Suriname will improve social protection system with IDB support

$15 million loan will support the creation of new Conditional Cash Transfer Program to benefit children and pregnant and lactating women from 15,000 low-income households

The Inter-American Development Bank (IDB) has approved a $15 million loan for the Social Protection Support Program in Suriname. The project will support the efforts of the government of Suriname to enhance the effectiveness of spending on social protection programs. A key goal is to improve the efficiency of the targeting of low-income households so as to break the intergenerational transmission of poverty through the development of the human capital of children.

The current social protection system in Suriname consists of both targeted and untargeted transfer programs, including a cash transfer program for poor households, child allowances, disability grants, school supply grants, and health care services to the poor.

Those programs, as currently designed, are not effectively achieving the government’s objective of protecting the poor as they are either poorly targeted or too small in the coverage or in the size of the cash transfer. In addition, they are not sufficiently focused on promoting human capital development of the next generation as they are skewed toward the elderly.

The main component of the project will finance grants to be provided to poor pregnant and lactating women and the mothers of poor children, in a form of Conditional Cash Transfer (CCT) for up to 15,000 households by 2015. Human capital development will be promoted through health programs aimed at improving timely utilization of maternal and child health care services and education programs designed to reduce school repetition rates and increase secondary school enrollment and graduation. All cash-transfer recipients are expected to get regular health check-ups, participate in nutrition education and take nutrition supplements, and attend school regularly in order to receive monthly payments that will vary according to the age of the beneficiary and the region of residence.

The program is expected to substantially increase enrollment rates, especially in secondary schools. Expected health outcomes include improved maternal health due to regular prenatal checkups and an increase in the number of children who are immunized against preventable diseases.

In order to maximize the effectiveness of the CCT Program, the project also aims to improve and expand the supply of education and health services in order to meet additional demand generated through the cash transfer program. Beneficiaries will receive fee waivers from public schools, free school meals, and free health care services at public facilities through government subsidies.

The project will also strengthen the institutional capacity of the Ministry of Social Affairs and Public Housing to more effectively and efficiently plan, implement, monitor, and evaluate targeted non-contributory social protection programs, such as CCT.

“The program targets children in poor families, and aims to induce a behavioral change by involving the parents through two key co-responsibilities: children’s regular health check-ups and school attendance. This will reduce poverty and vulnerability of the next generation” said Donna Harris, IDB social protection specialist and the project team leader.

The IDB loan of $15 million is for a term of 20 years, with an interest rate based on Libor. It has a grace period of 5 years, and a disbursement period of 5 years.