more years to support a minimum consumption while theyconsolidate their independence to generate autonomous income. Subsidies for the elderlyand handicaped in extreme poverty are permanent. Once a family has qualified to be includedin Chile Solidario, they have preferencial access to government services in the areas whereassistance is required within the development dimensions that are part of the program:identity cards, health, education, housing, jobs, income and family dynamics.

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    The first phase of Chile Solidario started operations in January 2002 with benefits for 56thousand families. It became a law in 2004 and by the end of 2005 it had reached its target of225 thousand families (Mideplan, 2006). It has been gradually replacing resources transfered

    to the poor through other programs. Resources for this program increased significantly; from101 million pesos in 2002-2003 to 11,786 million in 2003 and 40,864 million in 2004 (almost66 million dollars at a 620 pesos conversion rate). But even with this increase in resourcesChile Solidario still represents a small portion of monetary subsidies for poverty reduction. In2003, 57 per cent of social investment channeled through Ficha CASmain instrument for theidentification of the poor, currently called Ficha Familia) were cash transfers (excludingresources from Chile Solidario).

    It is difficult to have the exact dollar amount of cash transfer programs because not allsectoral programs from past policies have been replaced. Table 1 offers an approximatefigure estimated for those social programs that use the Ficha CAS (currently Ficha Familia) to

    target their beneficiaries. In 2003 monetary transfers to families were about 444.8 milliondollars (assuming most resources from Chile Solidario took the form of direct cash subsidies).Direct cash transfers in that year were close to 60 percent of total social investment allocatedthrough Ficha CAS. And almost 70 per cent such transfers corresponds to subsidizedpensions to the elderly. Mechanisms for targeting in Chile are fairly efficient; 56 per cent ofsubsidized pensions for the elderly and 67 of the subsidies for poor families are allocated tothe 20 per cent bottom of the distribution. And between 78 and 87 per cent of respectivesubsidies are captured by the poorest 40 per cent (Tables 2 and 3).

    Two points are evident from information provided in this brief review: Chile has a long traditionin the use of targeting for the delivery of goods and services. Social programs have goodsystems of information and relevant managerial experience to reach the poor. Cash transfersfor poverty reduction have succesfully reached the intended population helping to improve thelevel of income and consumption of the poor. But the size of transfers is small whencompared to other programs in Latin America. In 2003 total cash transfers that can bedocumented from available information represent 0.15 percent of GDP and they are intendedto reach no more than the 5.7 percent of the population in extreme poverty. Once we add thetransfer of subsidized pensions, total transfers represent 0.5 percent of GDP.

    BrazilAdopting the poverty line proposed by the World Bank to estimate extreme poverty (US$1.08a day adjusted by the cost of living of the various regions), 27.8 percent of people in Brazil(21.9 percent of families) are poor. Extreme poverty is greater in rural areas, affecting 46percent of people. In June 2004, 4.1 million families (approximately 16.5 million people)benefited from Bolsa Famlia the largest cash transfer program in the world. In 2005 BolsaFamilia reached 8.7 million families with a budget of 6.5 billion reales. In 2006 coverage isexpected to increase to 11.2 families 12 .

    12Interview with Marcia Lopes, Executive Secretary in the Ministry for Social Development and Reduction of Hunger,Folha de Sao Paulo, January 2006).

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    Bolsa Familia consolidates other cash transfer programs from previous governments in Brazil:Bolsa Escola, Bolsa Alimentacao, Cartao Amimentacao and Auxilio Gs were designed toestimulate school attendance, better health care, food consumption and a subsidy to gas

    consumption to compensate for the cost of adjustment. Administration of these programs wasthe responsibility of different government offices creating duplications, gaps and inefficiencies.Bolsa Familia was designed to resolve these problems but is not the only source of cashtransfer. Other programs include guaranteed minimum income to rural residents; PETI, BPC PPD, BPC Idosos and Agente Jovem which include direct cash transfers for children, youngpeople and people living with AIDS. But Bolsa Familia is, by far, the largest cash transferprogram within Brazil. Making a rough estimate from information available and assuming thatall resources allocated to the other programs (excluding rural minimum income) take the formof transfer payments to families, they represented about 6.7 percent of resources transferedby Bolsa Familia in 2005 (MDS, 2005).

    Bolsa Familia started operations in 2002 with five explicit objectives: (a) consolidating andrationalizing existing federal conditional cash transfer programs; (b) promoting efficiency inthe use of public resources; (c) improving the system for identifying the target population; (d)leveraging synergies from jointly promoting education, health and nutrition incentives; (e)strengthening monitoring and evaluation; and ( f ) leveraging opportunities to promote verticalintegration in the social safety net between federal and sub-national programs (quoted inWorld Bank, 2004).

    The priority within Bolsa Familia are families in extreme poverty (with a per capita incomebelow R$ 50 a month or US$ 17). But it also targets the moderately poor defined as thosefamilies with a per capita income below R$ 100 (US$ 34) a month. Cash transfers range fromR$ 15-95 (US$5-33) depending on the composition and level of income of families. Theaverage transfer per family has substantially increased every year. In 2003 average transfers

    were R$ 24.75 a month, it increased to R$ 66.93 in 2004 and to R$ 64.67 in 2005 equivalentto US$ 22.3.(MDS, 2005). This amount is significantly higher than the average benefitsreceived from previous programs but it is a fraction of the poverty line. It was about 17percent of the poverty line used by the World Bank, 10.8 percent of IPEAs and 5.4 percent ofthe minimum wage, based on the average transfer per family in 2005.

    The consolidation of previous programs for poverty reduction and substantial increase inresources available through Bolsa Familia was estimulated by the persistence of high povertyincidence in Brazil that remained at around 30 percent since the mid-1990s; compounded bythe recent economic slowdown which brought a sharp increase of poverty, especially in themetropolitan areas of the Southeast. Young people entering the labor market, unskilled

    workers, indigenous people and afro-descendents are markedly affected by high, oftenincreasing, incidence of poverty. Similar to other programs in Latin America, Bolsa Familia

    was conceived as a program to support minimum levels of consumption among the poor, while they invest in the human capital that would help them generate autonomous income inthe future.

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    The coverage of Bolsa Familia has met (sometimes exceeded) its own targets every year. In2003 it had reached 3.6 million families and it almost doubled in 2004 with transfers to 6.6families. By October 2005 there were 8 million beneficiary families in Brazil. Remanents from

    other programs (Bolsa Escola, Cartao Alimentacao, Auxilio Gs and Bolsa Alimentacao) addanother 3 million beneficiary families. Table 4 shows a substantial increase in resources since2002 and the growing importance of Bolsa Familia as it replaces previous transfer programs.Relative to GDP total resources transfered under these programs are estimated to increasefrom 0.2% in 2003 to 0.5% by 2006.

    An early evaluation of Bolsa Escola (Bourguignon, et. al. 2003) found a significant impact onschool enrolment, especially at the secondary level, but they found no impact on povertyreduction or inequality. The size of transfers was rather small. Once cash transfers in Brazil

    were substantially increased with the adoption of Bolsa Familia, a recent study by the WorldBank estimated that an average transfer of R$71 (US$24) to 11.2 million families by end 2006

    could result in a large reduction of extreme poverty, from 14.5% to 8.1% and a reduction inoverall poverty (extreme + moderate) from 33.3% to 29.9%. This transfer could reduce theGini Coefficient of income inequality from 0.595 to 0.578 and would help to improve the yearsof schooling among children by 3.4%. Results are predicted assuming there is perfecttargeting of subsidies to the poor and no change in any other source of income for the poor.

    MexicoOportunidades is the continuation of Progresa, introduced in 1997 to support rural families.Oportunidades became the flagship program for poverty reduction in the administration ofpresident Fox. In the year 2000 coverage was extended to semi-urban and urban areas. By2005, almost 5 million families in Mexico received benefits from Oportunidades; 69 percent inrural areas and another 17.4 percent in larger rural areas, classified as semi-urban (Table 5).

    As a conditional cash transfer program families in extremely poor are responsible to enrolchildren at school and supervise their attendance for at least 85 percent of school days. Theyare also expected to assist to health facilities on a regular basis to receive primary healthcare. In addition, mothers are expected to attend workshops where they receive nutritionalinformation and advice on other health issues. Families receive a cash transfer for each childattending school, from third grade of primary education to high school.

    The amount of grants for school attendance increases with the level of education; it isestimated to cover the income contribution of working children to the household and it isslightly higher for girls at secondary level when women are more likely to drop out of school. Asmall stipend is also provided for books and school materials twice a year (Table 6). Inaddition, families who qualify for Oportunidades receive a small cash transfer to support foodconsumption. Failure to meet any of the conditions in the program results in the suspension ofstipends transfered to families every two-months 13 .

    13In the third quarter of 2004, only 4.4 percent of beneficiaries were identified as non-compliance on the assistance tohealth facilities. Sedesol, 2004. Impact Evaluation

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    Coverage of the program had a rapid expansion since 2000. Five million families in 2005 areslightly over one fifth of the total number of households in the country and over one fourth ofthe total population. Sedesol (the Secretariat for Social Development responsible for the

    administration of the program) estimates that there are 5.6 million households in extremepoverty in Mexico. Assuming perfect targeting, coverage from Oportunidades would reach89.3 percent families and 81 percent of individuals in extreme poverty.

    The budget allocated to Oportunidades has also grown fast. In 1999 resources for Progresa were 0.16 percent of GDP. By 2005 the relative importance of Oportunidades more thandoubled to represent 0.38 percent of GDP. Direct transfers to families, however, is muchsmaller. A large part of the budget supports the expansion of services within the Ministries ofHealth and Education to accomodate an increasing demand for services. Part of the budgetgoes to the purchase of a nutritional supplement for children under 5 years of age and forpregnant and lactating mothers 14 distributed by the Mexican Institute for Social Security

    (IMSS).CCTP in Mexico havebeen one of the best evaluated programs of this kind, since its earlyintroduction as Progresa 15. Positive results in promoting school attendance documented inexternal evaluations were critical to give sustainability to the program, even in face of thecomming to power of an opposition government in the year 2000 for the first time in 70 years.More recent evaluations report a substantial increase in the visits of beneficiaries to healthclinics in urban areas and rural areas, including attention to pregnant women, inmunizations,family planning, basic treatment for diarrea and respiratory problems and preventive checkups. In 2003 Sedesol reported that resources transfered through Oportunidades represented22 percent of the total consumption of rural families and 15 percent consumption of urbanfamilies 16 .

    ReferenciasBourguignon, Franois; Ferreira, Francisco and Leite, Phillippe G. 2003. Conditional

    Cash Transfers, Schooling, and Child Labor: Micro-Simulating Brazils Bolsa Escola Program.The World Bank Economic Review , Vol. 17, N. 2 229-254. Washington, D.C.: World Bank

    Coady, David; Prez, Ral and Vera-Llamas, Hadid. 2005. Evaluating the cost ofPoverty Alleviation Transfer Programs: an Illustration based on PROGRESA (now Oportunidades) in Mexico. Economic and Sector Study Series, Region II. RE2-05-006,December 2005. Washington, D.C.: Inter.-American Development Bank

    De la Brire, Bndicte and Lindert, Kathy. 2005. Reforming Brazils Cadastro Unico toImprove the Targeting of the Bolsa Famlia Program. Social Protection Discussion PaperSeries, 32757, N. 0527, June 2005. Human Development Network. Washington, D.C: WorldBank

    14The supplement is distributed to all children under 2 years of age, pregnant and lactating mothers that qualify forOportunidades. Children who are 2 years of age and less than 5 also qualify for the nutritional supplement when they sufferfrom malnutrition or are recovering from it.

    15One of the first external evaluations was performed by IFPRI.

    16Sedesol, 2004. Evaluacin de Impacto.

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    Divisin de Planificacin Regional, Ministerio de Planificacin y Cooperacin. 2004.Gasto Pblico Social Regional 1990-2003. Chile: Gobierno de Chile

    Document of The World Bank. 2001. Brazil, As Assessment of the Bolsa Escola

    Programs. Report N. 20208-BR, March 15, 2001. Human Development Sector ManagementUnit, Brazil Country Management Unit, Latin America and the Caribbean Regional Office.Washington D.C: World Bank

    Document of The World Bank. 2004. Project Appraisal Document on aProposed adaptable Program loan in the amount of us$572.2 million to the Federative

    Republic of Brazil for a Bolsa Familia Project in support of the first phase of the Bolsa FamiliaProgram. Report N: 28544-BR. May 25,2004.Washington, D.C.: World Bank

    Ministerio de Planificacin y Cooperacin, MIDEPLAN Sistema de proteccin socialChile Solidario. Divisin Social. 2004. Conceptos Fundamentales. Sistema de ProteccinSocial Chile solidario, diciembre 2004. Chile: Gobierno de Chile

    Ministerio de Planificacin y Cooperacin, MIDEPLAN Sistema de proteccin social

    Chile Solidario. Divisin Social. 2004. Ficha Familia Ms y mejor focalizacin en una nuevaetapa del desarrollo social del pas, septiembre 2004. Chile: Gobierno de ChileMinisterio do Desenvolvimento Social e Combate Fome. 2005. Balano MDS.

    Programas Sociais. Brasil: http://www.mds.gov.br/ascom/Palma, Julieta and Urza, Ral. 2005. The Chile Solidario Experience. Anti-poverty

    Policies and Citizenry: Policy Papers No. 12. Francia: UNESCORawlings, Laura. 2004. A New Approach to Social Assistance: Latin Americas

    Experience with Conditional Cash Transfer Programs. Social Protection Discussion PaperSeries No. 0416. Washington, D.C.: World Bank

    Skoufias, Emmanuel. 2005. PROGRESA and Its Impacts on the Welfare of RuralHouseholds in Mexico. The International Food Policy Research Report , 139. Washington,D.C.: International Food Policy Research Institute.

    Sadoulet, Elisabeth; Finan, Frederico; de Janvry, Alain and Vakis, Renos. 2004. CanCondicional Cash Transfer Programs Improve Social Risk Management? Lessons forEducation and Child Labor Outcomes. Social Protection, The World Bank, SP Discusinpaper N. 0420, December 2004. Washington, D.C.: World Bank.

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