Cash has rapidly become an effective part of the humanitarian toolbox. Debates about its use now focus less on the pros and cons, and more on the complexities and challenges of implementation. In part, this stems from a recognition that fears about corrupt or unintended use have not been borne out in practice, and that the relative risks of cash versus in-kind alternatives need to be assessed on a case-by-case basis, to determine when, where and how cash programmes might be appropriate. Cash transfers are simpler to implement in situations where robust markets and cash delivery systems are already in place (i.e. banks, remittance services), infrastructure is intact and a degree of security can be guaranteed.

Cash For Work projects in northern Afghanistan

The Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) has been implementing emergency and transition assistance (DETA) programmes in Kunduz, Takhar and Badakhshan provinces in northern Afghanistan since 2002. Cash For Work (CFW) activities started in 2004, and gained momentum in 2006. The DETA programme was extended to two provinces in south-eastern Afghanistan (Khost and Phaktia) in 2007, and to six other provinces in the north (Baghlan, Balkh, Samangan, Sar-e-Pul, Jowzjan and Faryab), where CFW projects have also started, albeit on a smaller scale. There are plans to extend CFW coverage in the north as part of a new programme, ‘Basic Infrastructure and Income Generation’, reflecting Germany’s commitment to support CFW activities on a large scale.

DETA programmes are financed by the German Ministry for Economic Cooperation and Development (BMZ). As short- to medium-term responses, the overall goal is to ensure that public services are delivered during and immediately following emergencies, while simultaneously promoting self-help capacity at all levels of society and the state. Since 2006, DETA programmes have adopted a people-centred approach, which aims to increase the sustainability of poor people’s livelihoods in north-eastern Afghanistan.

Initially, investments were concentrated on two selected districts in Takhar and Badakhshan provinces, in what are known as ‘backbone projects’. These comprise large, mostly infrastructural, projects, such as road or bridge construction, with significant CFW components. Within the districts selected, the majority of interventions target specific communities based on food insecurity or livelihood criteria. Cash rather than in-kind aid is the main delivery instrument. Cash was preferred over Food for Work for various reasons, including the chronic character of the crisis (this is not an acute emergency), and the fact that cash is logistically easier and cheaper than food deliveries in mountainous northern Afghanistan. The preference for cash also reflects German government policy regarding the shift towards cash-based approaches.

Projects are implemented by target groups and Afghan partners. Technical know-how and supervision, as well as monitoring, are supported by GTZ-employed Afghan staff, mainly construction and agricultural engineers and community workers, assisted by a few international staff. The entire approach, from project conception to final implementation, is bottom-up and oriented towards Afghan ownership. Apart from road-building, which is the main activity, projects cover a wide range of construction and rehabilitation work, such as bridges, culverts, school buildings, flood protection, wells and drinking water supplies.

GTZ’s CFW activities have guaranteed roughly 15,000 workers access to cash over the last three years, benefiting more than 100,000 Afghanis annually. In Badakhshan province alone, 150,000 work days were provided every year. On average, CFW beneficiaries have participated in CFW schemes for 15 days, and roughly 10,000 skilled and unskilled workers have participated annually, benefiting over 80,000 poor people in Badakhshan alone (the average family is estimated to comprise eight people in Badakhshan province and five in Takhar).

Evaluation and analysis

The main objectives of the CFW schemes were:

• To improve food security in vulnerable districts.
• To increase economic opportunities and social services for the rural population.
• To improve access and travel facilities.
• To provide work and income opportunities during the lean season, when other income opportunities are not available.
• To build capacity within Community Development Councils (CDCs).

Almost all of these objectives have been attained, albeit to different degrees according to local conditions. Projects had substantial positive impacts on economic conditions, local markets and social amenities. In most cases, projects yielded very positive short- and medium-term results and laid the foundation for longer-term structural impacts. In particular, road construction projects contributed to solving transport problems, especially in winter and spring. For the first time buses, cars and trucks were able to reach some remote areas. Shops opened up along the roads, and villages were able to take sick people to hospitals for medical treatment. Roads connecting rural areas with main town centres and bazaars acted as a starting-point for further investment in infrastructure in district centres.

Overall, GTZ’s CFW schemes contributed to reconstruction in what is a very challenging environment, where there are large numbers of unskilled and semi-skilled workers but investors are reluctant to risk capital and create employment possibilities. CFW was seen as a valid rapid response tool, and potentially an effective mechanism for triggering longer-term changes in traditional Afghan communities. Aside from the positive direct impacts on households of the cash received, the infrastructure projects carried out – roads, bridges, wells, drinking water, school buildings and flood protection – proved to be beneficial for local livelihoods. However, whether cash transfers are appropriate as a replacement for or complement to in-kind support can only be decided on a case-by-case basis, within specific contexts.

GTZ’s experience with CFW projects in northern Afghanistan shows that cash transfers can be successful on a large scale. Improvements to the road system in particular dramatically increased the volume of goods transported to and from local markets, accompanied by a sharp drop in transport costs. Thus, the project promoted local markets and facilitated trade in affected areas. Mortality rates in pregnancy and childbirth, as well as from serious illness, were reduced as patients could be transported from remote villages to health centres in time for treatment. These improvements triggered some motivational and social changes, as the CFW initiative has persuaded labourers and villagers to maintain the small feeder roads built to connect their villages to the larger ‘backbone’ project roads, thereby possibly encouraging a sense of ownership and responsibility for road upkeep. Finally, with 100,000 people benefiting annually, the GTZ project has demonstrated that cash can be successful at scale, and for a long period.

Concerns that cash may be misused for anti-social purposes have proved unfounded, as the money was largely spent to meet basic needs. Evidence from programme monitoring shows that cash has been spent on what beneficiaries most needed, namely food. Another common criticism of CFW programmes, that cash could be more vulnerable to looting or misuse than food aid, and therefore that cash transfers should only be considered in secure situations, has also not been substantiated. Rather, the results in Afghanistan suggest that cash-based programming can be successful in insecure environments. Cash may also have positive side-effects for conflict prevention or mitigation; labourers that were previously combatants worked side by side with local farmers and community members for the first time, acting jointly to improve livelihoods in peace.

Nor was there any evidence that the cash transfers disadvantaged women. Men and women in northern Afghanistan frequently make joint decisions on how to spend money most appropriately, and women often have access to their husbands’ cash deposit and participate in economic activities that fall within their responsibilities. Men were the recipients of cash in most of the activities and women’s participation was limited. In a very traditional and patriarchal culture there are clearly huge barriers to encouraging the greater participation of women in CFW projects, and GTZ has at least managed to get some women to participate. In order to promote greater involvement, project proposals from women’s associations and NGOs were favourably weighted and supported for approval. The numbers of women affected, however, have remained relatively small, and more attention could perhaps be given to ways to broaden participation, both in terms of numbers involved and the range of activities.  Another criticism of cash programmes has been that they do not necessarily target the most vulnerable. Given that workers were selected in cooperation with village councils (the shuras), elected CDCs and project staff, the poorest and most food-insecure people represented the bulk of the unskilled labour force employed by GTZ. In addition, keeping the daily wage below the local level for unskilled labour may have provided an ‘in-built’ self-targeting mechanism.

One unresolved problem has been that many workers were only permitted to join the unskilled labour force for a few weeks due to high demand for the limited work available. This restricted the income that each household received and meant that the wages made a relatively small contribution to household food security. It was also felt that the cash disbursed was not sufficient to have major price impacts on food markets or labour migration. However, it is possible that CFW wages had a minor short-term impact on local markets and on the prices of essential goods during paydays. Another important lesson is the need for mechanisms allowing for cash remunerations to be adapted regularly to seasonal variations in the labour market and food prices. Better coordination is also needed, with greater information-sharing between agencies on general policies as well as practical operational aspects, such as daily rates and work standards.The large number of agencies engaged in CFW programmes in Afghanistan makes coordination and the exchange of experience particularly important. The existence of an effective monitoring system to provide data and information would be useful in supporting joint decision-making processes.

Paul Harvey (paul.harvey@humanitarianoutcomes.org) is a partner in Humanitarian Outcomes. Nicolas Lamade (Nicolas.Lamade@gtz.de) works with Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ). Dr. Hannelore Börgel (Boergel.Hannelore@t-online.de) is an independent consultant based in Berlin.