Finding Solace for Acid Burn Victims

Syed Danish Ali

 

Overview

 

“Remember your humanity. Forget the rest”
Bertrand Russell in Russell-Einstein Manifesto

In this article, an attempt is made to explore how we actuaries can truly understand the problem of acid burning and situate it in its proper social context through data orientation, business acumen and knowledge of behavioral finance. In a nutshell, no innovation is trying to be propagated; there is no rocket science or eureka moment savior here for us that scientifically finds the cure for all the ills of economic inequality like penicillin for infections. It is a basic but effective exploration into the true nature of social realities.

Around 1,500 cases of acid throwing are recorded around the world every year, according to the Acid Survivors Trust International. Acid attacks while globally prevalent, appear to be disproportionately common in South Asia like Bangladesh, Cambodia, India and Pakistan. 80% of these attacks are directed at women and between 40%-70% of them target women under 18 years of age.

These crimes are mostly seen as crimes of passion, with main reasons being rejection of love, marriage or sex proposals. Intricated within this is the reason for lack of dowry. Dowry are large lump-sum money, materials like furniture, motorcycles etc. that a girl’s family is ‘supposed’ to give to the man for marriage.  In other cases, local rivalries are very common in rural areas over land, businesses and they morph into family disputes with generations after generations fighting against each other. Throwing acid on the opponents’ women is one part of the whole rivalry.

 

Situating the issue in its proper social context

It is vital to view this crime of acid burning holistically in its proper social context. This is what we actuaries practice in Enterprise Risk Management tool to recognize the context and see at a problem holistically.

While it looks like crime of passion, it has its sociological and structural causes. There is widespread patriarchy and women rights are not applied similarly across different social clusters. One social cluster like educated, urban, upper middle class in the same country will have lower incidences whereas in the same country, the social cluster of un-educated, rural, poor will report higher incidences of such crime.

The real enemy we are facing hence, is lack of financial inclusion, education, social awareness and the patriarchal culture which manifests differently in different social clusters. Inequality is also a major opponent as we can see different prevalence in these problems per different social clusters. One social cluster might be living in a totally different world or an alternative universe when compared to another social cluster. This is highlighted most prominently in developing countries where rich housing societies and sky-scrapers are just right next to slums. We do not need a ‘wormhole’ to travel to an alternative universe as a distance of just few meters separates those who can afford freedom and human rights to those permanently struck in poverty and its savageness.

Speaking broadly, there is an extreme anxiety for those facing wretched poverty and inequality. Psychologists highlight that we form anxious attachments in all spheres of our lives. Nowhere is this truer than for the poor. They are ever living in continuous fear of losing jobs, losing small businesses, getting bankrupt, losing friends, family and love partners to sudden calamities like death and severe sickness and so on. The result is possessiveness of the highest order, violence and depravity which only kicks us in the vicious cycle of self-defeating cognitions and behavioral conditioning. So, the idea is not on making everyone a millionaire, but to instill within them a sense of basic security that can sustainably cover the needs and essential wants of the poor.

 

Potential solutions

Financial solutions

Simple charity of feeding fish instead of teaching how to fish can hardly be effective in the long run. Similarly, commercial companies can help the relatively deprived but their ultimate goal is profit maximization. That does not mean however, that commercial companies are or will be structurally inept at poverty alleviation. In fact, many of the world’s notable achievements in poverty alleviation are from commercial companies’ actions.

Again, the solutions have to be adopted holistically as any one solution on its own, is highly insufficient. Majority of economy in South Asian Countries are part of informal economy where there is almost no concept of social welfare. There is very little provision of credit, saving and insurance protection in the informal economy and people have to rely on their own measures; like taking loans from loan sharks, getting involved in crime for lucrative overnight money earning, setting up committees which revolves the savings of the local group and so on. There are still two billion unbanked people around the world. According to World Bank’s Global Findex Report, as many as 72 per cent of these live in South Asia, East Asia and the Pacific and Sub-Saharan Africa, and 55 per cent are women. NGOs play a major role in addressing these vagaries but of course it is one piece to the whole solution.

Grameen bank is obviously the hallmark of micro finance institutions that started this movement in the first place but there are many micro-finance institutions now working in South Asia. Financial inclusion is a key aspect of changing cultural attitudes, and the insurance protection provides a unique sense of self-respect and security in extreme situations when money is most needed like death, health emergency and ruining of crops and livestock.

Micro-insurance for Health insurance and life insurance can be a huge source of security in crucial times of illness and death. This reflects the notion of the Schumpeterian economy, that security is more important than high earnings. Insurance is a major source of security and the arsenal through which we can play their role in alleviating poverty.

Technology is one part of the solution. Easy transferring of money through mobiles has resulted in millions transferring their money through mobiles. New fintech startups also have an opportunity to tap this huge informal sector of the economy. Planet N group of startup companies in Pakistan is focusing on financial inclusion by brining micro-insurance, nano-credit and saving to the masses through mobiles. Mobile companies have also started operating in the micro-finance sector as they already own the distribution channel of mobile phone payments and transferring. It will be interesting to see how they progress in the coming future.

Acid burn health insurance is one such idea to sell such policy to NGOs in South Asia where acid burn propensity is high (Bangladesh, India, Pakistan, Cambodia, and Myanmar) to allow NGOs to better aid these victims. We do not need to look further than Acid Foundation Pakistan. This foundation already provides average estimates of health costs. These health costs can be used to form insurance health sum insured limits. Taken from acid foundation, the extract is:

“While one patient needs at least 3 admissions for medical care, a donation can cover an admission as a whole or partially as follows:
For one admission: PKRs 50,000 (roughly USD 500)
Surgery & Medications: PKRs 30,000 (roughly USD 300)
Other services provided during ten days at the NCRU:
– Nursing Care
– Social Counseling
– Psychological Counseling
– Economic Help: PKR 15,000 (roughly USD 150)”

 

This product on an additional rider/add-on benefit on existing health products does not have to be an unprofitable micro product. Insurable interest can be induced in NGOs as they are bound to sometime encounter an acid burn victim because they see ground realities of the poorest and have the reach. Low premium can be charged initially to make it more attractive which covers up to 2 victims per NGO. An additional premium can be charged if the number of acid victims exceed 2 in a given year in an NGO. This is quite common in excess of loss reinsurance treaties, where minimum premium deposit is paid by the insurer and once the annual limit is exhausted, the insurer has to pay additional reinstatement premiums to the reinsurer for further coverage.

 

This product or additional rider can be made practically profitable and viable. It’s time we build a product that is made for ESG considerations first and profit considerations second instead of launching product on profitability consideration and making ESG considerations secondary.

 

Another solution can be through impact investing. There are quite a few family offices and corporations that donate to selected NGOs and tackle different social issues. Attention can be driven to this acid burning issue to secure some impact investment for this. It is yet too early to speak of making a social bond for acid burn victims as social bonds have only started appearing in developed countries since 2011 and we have yet to see their introduction in widespread use. Nevertheless, impact investing is still a viable front to target for providing financial relief to victims of this crime.

 

 

Legal solutions

There needs to be legislation to punish the perpetuators of such crime. Pakistan and Bangladesh have enacted bills against this crime which has increased punishments and conviction of these crimes. However, the social context sustaining this crime means that these legal acts have had limited success. Restrictions of having and selling acids have to be made a priority with vigilant supervision by the States as well. Other legal measures like allowing only one food dish per wedding to decrease expenses on wedding are hardly implemented.

Social solutions

There needs to be more social awareness. Social problems like dowry can readily be eliminated once we create a social narrative that allows marriages to be conducted without any need for dowries. Government alone cannot simply ban dowry, because as long as there is cultural approval for dowry, the people themselves will not change. Social awareness should be created through media, NGOs, local leaders and human rights activists. Dowry is a deep problem, but once we get to the core and root of it, it is just collective trend; one person shows to other that he/she has good status and shows it off through large dowries; the other person seeks to out-do him/her and so on a vicious cycle starts and sustains itself. As we have seen in much of sociology, these self-fulfilling vicious cycles have a tendency to be endlessly renewable unless broken off by deliberate social efforts.

There is a need to increase the rates of education and health services so as to increase awareness in the worst-off social clusters that seem immune to most modern notions like human rights, basic provision of services and so on. The micro-finance aspect also helps in reducing inequality between these alternative universes.

One person Musarrat Misbah, owner of high end beauty salon chain Depilex in Pakistan provides shelter, psychological comfort, medical treatment and beautician training and jobs in her salons to empower these victims of unspeakable horror.[1] This is an example of integration of these victims back into the society. Surely, we can get together to form more structured platforms and support. Integration is the main challenge because once these victims are attacked, they survive to live around a far brutal world that excludes them from family, going outside, having a job and simply from integrating back into the society. This lack of integration alleviates depression and suicidal tendencies in such victims.

Building a wider social narrative into hiring people with disabilities into the national workforce is also a positive step in this regard. Governments can be particularly keen on having some employees with disabilities to add diversity into their operations.

On the entrepreneur font, the proposal is the same as Muhammad Yunus of Grameen of ‘social-business’. Inaugurating companies whose business model is not just profits, but the welfare of its consumers and society as well. NGOs can and do allow platform for poor to earn small but certain sums. It does not have to be enormous, but it has to be relatively stable and secure source of earning.

Apart from consumer products aimed for the poor like fortified low yogurt, easy mobile balance topping facilities etc. microfinance can play a leading role in this regard as well. Actuaries are well regarded as gurus in Insurance and have a leading presence broadly over much of finance.  For instance, into operational setup of such microfinance, group loans (as opposed to individual) perform better and have less defaults. Under this scheme, the group is not responsible for default of an individual’s share of loan, but then no further loan is extended to that group. Targeting majority of clients as women is more optimal because NGOs have found that giving resources to women helps the whole family rather than just the male.

Such operational procedures reflect tailored behavioral business model from many aspects of applied psychology. Poor themselves know the best way out of their inequality but they require a platform through which they can convert their aspirations into reality. With a suitable platform, the poor are innovating themselves and painting their conceptual canvas in reality like mobile technology for health awareness and small clinics with preventive medicine as major focus, mobile outlets for transferring cash, postal offices for small deposits and insurance, promoting thrift shops that utilize local rejected products and so on.

 

Conclusion

A behavioral outlook into stepping into shoes of those who face economic inequality should be merged with data oriented way of operations for the social businesses. A quantitative approach induces some sense of objectivity. Again, actuaries have historically have had ‘data oriented’ mentality as well as solid quantitative skills. Experience of NGOs and social businesses generally show that there is more reason in data than most of our opinions. We can integrate data into the very fabric of decision making of social business because not just it provides practical feedback into operations but also breaks many of the stereotypes associated with the deprived.

Of course, we alone cannot solve this problem of acid burning. It will require, as with any other Enterprise Risk Management holistic framework, to engage all relevant stakeholders to arrive at a potent all-rounded ‘multiverse’ solution to this problem.

This article is but a whisper to actuaries from across the world to look holistically at poverty as a social construct that is engineered by the society, but which can be overcome through collective conscious activities.

As always, taking the first step is the main challenge. First mover hesitation is almost always crippling especially in social objectives like reducing economic inequality and improving the life outcomes of the worst-off. However, the passion should shift from our debates to our actions. We have interpreted poverty and economic inequality in a myriad of ways; the point is to overcome it.