April 13, 2024


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Commentary: Pakistan has a bold, work-in-progress emergency cash transfer plan for the unbanked

LONDON: Cases of COVID-19, the disease associated with the new coronavirus are spreading quickly in Pakistan.

But considering that the nation shares borders with two global epicentres of the pandemic – Iran and China – the situation could have been worse. There have been more than 2,000 infections from the virus in Pakistan and 26 deaths linked to it, according to the most recent data.

Provincial leaders, particularly in the Sindh province, have been relatively efficient in imposing lockdowns.

But there has been a lack of clarity at federal level. Much of the uncertainty came from a comment made by the Prime Minister Imran Khan, in late March: “If we shut down the cities … we will save them from corona at one end, but they will die from hunger on the other side.”

A consensus on slowing down the number of cases has nevertheless emerged. While there is still no official national lockdown, provincial governments have imposed their own versions.

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In most parts of the country, public gatherings have been banned, schools closed, and all shops other than those selling groceries or medicines shut.


For Pakistan, the balancing act between averting a health crisis and keeping the economy afloat has been complicated by widespread poverty.

Around 39 per cent of Pakistani households live in poverty. Because of this, an economic shutdown could produce a humanitarian disaster when the incomes of poor daily wage workers vanish.

People stand on circles marked on the ground to maintain social distancing as they wait to collect a

People stand on circles marked on the ground to maintain social distancing as they wait to collect a free dry ration in Quetta, Pakistan. (Photo: AFP/Banaras KHAN)

In an emergency relief package announced in late March, the government allocated 150 billion rupees n (US$890 million) in cash support for the poorest 12.5 million households.

The government says this will benefit some 67 million people. Some of this will be funded by support from the World Bank and Asian Development Bank and will be transferred to recipients by the Pakistani government over the next few months.

While more details on the initiative are expected to emerge in the coming weeks, statements from officials indicated the government would use the infrastructure of existing social assistance programmes to disperse the cash.

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Given that these are reliant on digital data, administrators must be transparent about the criteria for eligibility. They must provide also ways for people to challenge decisions for those who find themselves excluded.


Digital rights in Pakistan are contentious. In early March 2020, the government was forced to rethink social media rules after a backlash from citizens, local tech companies, and Silicon Valley firms.

In recent days, activists have raised concerns about a hastily implemented cell phone tracking system which uses geospatial data to identify where COVID-19 patients have been during the past 14 days and sends a text message to others who have been in close proximity directing them to self-isolate.

But there is no transparency about who is being tracked, or about how this data is to be stored. Similar tools have been used successfully in South Korea and China.

Outbreak of the coronavirus disease (COVID-19), in Islamabad

An army soldier inquires a family in vehicle at the check-post during a lockdown after Pakistan shut all markets, public places and discouraged large gatherings amid an outbreak of coronavirus disease (COVID-19), in Islamabad, Pakistan on Mar 25, 2020. (Photo: REUTERS/Waseem Khan)


Pakistan’s emergency cash transfer programme has been likened to a basic income scheme – even though the 12,000 rupee lump sum amount is a fraction of the 17,500 rupee minimum legal monthly wage for 2019.

The selection criteria for the new emergency measures are based on those for an ambitious programme called Ehsaas, which was launched in March 2019 as a set of initiatives to create social safety nets and reduce inequality.

Ehsaas schemes rely heavily on digital data. One of the most prominent projects, known as Kafalaat uses data analytics to decide who can receive cash transfers from the government.

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It appears as if this criteria will be replicated to determine who can receive the special coronavirus cash support. This would mean that taxpayers, car or motorcycle owners, and people who have travelled abroad multiple times are ineligible for the new coronavirus emergency assistance.

The databases that guide the Ehsaas scheme are managed by two Pakistani institutions, the Poverty Alleviation and Social Safety Division, and the National Database and Registration Authority.

Last year, this data collaboration arrangement created an embarrassment for the country’s bureaucracy after it was revealed that thousands of government employees had been receiving cash transfers for several years from a flagship government cash transfer scheme called the Benazir Income Support Programme (BISP), intended for the most vulnerable members of society.

The discrepancies were exposed when the Ehsaas programme sought to absorb and streamline the BISP.

Most of the transgressions occurred when government employees used their wives’ credentials to register – which was effective because women are less likely to have taxable income, own cars or motorcycles, or travel abroad.


Since only around one-fifth of adults in the country have bank accounts, government transfers must be available in cash.

Outbreak of the coronavirus disease (COVID-19), in Peshawar

A deserted view of a mosque during a lockdown after Pakistan shut all markets, public places and discouraged large gatherings amid an outbreak of coronavirus disease (COVID-19), in Peshawar, Pakistan March 27, 2020. REUTERS/Khuram Parvez

The new emergency initiative requires those who self-identify as vulnerable to send a text message to the Ehsaas scheme with their national identification number.

If they meet the criteria, those deemed eligible will receive a text message asking them to visit a designated bank branch to receive cash.

But this might be complicated if lockdowns prevail, bank branches are closed, and the movement of people is restricted.

Pakistan’s approach to targeted poverty relief through technology is commendable, even if it can do better not to exclude people in need. Many on daily wages own a motorbike or delivery van, and others might have travelled overseas for work.

Going forward, the criteria for eligibility must be more nuanced, especially if the income support measures are to have broader positive economic effects.

While the emergency support measures for coronavirus have been criticised for not disbursing enough cash, there has been limited emphasis on enhancing the reach of the safety net.

If this is done successfully, the country will be better positioned to mobilise resources domestically and internationally, from Pakistanis overseas, global institutions, and philanthropic foundations.

Juvaria Jafri is Lecturer in International Political Economy at the University of London. This commentary first appeared in The Conversation.

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