By NEIL HARTNELL Tribune Business Editor THE Bahamas' proposed $10 million social security reform initiative is a 'first-of-its-kind' in the Caribbean, as it will tie welfare payments to "improving human capital" through better educational achievement for children from poor Bahamian families. An Inter-American Development Bank (IDB) report on the Social Safety Net Reform Programme, which has been obtained by Tribune Business, explains that benefit payments will be conditional on recipients keeping their children in school and tackling obesity/chronic non-communicable diseases. On the education front, in particular, the IDB paper outlined a strong link between poverty and educational achievement in the Bahamas, with more than one-third of poor 25-29 year-olds failing to complete secondary school. This compared to the 91 per cent of 'non-poor' Bahamians who had completed secondary or tertiary education. The unspoken findings are that with 37 per cent of 'poor' 25-29 year-old Bahamians failing to complete secondary school, the pattern of poverty and low educational achievement is likely to be repeated in the next generation. Describing how, with June 2013 as the 'phase-in' start, benefit payments - to be called conditional cash transfers (CCTs) - would be dependent on the recipients meeting certain conditions, the IDB report explained: "Conditionalities of the CCT will be aligned with the main epidemiological and education challenges in the Bahamas. "In the case of health, it is expected that these incentives will be focused on prevention and management of obesity and chronic conditions. While this particular problem has not been tackled through CCTs, it is an area of growing concern in the region. The program will be an important innovation and learning opportunity for the design and implementation of CCTs in the region." "Human capital", or workforce/labour development, has often been neglected in the Bahamas, most investment incentives offered by the Government tending to focus on aiding capital. The IDB report suggested that the social security reforms will attempt to address this, and seek to break the cycle of poverty-induced low educational achievement. "The programme would introduce CCT targeted to the poor, and will focus on improving human capital accumulation and a healthier lifestyle among children from poor households," the report added. "Education outcomes and poverty are closely linked in the Bahamas. For poor children, the pattern appears to be one of late entry, poor performance and early school leaving." Breaking this down by statistics, the IDB report said: "At three years of age, about 34 per cent of poor children are enrolled in pre-school compared to 75 per cent of non-poor children. While enrollment rates seem to be high and similar among the poor and the non-poor at all grades, there are gaps in achievement. "Among the 25 to 29 year-olds, 91 per cent of the non-poor have completed secondary or higher, compared to 63 per cent of the poor. In addition 22 per cent of poor students, in contrast to 11 per cent of non-poor students, repeat at least one grade of primary." The IDB drew on the Department of Statistics for its profile of Bahamian poverty. Its report noted that, in 2002, half the 9.3 per cent of Bahamians living in poverty were children aged under 15 years-old, with poverty rates on some of the smaller Family Islands as high as 21 per cent - meaning that one in five Bahamians were living in these conditions. Given that the IDB's Bahamas 'poverty profile' was drawn up in 2004, at a time when the economy was booming, it is likely that the recession has made the situation outlined by its data that much worse. "Poverty rates vary considerably between islands, and have higher values for the Family Islands," the IDB report on the proposed social security reforms said. "The latest available poverty figures show that incidence of poverty is 8.3 per cent on New Providence and Grand Bahama; 13.2 per cent on Abaco, Eleuthera and Andros; 16.6 per cent on Exuma and Long Island; and 21 per cent on the other Family Islands. However, over 75 per cent of the poor live in New Providence and Grand Bahama." Explaining the rationale for linking benefit payments to the health of children from poor families, the IDB report said non-communicable diseases accounted for 74 per cent of all deaths in the Bahamas, with cardiovascular disease and diabetes leading the way at a collective 40 per cent share. "The most significant health risks to children are nutrition-related," the IDB report said. "In 2008, less than 2 per cent of all school age children were classified by the Ministry of Health as underweight. "However, in that same year, the rate of overweight students ranged from 9.2 per cent for students in Grade 1 to 16.6 per cent for students in Grade 6. Recent studies also indicate that females of lower economic status with less than tertiary education appear to be more vulnerable to obesity."