Exploring Options for Targeting of Vulnerable People, Maldives
Over the past few decades, Maldives has experienced remarkable rates of economic growth and also achieved major achievements in social indicators such as health and education. However, due to various geographical, environmental and economic factors, Maldives remains highly vulnerable to economic and environmental shocks. The current social protection and safety nets programs in place have evolved over the years to address emerging issues of poverty, vulnerability and economic and social shocks. As a result, they tend to lack focus and uniformity in targeting to a large extent. In addition to the rationalization of the current social safety net programs, the newly elected government has embarked on a policy of Public-Private partnership as a means to procure public goods and services. It is also looking for ways in which the current subsidies awarded to SOEs and other public service providers can be better utilized through subsidizing cost of public goods and services to the needy. Both the privatization policy and removal of corporate subsidies would tend to increase the cost of essential services. Since the government has also pledged to reduce the cost of living, utility subsidies have recently been introduced to cushion the adverse impact of the rising prices following the removal of corporate subsidies. Due to the ad-hoc nature of the introduction of these programs, they tend to suffer large inclusion and exclusion errors. It is likely that a large proportion of these benefits are enjoyed by the middle to high income groups while some severely vulnerable groups are excluded. In fact, this was confirmed in a vulnerability study done in the country where it was found that most mainstream safety net programs were indeed pro-rich. This is especially true in cases where different programs overlap and eligibility for one dependent on the other. Additionally, in most programs, eligibility is determined on a case by case basis, the criteria are subjective and information required to determine eligibility is unverifiable. Thus, there has been a growing need for the rationalization of existing and proposed social protection and safety net schemes, which would in turn need a reliable and acceptable targeting mechanism to be developed. For a targeting method for safety nets: This would involve defining an appropriate targeting method appropriate for the Maldives, based on analysis of existing data (2002/03 HIES) and 2004/05 VPA). A new round of the household expenditure and income survey (HIES) was conducted last year and the data for Male is currently being cleaned and will be available by December 2010. The proposed targeting method should be validated, to the extent possible, using the more recent HIES (working in close consultation with the Department of National Planning) and the self-reported data currently being used for means testing utility subsidies (working in close consultation with the National Social Protection Agency).