By Peter Bate, Tlicalco, Veracruz, Mexico
On a crisp, sunny October day, Ignacia Pérez stands with hundreds of other indigenous women outside a government food store in Tlicalco, a hamlet high up in the Sierra de Zongolica, in the state of Veracruz. Grouped by communities and lined up in alphabetical order, women shuffle toward a table as two bank clerks call out their names. A couple of policemen guard the store, leaning against a whitewashed wall. Three women selected as monitors keep a close eye on the proceedings, making sure everyone is in the right place at the right time.
When her turn comes, Pérez hands over her ID card and a sheet of government-issued stickers printed with holograms to prevent forgery. One of the clerks peels off a sticker and places it on a receipt attached to a plastic envelope containing a few hundred pesos. Pérez takes a pen, signs the receipt and picks up the cash, which will help her family of five get by during lean times.
This happens to be such a time. Heavy rains have flattened the local corn crop and made it impossible for trucks to reach Pérez’s community. Without transportation, her husband cannot sell the charcoal he makes from pinewood, so he is essentially out of work. For the next few weeks, his wife’s government stipend will be the family’s sole source of income and will keep its three young children from going hungry.
Pérez and her family are among the 25 million Mexicans who benefit from Oportunidades, a conditioned cash transfer program that is changing the lives of Mexico’s poorest people. Launched in 1997, the program provides aid to indigent families to improve their nutrition and keep their children healthy and in school. Its quick and encouraging results led the IDB to grant the program a US$1 billion loan—so far the largest investment loan in the Bank’s history.
Model program. Oportunidades has also garnered ample international recognition. In May 2004 the Mexican program was one of two Latin American initiatives showcased at a World Bank conference in Shanghai on proven means of breaking the cycle of poverty in developing countries. The other one was Rio de Janeiro’s Favela–Bairro, an IDB-supported program that has turned slums into livable neighborhoods.
The Mexican program has grown from 300,000 families in 1997 to 5 million in 2004, covering virtually the entire population threatened by hunger. The closely monitored and meticulously evaluated initiative has quickly shown impressive improvements in beneficiary families’ food consumption, infant weight and height growth, use of preventive medical services, prenatal care and contraception, school enrollment and retention and a reduction of the incidence of child labor.
More surprisingly, the rapid expansion of Oportunidades helped Mexico reduce poverty levels even during the economic doldrums of 2000–2002. According to the UN Economic Commission on Latin America and the Caribbean’s indicators, in that period extreme poverty dropped from 15.2 percent to 12.6 percent of the population—a result that contradicted conventional assumptions about the social consequences of economic downturns in developing countries.
Beyond statistics, Oportunidades is influencing Mexican society in ways that are hard to gauge at present, although some of those impacts can be sensed in a conversation with women involved in the program. In a country marked by machismo, Oportunidades has empowered millions of women by trusting them to manage money for their families. Through the program, mothers who never went to school or dropped out after one or two grades are signing up for adult education. Around 1 million families receive their bimonthly stipends in bank accounts created by Oportunidades. Some of these families have even started to build up savings, as mothers and fathers salt away a few pesos they would have otherwise spent or stuffed under a mattress.
An Oportunidades beneficiary and her child in Tlicalco, Veracruz.
Women first. What is the program’s formula for success? Its national coordinator, Rogelio Gómez Hermosillo Marín, points to women’s involvement in Oportunidades. “The key to all of this is women’s strength. When women take ownership of the program, everything starts to happen,” he says.
Women’s participation is certainly a hallmark of the program. But running in the background is a well-designed, rigorously evaluated and constantly fine-tuned system that has been improving since it was launched seven years ago under the name PROGRESA, a Spanish acronym for program for education, health and nutrition. In a region where social programs rarely survive from one administration to the next, one of Oportunidades signal achievements is its continuity. PROGRESA started under former president Ernesto Zedillo, whose Institutional Revolution Party (PRI) governed Mexico for seven decades until 2000. Zedillo’s successor was Vicente Fox, a leader of the National Action Party (PAN).
Instead of gutting the program, the Fox administration decided to expand it under a new name. PROGRESA had targeted rural areas, where extreme poverty was concentrated. As Oportunidades , it set out to reach indigent people in urban areas as well, and extended its education subsidies to cover high school. As a further incentive for students to graduate, the program now contributes to individual savings accounts that help its young beneficiaries accumulate some money to pay for higher education, start a small business or buy a home.
The program has several features that distinguish it from previous poverty reduction initiatives. Aid is delivered in cash rather than in kind, and is given directly to the female head of household. Payments continue to flow as long as beneficiaries comply with a series of requirements known as “co-responsibilities”—namely keeping their children in school, taking them to see a doctor regularly and getting their shots, and attending periodic discussions on topics such as health, nutrition, hygiene, domestic violence and family planning. Pregnant women and lactating mothers and their infants are also provided an iron-fortified formula that helps prevent infant malnutrition.
Oportunidades stipends are intended to supplement rather than supplant earned income. A family with young children will receive the equivalent of about US$15 a month. There are larger incentives to keep children in school, including aid for supplies and uniforms, and amounts increase as students pass to upper grades. Payments for girls are higher than allotments for boys—a form of affirmative discrimination designed to close the gender gap in education among the poor. The stipends have ceilings (no family can receive more than US$150 a month) so there is no reward for having more and more children.
Families can remain in the program for three years, as long as they fulfill their co-responsibilities. Those who fail may be suspended or even dropped from the roster. After three years, families can re-enroll, provided they still meet the program’s criteria.
No politics allowed. One of the problems welfare programs face is that they are often viewed as vote-buying schemes. This was an issue that PROGRESA’s designers confronted head on. Rather than relying on party chieftains to dole out benefits—a practice that has led to corruption in many welfare programs—Mexican officials established a system of direct transfers designed to eliminate partisan influences and biases. While Congress sets the program’s budget and approves how many people may be enrolled each year, Oportunidades operates with transparent rules and objective criteria.
The program started by using census and household survey data to identify the rural areas with the highest levels of indigence and worst living conditions. Once priority communities were pinpointed, house-by-house polls ascertained which families should receive aid through use of a points system based on criteria such as income and education levels, occupation, housing conditions, land and cattle ownership and access to clean water and electricity. As a final filter, the lists of potential beneficiaries were presented in community meetings so neighbors could validate the candidates. The same steps were followed as the program expanded, except that mobile polling units are used in urban areas.
Several firewalls guard against political manipulation and corruption. Oportunidades staff does not handle money. The tasks of stuffing, sorting and delivering cash envelopes to beneficiaries is outsourced to commercial banks, a state-owned regulating agency and the telegraph company. Prior to elections there are “blackout periods” during which no payments may be made and no families may be added to the roster.
The program also takes steps to ensure that its beneficiaries understand that the health, education and nutrition services they receive are their birthright as Mexican citizens, and not a product of government largess. For the 2003 mid-term legislative polls and the state and municipal elections held during 2004, Oportunidades carried out an intensive “transparency awareness” campaign to this end. The central message to its beneficiaries, delivered in Spanish and indigenous languages in assemblies, flyers, posters and radio spots: no politician can include or exclude you from the program, no matter how you vote.
In Coscomatepec, a small town in the foothills of the Veracruz mountains, local resident Juana Martínez says that some local politicians used to try to take credit for the program. “But we know it’s not true. Now, if anyone says so, they immediately lose support,” she said. Her town had recently held elections, in which the Revolutionary Democratic Party (PRD) unseated the PRI.
Despite all these preventive steps and periodic audits by outside agencies, Oportunidades still is a target for political jabs. Gómez Hermosillo attributes much of the criticism to a lack of knowledge of the program’s workings. “This is probably the only program that does not include people arbitrarily,” he argues. Moreover, Oportunidades depends on cooperation with state and local governments, which are responsible for delivering social services such as education. “The governors and mayors who know how we work appreciate us. And a majority of states and municipalities are ruled by opposition parties.”
Low overhead. Another distinguishing feature of the program is its low operating costs. With a core staff of around 630 people, Oportunidades spends only about 6 cents out of every peso on administrative expenses. Up to 12,000 people are employed as temporary workers to conduct house-by-house surveys and to input data during enrollment periods. Part of the clerical work is done by university students who must meet a required number of hours of social work before they graduate.
But perhaps the program’s most salient characteristic is that evaluations have played a key role from the start. Its deliberately gradual growth allowed its administrators to gauge what worked and what needed fine-tuning. For instance, the program originally had a series of regional points systems that tended to overrepresent poor people in relatively better-off areas and underrepresent poor people in more marginal areas. They also found that households with no children were being excluded. To solve these disparities, a national questionnaire was devised using fresh data from household surveys and information from the program’s beneficiaries.
The evaluations are not simply useful feedback. The data also supports its administrators when they appear before Mexico’s Congress to report on Oportunidades’ impact. As a consequence, the program’s operating budget has risen from 600 million pesos in 1997 to 30,000 million in 2004, making Oportunidades the largest social program in Mexico’s history.
Oportunidades has also been scrutinized by international institutions. Before approving its loan in 2001, the IDB helped the program to organize a thorough evaluation by the International Food Policy Research Institute. In its report, the IFPRI noted that in just three years Mexican children from poor families in rural communities covered by the program were attending school for longer periods, eating more balanced diets, receiving medical care more frequently “and learning that the future can be very different from the past.”
Measuring progress. This emphasis on evaluation has gradually spread to other Mexican social programs, including some that had not been examined in decades. As a result, some programs have been shut down and others have been streamlined. Nowadays all of the Ministry of Social Development (SEDESOL) programs are subject to evaluation.
Oportunidades also moved the IDB to encourage other Latin American countries to study the Mexican model and adapt it to their particular needs. Carola Álvarez, who led the IDB project team for the US$1 billion loan, lists Argentina, Brazil, Colombia, Ecuador, Honduras and Nicaragua among the countries that have drawn from Mexico’s experience in their implementation of social programs in education, health and nutrition. “Oportunidades faces the challenge of managing program delivery for 5 million families all over the country. In that sense, its monitoring and supervision systems have become some of the best in the region. For the IDB, working with the program has been an incredible partnership for innovation and dissemination of what works,” said Álvarez.
Notwithstanding their program’s track record, Mexican authorities are quick to point out that Oportunidades is one initiative in an overarching strategy that includes other social programs such as Hábitat, a neighborhood upgrading program that addresses the lack of adequate infrastructure and services in slums. And while results have been heartening so far, they are concerned about the quality of education and health services, and about the expectations of a better future growing in millions of people.
SEDESOL Undersecretary Miguel Székely, a former IDB researcher, notes that Oportunidades was designed as a static program to deal with structural poverty. In order to have a social safety net similar to those of industrialized nations Mexico will have to link its welfare programs to its fiscal system. But before it can achieve that goal, it needs to reform its tax structure to raise revenues and reduce the size of its informal economy, in which most poor people toil. “That is the great pending task,” Székely says.
In the meantime, some of the women in Oportunidades are confident that their children will not be condemned to live in poverty. María Ignacia Varela, a mother of seven children in Coscomatepec, renders this verdict: “The program works. My daughter will be nobody’s servant.”