THE ARAB MONETARY FUND RELEASES A STUDY ON "THE DIGITIZATION OF SOCIAL TRANSFER PAYMENTS IN THE ARAB COUNTRIES"

by **claud39** Mon Apr 26, 2021 4:57 pm

THE ARAB MONETARY FUND RELEASES A STUDY ON "THE DIGITIZATION OF SOCIAL TRANSFER PAYMENTS IN THE ARAB COUNTRIES"
2021-04-25

Electronic systems for social transfers helped Arab countries achieve a number of gains, including accurate targeting of those eligible for cash support, reducing administrative costs, facilitating the entitlement of transfers, and electronic connectivity with all government departments

The importance of Arab countries focusing on adopting future plans to lead citizen-based digital transformation aimed at developing electronic systems for social transfers

Within the framework of the Arab Monetary Fund’s endeavor to prepare research contributions consistent with the priorities of its member states and support policy makers, the Fund issued a study entitled “Digitizing Social Transfer Payments in Arab Countries”. The study, which is based on a questionnaire completed by the concerned authorities, was concerned with monitoring the experiences of Arab countries with regard to the digitization of social transfer systems with the aim of identifying the current status of these systems, the economic gains resulting from them, the challenges facing the concerned authorities, and the lessons learned, with the aim of exchanging experiences and experiences between countries Arabic .

The study indicated that the digitization of public finances is associated with many economic benefits and gains, especially for developing countries. It is estimated that the shift to electronic collections and payments on both sides of the public budget (revenues and public expenditures) will achieve economic savings ranging between 220 to 320 billion dollars annually, equivalent to 0.8 to 1.1 percent of the annual GDP of developing countries .

International experience also shows that the digital transformation of social transfer systems has helped many developing countries to increase the levels of coverage of social protection programs, and has made it possible to significantly reduce the administrative costs of these programs. In Brazil, by integrating four social transfer programs into one digital social transfers program, the government has expanded the coverage of the beneficiaries of the program to reach about 80 percent of poor families, compared to 65 percent of these families previously. Digital transformation has also helped reduce administrative costs by an estimated three-quarters of the levels recorded before the digital transformation .

The national biometric identity project implemented in India, known as “Adhar”, which represents the largest national identity project in the world, contributed to a total of 1.2 billion citizens registered in the system, in increasing the efficiency of social transfer and pension payment systems. Where the system enables the delivery of payments for support programs, especially support for food commodities and household fuel, to the bank accounts of the beneficiaries directly, linked to the biometric identity system anywhere in India, including places where there are no bank branches or ATMs. The system also enabled the government to periodically revise the lists of beneficiaries to prevent duplication or the arrival of support to those who are not eligible .

On the other hand, in light of the developments that the world is witnessing since the outbreak of the new Corona virus pandemic, governments around the world have tended to provide more financial support to families and affected groups. The importance of digital transformation also emerged in light of the increasing interest in contactless payment technologies to prevent the spread of the epidemic, which prompted many governments to adopt projects to shift towards electronic social transfer systems .

In the context of the rapid digital developments in the global economy, Arab countries have begun to digitize the systems of social transfers provided to poor families and those with limited incomes. Indeed, some countries at the level of the Arab world have made remarkable progress in digitizing a number of social services, including, for example, direct cash transfers, insurance services, social insurance, and others .

In this context, the study reviewed the progress made in the Arab countries in the field of digitizing social transfer systems, taking advantage of modern technologies that enabled the achievement of many gains, including expanding coverage to include a larger number of beneficiaries, ease of completion and entitlement of transfers, and ensuring optimal targeting of those who deserve Reducing administrative costs, and facilitating electronic connectivity with all government departments. The study indicated that the shift towards systems of electronic social transfers necessitated the adoption by Arab countries of legislative frameworks in support of this transformation, including amending social security systems, and enacting legislation aimed at regulating digital transactions, including electronic signature laws, ensuring information security, digital identity, data protection, and combating Information technology crimes .

The most prominent challenges facing Arab countries in terms of digital transformation in social transfer systems are the high levels of costs associated with this transformation, and the difficulty of using technologies by some segments of the population, including, for example, the elderly and some people of determination. The multiplicity of government agencies involved in providing social transfers raises the challenges of coordinating between social programs to ensure efficient provision of remittance services to the beneficiaries. In addition to the necessity to define a central body to link with the approved electronic government systems in the context of digitizing the systems of cash social transfers. To face these challenges, effective participation was supported, awareness-raising, and citizens encouraged to take advantage of the online services provided. The concerned government agencies have also worked to develop high-quality and easy-to-use services, while ensuring the security and privacy of information and data confidentiality .

The study indicated that some Arab countries have adopted future plans to lead the citizen-based digital transformation aimed at developing electronic systems for social transfers, by seeking to integrate cash support programs into an integrated national central information base, by establishing an electronic system through which all stages related to the use of Modern technologies, such as artificial intelligence and big data, contribute to raising the efficiency and speed of providing social services .

Based on the Arab and international experiences covered through this study, some recommendations were reached at the level of the policy-making process, including :

Accelerating the pace of digital transformation to develop electronic social transfer systems and increase their levels of efficiency and effectiveness, which has become especially important in light of the challenges posed by the Covid-19 pandemic .

Adopting modern technologies for document exchange and processing information and data available to government departments and agencies related to social transfer systems, to bring about a qualitative leap in the relationship between the administration and the beneficiaries, especially with regard to the use of artificial intelligence techniques and big data .

Establishing a unified national portal for electronic social transfer systems in order to facilitate transactions, in addition to identifying a central authority to provide these transfers that are linked informally with the rest of the government agencies .

Spreading the culture of using electronic services, and communicating with citizens to increase the level of utilization of electronic services and clarify the advantages of digital transformation in social transfer systems .

Enacting relevant laws and legislations with the aim of maintaining a safe electronic environment, working on developing the information infrastructure and attracting the necessary technical and human skills and capabilities .

Interest in developing social transfer applications via mobile phones .

Keeping up with technological developments in the field of electronic systems for social transfer payments and adopting continuous evaluation, in addition to allocating financial resources to develop the used electronic systems .

Adopting flexible digital payment systems similar to those that rely on mobile phones for withdrawals, money transfers, bill payments and other transactions related to social transfer systems .

The full version of the issue is available at the link

https://www.amf.org.ae/ar/study/digitization-social-transfers-arab-countries

https://www.amf.org.ae/ar/content/%D8%B5%D9%86%D8%AF%D9%88%D9%82-%D8%A7%D9%84%D9%86%D9%82%D8%AF-%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A-%D9%8A%D9%8F%D8%B5%D8%AF%D8%B1-%D8%AF%D8%B1%D8%A7%D8%B3%D8%A9-%D8%AD%D9%88%D9%84-%D8%B1%D9%82%D9%85%D9%86%D8%A9-%D9%85%D8%AF%D9%81%D9%88%D8%B9%D8%A7%D8%AA-%D8%A7%D9%84%D8%AA%D8%AD%D9%88%D9%8A%D9%84%D8%A7%D8%AA-%D8%A7%D9%84%D8%A7%D8%AC%D8%AA%D9%85%D8%A7%D8%B9%D9%8A%D8%A9-%D9%81%D9%8A-%D8%A7%D9%84%D8%AF%D9%88%D9%84-%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A%D8%A9