Social protection in Iraq: towards social inclusion and investing in human capital
Within the framework of the upcoming Country Partnership Strategy for Iraq, we reflect on the Social Protection challenges in Iraq, starting with a look at Iraq’s social safety nets, to be followed by subsequent blogs on labor/employment and social insurance.
The key human development challenge for Iraq is to continue to strengthen the effectiveness and efficiency of its human development sectors. This will involve introducing policies that enable the human development sectors to work together strategically with the common, long-term aim of developing Iraq’s human capital. Social protection will play a critical role in this process.
In recent years, the Government has been engaged in reforming the social protection programs, to rationalize subsidies and transition from universal food subsidies to a better targeted cash transfer program.The cash-based Social Safety Net program administered by the Ministry of Labor and Social Affairs has expanded to reach nearly one million families (based on categorical targeting), with a budget of about US$800 million. Overall, Iraq spends close to 10 percent of its gross domestic product on social safety net programs, of which 7.7 percent is spent on food and fuel subsidies.
Current cash transfers are not very effective in reaching the 22 percent of the population that lives below the poverty line (2007), many of whom are concentrated in rural areas. Only 6 percent of the bottom economic quintile in Iraq is covered by cash transfers. The use of broad social categories rather than more effective targeting mechanisms (such as proxy-means testing or geographical targeting) to determine eligibility has resulted in the majority of the poor falling through the cracks of the non-subsidy safety net. There is an urgent need to improve the efficiency of the targeting of the cash transfer system.
The Iraq Forum for Social Protection held November 17-19, 2012, identified a number of areas by which Iraq can improve its social safety net system. The Forum was organized as a follow-up to a series of South-South learning visits that the project had facilitated to Georgia, Indonesia, Lebanon and Turkey. The goal was to translate learning into concrete policy directions and development solutions that best fit the Iraq context .Of the many recommendations that emerged from the Forum, one of the most significant was the establishment of a Higher Council for Social Protection, to be chaired by the Prime Minister. Social safety net specific recommendations for action emerging from the Forum included revamping the current targeting system and increasing financial allocations to expand coverage, developing a database of the poor using appropriate targeting methodologies, introducing a pilot program for conditional cash transfers (i.e., to improve girls enrollment rates in rural areas), and significantly expanding the ministry’s resources as it relates to social workers and household visits.
With Iraq at a crossroads in its socio-economic development, partners, including the World Bank, should help put the country on the path toward investing in people. Emphasis should be placed on inclusion, while avoiding any policies that further social marginalization. An important step in this direction would be the targeting of resources to those who need them most, and reforming policies that benefit the rich as much as the poor, such as the current food subsidy program. Institution and capacity building along with evidence based decision making will play a critical role achieving these goals.