BIG Pilot Project - Assessment Report - BIG Coalition Namibia

3.3 Cash transfers and economic development19ing power created by social pensions supports the developmentof local markets and revitalises local economicactivity. 38 However, the macro-economic impact for anygiven country will depend on the patterns of demandacross income groups and the manner in which socialtransfers are financed.8. Cash transfers help create an effective and securestate, promoting growth by building social cohesionand a sense of citizenship as well as reducing conflict. 39Social health protection, for example, is grounded invalues of equity and solidarity, strengthening bonds ofco-operation and reciprocity and thereby promoting socialstability. 40 A safe and predictable environment isessential to encourage individuals, including foreign investors,to work and invest.The social pension, for example, in Mauritius contributedto the social cohesion necessary to support thetransition from a vulnerable mono-crop economy withhigh poverty rates into a high growth country with thelowest poverty rates in Africa. 41 Likewise, Botswana’ssocial pension provides the government’s most effectivemechanism for tackling poverty and supporting the socialstability that encourages the high investment ratesrequired to drive Africa’s fastest growing economy overthe past three decades.9. Cash transfer promotes empowerment and growth byimproving the negotiating power of workers, smallholderfarmers and micro-entrepreneurs in the marketplace.Workers who have a better fallback position (providedby cash transfers) can search for a job that takes moreeffective advantage of their capabilities, rather than acceptingthe first job that becomes available. This raises38 Cichon and Knop 200339 Samson et al. (2002), Bourguignon and Ravallion (2004), DFID(2005)40 GTZ GPN (2007)41 Roy and Subramanian (2001)Cash transferpromotesempowermentandgrowth byimprovingthe negotiatingpowerof workers,smallholderfarmers andmicro-entrepreneursinthe marketplace.93