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The bonus increase seeks the reduction of extreme poverty
Posted On 27 Dec 2017
Ecuadornews:
Presidential Decree 253 was inspired by the Conditional Transfer Program. According to analysts, the increase can be financed through the targeting of subsidies and resources. For 2018 the Government contemplated in the General State Budget the increase of the Human Development Bond from $ 294.14 million to $ 383.05 million, and thus fulfills the campaign offer of President Lenin Moreno to increase this benefit.
In that line, last Friday, the Head of State issued Decree 253 that establishes the elevation of the Human Development Bond from $ 50 to $ 150, depending on the number of children and their ages. It also fixes at $ 100 the monthly value of the monetary transfer for the pension of older adults over 65 and in extreme poverty. Víctor Hugo Albán, vice president of the Pichincha Association of Economists, considers that this initiative is not only timely but also necessary and based on technical criteria.
The expert argues that it is necessary to make a serious socioeconomic analysis to determine the real beneficiaries of this social assistance mechanism. “You have to do the study so that there is no abuse that was in the previous government. To not deliver to who is and is not, “said Albán.
The economic consultant Sebastian Lucero believes that the initiative to deliver the voucher in a variable way, considering the number of family charges, allows to optimize the resources of the treasury and thus reduce extreme poverty. “The delivery of a fixed benefit does not help us reduce poverty. It is more optimal to consider a variable benefit and in this way make more efficient the resources that the State grants to reduce extreme poverty, “Lucero explained.
This model is based on the Conditional Transfer Program that is already implemented in some countries of the region. CCTs currently operate in 18 countries in the region and benefit more than 25 million families (around 113 million people). ), that is, 19% of the population of Latin America and the Caribbean, at a cost of around 0.4% of the regional Gross Domestic Product (GDP). The basic structure of the CCTs consists of the delivery of monetary and non-monetary resources to families living in poverty or extreme poverty who have minor children.
No major impact on the budget
The vice president of the College of Economists believes that the increase in 30.23% of the Human Development Bond will not have a greater impact on the State budget and suggested that its financing be made with a part of the tax on the income (IR) or the Value Added Tax (VAT). He believes that there are budget items that were not filled in 2017 and that those surpluses would also be used to finance the program. Lucero estimates that resources can be focused on subsidizing gasoline. “By reviewing this subsidy, which is inefficient, you can get $ 80 million to finance the program in 2018.” The Ministry of Economic and Social Inclusion (MIES) will provide details on the application of the Decree, through a press conference scheduled for today.
Experiences
Program with impact
The initiative of the regime for this increase obeys the criteria established in the Conditional Transfer Program whose model is implemented in 18 countries of the region, benefiting millions of families
$ 50 was the value of the bonus, which will increase to $ 150 depending on the number of family loads.
Successful model The “Bolsa Família” program implemented in Brazil inspired the proposed variability decreed by the President. (I)
