This guest post comes from Chris Desmond and Linda Richter, contributors to the Joint Learning Initiative on Children and HIV/AIDS (JLICA). Among other conclusions, JLICA's final report advocates that, in countries heavily affected by HIV, the most appropriate economic strengthening action to be taken in support of children is the establishment of a social protection plan to transfer resources to the poorest families. Given the range of activities pursued in the name of improving the economic security of children affected by HIV, CYES asked Chris and Linda to discuss their findings in more detail. To learn more about JLICA and to access the report in multiple languages, visit their website at www.jlica.org.

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Although there is a great deal of controversy about the relationship between poverty and the risk of becoming infected with HIV, it is not debatable that HIV and AIDS place a financial strain on affected individuals and families. Over time, and often repeated shocks, AIDS is impoverishing. Many of the impacts which occur as a result of the epidemic, particularly those which affect children, result from this financial strain. For families already facing serious economic constraints, the added burden of HIV/AIDS can push them into destitution. Budgets are further constrained, food consumption may fall, children may be withdrawn from school, and less is available to spend on the health care of children and adults who are not ill.

Economic strengthening for individuals and families is an obvious response to financial strain, and there are a range of programmes which seek to do just this. These include, in an approximate order of rising complexity in delivery: cash transfers, in-kind transfers (such as food), livelihood development, micro- credit and public works programmes, among others. Identifying the most appropriate program to protect children in the context of HIV/AIDS and poverty was a major focus of the Joint Learning Initiative on Children and AIDS (JLICA). The JLICA concluded that cash transfers for the poorest families is the optimum policy choice given need, flexibility and capacity constraints. There are two parts to the JLICA recommendation: firstly, the provision of cash transfers as opposed to other forms of economic strengthening and, secondly, the targeting of the poorest families as opposed to orphans or people living with HIV/AIDS.

There are a number of arguments in favour of cash transfers. Cash transfers are a proven means of improving the health and well-being of vulnerable families. They also require, relative to livelihoods or public works, less capacity to implement. Unlike in-kind transfers, cash provides some flexibility and avoids goods being sold by families so they can purchase what they feel they really need. Cash transfers respond to constraints in demand for services. While there is frequently a focus on the delivery of health and education services, the capacity of families to access these services has not been addressed. Perhaps most importantly, cash transfers recognise that the leading role in child care and protection is played by the family. Outside responses should support families rather than try to by-pass them.

A common objection to cash transfers is that they foster dependency. But the amounts of money involved are small and can only been seen as supportive of other forms of family income and livelihood. Even if there is dependency, it may well be legitimate. Cash transfers are typically intended to benefit children, the elderly or families affected by illness or disability with no one able to work – all of whom are legitimately dependent on their families and the state. It is curious that descriptions of old or very young caregivers of children affected by HIV/AIDS and poverty are accompanied by arguments in favour of livelihood or public works programmes, the very forms of economic strengthening of least benefit to these groups of caregivers.

The JLICA, as mentioned, recommends targeting the poorest families in HIV/AIDS affected communities. This is premised on the contention that, at the point of delivery, the only appropriate indicator of need is need itself. Families affected by HIV/AIDS may be more at risk of being pushed deeper into poverty, but this does not mean that they are all more at risk than all other families. The same applies to orphans. Needs arise because of poverty; therefore the targeting should be based on poverty. It so happens that targeting the poorest families has been shown to cover the majority of families affected by HIV/AIDS being covered.

The above summarises some of the main arguments behind the JLICA recommendations relating to cash transfers. There are, however, other important arguments in favour of cash transfers not directly related to HIV/AIDS. Key among these are the protection and promotion of human capital and their potential impact on economic growth. Far from fostering dependency, cash transfers have been shown to increase household productivity and labour force participation. Moreover, the injection of money directly into poor communities has the potential to increase economic activity which leads to benefits for others in the community, not only targeted families.