Adaptive Social Protection for Effective Disaster Risk Management1 Photo by: Gajendra Shrestha/World Bank CONTEXT with disabilities, children, and endangered ethnicities. Overall, the government spends Poverty and vulnerability to shocks are widespread in Nepal. substantial resources on these programs, Nepal is highly vulnerable to substantial natural hazards, including over NPR 104 billion, or 3.6% of GDP, in earthquakes, floods, drought, and landslides. The difficult and varied 2017/18, though a large share went for public topography and the significant social vulnerability make the country pensions. However, the programs are mostly particularly susceptible to the negative impacts of climate change. The categorical in nature and not designed to shocks devastate especially the poor and the vulnerable. A quarter of build resilience of the poor and vulnerable the population is poor, and a significant share of the population is at risk households or respond to shocks. of falling into poverty as a result of shocks. A third of the households reported that they experienced at least one shock in 2016–17.2 The 2015 The Disaster Risk Reduction and earthquake is estimated to have pushed an additional 2.5%–3.5% of Management Act of 2017 is the Nepalese into poverty.3 Much of the population is also vulnerable to cornerstone of the government’s shocks linked to large-scale economic, political, and health shocks. disaster risk management strategy. With this law, the government Nepal has a large portfolio of social protection programs, which, has broadened its focus from the however, are not yet adaptive. The programs include public sector traditional reactive approach to a more pensions, Social Security Allowances (SSA), scholarships, health comprehensive disaster risk management subsidies, and public works and are implemented by a variety of strategy that focuses on all stages of the institutions. The SSA account for the largest program, which provides disaster management cycle: mitigation, transfers to over 2.3 million senior citizens, single women, individuals preparedness, response, and recovery. The Act also has provision for addressing 1 This policy note was drafted by Jyoti Pandey and Soyesh Lakhey based on World Bank (2018) Strengthening linkages between social protection and disaster risk management for adaptive social protection in Nepal, World Bank, Washington DC. the impacts of disasters on livelihoods, 2 World Bank, 2017. Nepal Household Risk and Vulnerability Survey (NHRVS), Wave 2. Unpublished Data. The microdata in addition to housing and infrastructure for the first wave of data collected is available at http://microdata.worldbank.org/index.php/catalog/2905 3 National Planning Commission (2015) Nepal Earthquake 2015: Post Disaster Needs Assessment, 2 vols., Kathmandu. damage.4 It creates a National Disaster Risk 4 In article eight, the Act refers to special plans and programs for women, children, senior citizens, Dalits, marginalized groups and communities, and people with disabilities and others who are especially at risk during disasters and to the restoration Reduction and Management Authority, of economic activities, the creation of employment opportunities, and income generation through livelihoods. which has not yet been established. CONNECT WITH US @ wbg.org/Nepal @ WorldBankNepal @ WorldBankSAsia infonepal@worldbank.org SOCIAL PROTECTION CAN MITIGATE THE INCIDENCE AND IMPACT OF SHOCKS AMONG HOUSEHOLDS HOUSEHOLD WELL-BEING Shocks reduce the well-being of households. Covariate shocks, which affect numerous households simultaneously, may be natural (drought, floods, earthquakes, landslides, fires), economic (price increases, a decline in remittances), or political. Typically, these shocks: • Have a disproportionate impact on the poor and can push the vulnerable into poverty Before Shock After • Have long-term effects on human capital, especially among children, HOUSEHOLD WELL-BEING WITH ADAPTIVE SOCIAL PROTECTION through their effects on nutrition, education, and assets Social protection can help by • Building resilience through regular, well-targeted programs with adequate benefits, before shocks • Delivering timely, efficient assistance to protect well-being, after shocks The “adaptive” approach to social protection integrates it with disaster risk Before Shock After management and adaptation to climate change. KEY CHALLENGES IN NEPAL • Programs are not designed to be scalable in the aftermath of a shock. The following challenges need to be addressed to establish adaptive social Existing social protection programs protection in Nepal. have fixed benefits and beneficiaries, and mechanisms are lacking to scale • Information systems are weak. The absence of a national database of up programs in response to shocks by poor and vulnerable households, linked to current program beneficiaries, raising the benefits or the number of means that identifying eligible and shock-affected individuals or households beneficiaries. The government has not is difficult. The Department of Civil Registration has begun creating a established plans or contingent financing National Population Register in which each individual will be uniquely to scale up programs. The United Nations identified. The government also plans to issue national IDs to all citizens. Children’s Fund financed expansion of This will promote precise identification and coordination across programs. the Social Security Allowance program in response to the earthquake, was designed • Programs are not systematically focused on reducing poverty or and implemented after the earthquake. building resilience. Social protection programs have emerged over the years without an overarching strategic or legal framework. Large • Institutional coordination is limited. programs, such as the Social Security Allowances, identify beneficiaries Social protection programs, managed by using demographic or social criteria, that are not necessarily related to multiple agencies, are not coordinated poverty or vulnerability. Most programs rely only on cash transfers and do with disaster risk management systems, not explicitly promote investments in human capital. which are largely under the purview of Ministry of Home Affairs. Photo by: Thomas Walker WHAT CONSTITUTES AN ADAPTIVE SOCIAL PROTECTION SYSTEM? 1. Adaptive information: Information systems need to be dynamic THREE BUILDING BLOCKS to inform program delivery. A social registry should be available that UNDERPINNED BY INSTITUTIONAL includes information on the poor, the vulnerable, and current social COORDINATION protection program beneficiaries, including their location. 2. Adaptive programs: Programs that provide the poor with adequate and regular benefits to build household resilience should be available, along with programs that can be expanded quickly following shocks to reach affected households. 3. Adaptive financing: Contingent financing schemes should be accessible, that can be triggered rapidly and efficiently following a shock, as part of a national disaster risk financing strategy. 4. Institutional coordination: Programs, systems and institutions responsible for delivering social protection must be systemically coordinated with disaster risk management systems. GLOBAL EXPERIENCE Philippines: adaptive information and programs Mexico: adaptive financing Listahanan, the social registry in the Philippines, is used to identify and The government of Mexico has locate the poor and other potential beneficiaries of social assistance established the Fund for programs. It contains information on over 15 million households, 75% of Natural Disasters (FONDEN), all households in the country. It can be used to identify households that to allocate monies from the are unable to cope with the impacts of a disaster and to plan responses. federal budget ex-ante for disaster The government has relied on the registry to estimate the number of response and reconstruction, as well households that are likely to be affected by a disaster because of their as efforts at prevention. FONDEN location. is an instrument to coordinate the disaster response of various levels The Pantawid Pamilyang Pilipino Program (4Ps) is a conditional cash of government and across agencies transfer program supporting poor households with children that meet and to quickly provide funds without conditions on investment in education and health. Following Typhoon compromising existing budgetary plans Yolanda, the government and other partners delivered cash-based and approved public programs. By law, response programs, including through 4Ps, that were adapted in two FONDEN receives at least 0.4 percent ways. First, after the declaration of a state of calamity, beneficiaries in of the annual budget, which can be affected areas were temporarily no longer required to comply with the increased following a shock. The fund conditions. Second, the World Food Programme and the United Nations is nourished by a range of financial Children’s Fund relied on the 4Ps to deliver additional transfers to instruments, including insurance and affected households. reserve funds. The mandate of FONDEN is to Ethiopia: adaptive program and financing finance (a) emergency assistance The Productive Safety Net Program (PSNP) is a social safety net program to affected populations in the that provides cash or food to households that are chronically food- aftermath of a natural disaster; (b) insecure. It contributes to disaster risk management in two ways. First, the post disaster rehabilitation and it builds household and community resilience by targeting the most reconstruction of infrastructure, vulnerable and developing community assets through public works. The including restoration of the natural latter are projects centered on adapting to climate change and supporting environment; and (c) the rehabilitation resilience, including projects that focus on increasing water security, and reconstruction of low-income reducing soil erosion, and diversifying livelihoods. Second, the program is housing. Some social protection scalable. Its coverage can be expanded to protect vulnerable groups ahead programs, such as the Temporary of anticipated shocks and reach new beneficiaries during crises. Employment Program (PET) and the Housing Support Program have A risk financing mechanism that was established in 2011 has been post-disaster components in their used to pre-position program financial resources and initiate program program design to support early scaling-up following shocks. As a result, the program is adaptive, that recovery and reconstruction of is, PSNP can quickly scale up in response to drought, for example, by damaged infrastructure and housing. temporarily raising the number of households the program covers and In the aftermath of a disaster, these the amount and/or duration of benefits. programs can receive funding from FONDEN to scale up their programs. RECENT LEGISLATION OFFERS A UNIQUE OPPORTUNITY TO REALIZE ADAPTIVE SOCIAL PROTECTION • Disaster Risk Reduction and Management regulations can be used to institutionalize links between disaster risk management systems mainly under the Ministry of Home Affairs, and social protection programs and systems; and to address impact of disasters on livelihoods. • Social Security Act has provision for transfers to the economically poor and vulnerable which can contribute to building resilience prior to shocks. • Right to Employment Act has provisions for employment opportunities and cash transfers for the poor and unemployed which can contribute to building resilience. In addition, the Prime Minister’s Employment Program (PMEP) announced in the FY 2019 budget speech noted public works program to ensure minimum employment. These public works could be designed to be adaptive by focusing on climate resilient small infrastructure. Photo by: Jyoti Pandey/World Bank POLICY RECOMMENDATIONS While multiple pathways exist for adaptive social protection, four policy 3. Develop adaptive directions emerge as key for Nepal: financing mechanisms to ensure timely response 1. Establish an adaptive information system for the • Establish contingency identification of households vulnerable to shocks financing for disaster response at all • Develop a policy framework to establish an adaptive levels of government, as provided for information system based on a social registry. in the DRRM Act, and enable the use • Develop a national social registry of uniquely identified households of social protection systems including and their members, that contains socio-economic and spatial data, social registry and payment systems, building on existing data. The registry can help determine the eligibility to deliver relief to individuals and of individuals or households for multiple programs and identify those households affected by shocks. vulnerable to shocks. • Develop a long-term disaster risk • Ensure interoperability between the social registry and beneficiary financing strategy with a mix of databases of social protection programs through the use of a unique instruments, including contingency identification number. budgeting, contingent credit lines, such • Further develop early warning information systems to inform planning as the catastrophe-deferred drawdown for early response. option, and risk transfer products, such as insurance. 2. Build adaptive programs that promote household and community resilience, and that can be scaled up for 4. Establish robust rapid response and recovery institutional links between • (Re)focus existing and new programs, including the Prime disaster risk management Minister’s Employment Program, to ensure the coverage of the poorest and social protection and those individuals and households most exposed to shocks. • Ensure that DRRM regulations enable • Design public works programs to build assets for community resilience by the realization of the provisions in integrating the programs with action plans for climate change adaptation the DRRM Act to implement special and other disaster risk management activities. programs for vulnerable population, • Add provisions in guidelines of social protection programs, such as that and post-disaster assistance to address of SSA, to allow for temporary scaling up of programs, to complement impacts of disasters on livelihoods and humanitarian response. This requires defining rules for horizontal and not simply impact on housing. vertical expansion and establishing mechanisms to trigger scaling-up, for • Ensure that the National Disaster Risk example by linking to early warning system. Reduction and Management Authority has a separate cell or unit for social protection to facilitate the above.