In wealthy countries, a few dollars isn’t expected to stretch very far and this kind of money is spent on magazines or a cup of coffee. But across the world, one in five people live on less than 2 dollars a day and 1.4 billion people manage on less than 1 dollar. For the world’s poorest, even having a regular income of an extra few dollars a week can be a lifeline.
This is the idea behind conditional cash transfer (CCT) schemes, which pay poor families a small cash sum regularly. Introduced almost ten years ago, Colombia’s CCT programme is known as ‘Families in Action’. It targets the poorest families by means-testing those who earn less than 1 dollar a day. These families are then eligible to receive a cash payment of 15 dollars every two months. This is normally paid to the mother of the family and in return, certain conditions must be met. Women have to attend health workshops and make sure their children receive regular health check-ups. Children must also be vaccinated and their school attendance must be higher than 80 per cent.
Over 2.6 million Colombians receive cash transfer payments under the ‘Families in Action’ programme. One of these is Nancy Diaz, a single mother of three who lives in Bogota. Nancy says that the extra money allows her to “put food on the table” and also have a little more to spend on nappies and milk for her children. Research suggests that the scheme has helped to reduce the incidence of stunting among children under two in Colombia by 7 per cent and lowered the number of reported cases of diarrhoea by 11 per cent.
This kind of cash giving started as an initiative in Mexico and CCT schemes now operate in 15 Latin American countries, reaching approximately 100 million people. While the success of the programmes varies from country to country, many are viewed as having a significant impact on reducing poverty, particularly Brazil’s ‘Bolsa Familia’ and Mexico’s ‘Oportunidades’. The success of the schemes is attributed to the fact that the money is targeted at the poorest families and also that it is paid to mothers. Women who receive this kind of state subsidy are much more likely to spend the money on the basic needs of the family, such as food and clothes, rather than on drinks or cigarettes, as men are more inclined to do.
Though the schemes are one way of tackling extreme poverty, they are not a panacea for improving the lives of the poor. Some experts are concerned that the cash spent on such programmes comes at the expense of other vital services, such as good health care and education. It’s no good making sure children attend school, if the quality of their learning is too poor for them to improve their chances in life. But judging by the fact that similar CCT schemes are now operating in other parts of the globe (such as South Africa’s ‘Child Support Grant’ and India’s ‘National Rural Employment Guarantee Scheme'), some kind of regular transfer of money is seen as a good first step to tackle the worst poverty.