Social Protection: a mechanism for inclusive

development

EU-Africa Economic and Social Stakeholders’ NetworkBrussels, 5 March 2014

Griet Cattaert, ILO

Overview

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The need for social protectionPervasive poverty and income inequality

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1.4 billion people are still living on less than US$1.25 a day (World Bank). 1.75 billion people experience multidimensional poverty with deprivations in heath,

economic opportunities, education and living standards (UNDP). 925 million suffer from chronicle hunger (FAO). 2.6 billion people do not have access to improved sanitation and 884 million people do

not have access to improved sources of drinking water (WHO/UNICEF). 796 million adults are illiterate (UNESCO). 8.8 million children under the age of five die every year from largely preventable health

problems (WHO).

About 75 per cent of the population is not

covered by adequate social security.

1 out of every 4 person (ILO).

Pervasive Poverty

The need for social protectionPervasive poverty and income inequality

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The richest 20 per cent of the world population received more than 80 per cent of the world’s income in 2007, while the poorest 20

per cent received about one per cent.

Income Inequality

The need for social protectionPervasive poverty and income inequality

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Income Inequality

The need for social protectionPervasive poverty and income inequality

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Ageing: the share of the population at age 65 and over is estimated to increase from 8 per cent in

2013 to 16 per cent by 2050 (UNDESA, Population division, 2013).

Migration: at least 232 million international migrants today, a particularly vulnerable group (IOM,

2014)

Rural-urban shift: urban populations are forecast to exceed rural ones (this may threaten the

traditional mechanisms of solidarity).

More demographic challenges to come

The need for social protectionSocial and economic necessity of social protection systems

• We know from more than one century of history of the modern welfare state that social transfers and services are powerful policy instruments to combat poverty, insecurity and inequality and ...achieve the MDGs

• Social services and transfers are an economic necessity to unblock the full economic potential of a country, Only people that are well nourished, well educated and as healthy as possible, and have been brought up in socially secure families will in the long run be productive contributors to national and the global economies and constructive, participating and responsible members of societies who can forcefully make their voices heard

• There is now widespread acceptance that social protection/security serve as social and economic stabilisers in times of crisis - Countries with existing systems are in a better position to cope with the social and economic fall-out than those who have to introduce new ad-hoc measures.

• Social protection is one of the foundations for inclusive, equitable and sustainable development

A floor of social protection is thus a prerequisite investment in the development process and in people.

The need for social protectionCoverage Gap

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80% of the world

population do not have access

to comprehensive

coverage

80% of the world

population do not have access

to comprehensive

coverage 30% of the population do

not have access to essential

health care

30% of the population do

not have access to essential

health care

Social protection coverage

gap

Social protection coverage

gap

Only 15% of the population has access to

unemployment benefits

Only 15% of the population has access to

unemployment benefits

60% of the elderly do not

receive a pension

60% of the elderly do not

receive a pension

50% of the children

are living in poverty, many lack access to

health and education

50% of the children

are living in poverty, many lack access to

health and education

The SPF ConceptThe virtuous cycle effect

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Quality education for all, strong social protection, prudent

macroeconomic policies, active labour market, policies, and

effective bargaining

Rapid productivity growth with income gains shared broadly, a

strong middle class

Sustained and broad-based growth in domestic effective demand, low

levels of indebtness

Stable and resilient GDP growth, high employment and social peace Virtuous cycle

Source: SPF-AG discussion notes, by Kemal Dervis.

The underlying development policy paradigm: “Growing with equity”

Social Protection Floors R202Global legal roots

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Adoption of R202 on National Floors of Social Protection (ILC 2012)

“Social protection floors are nationally defined sets of basic social security

guarantees which secure protection aimed at preventing or alleviating poverty,

vulnerability and social exclusion”

Legal roots

• Recalling that the Declaration of Philadelphia

• Considering the Universal Declaration of Human Rights, in particular

Articles 22 and 25, and the International Covenant on Economic, Social

and Cultural Rights, in particular Articles 9, 11 and 12

• Considering also ILO social security standards

Social Protection Floors R202Objective

Provides guidance to Members to

(a) establish and maintain, as applicable, social protection floors as afundamental element of their national social security systems; and

(b) implement social protection floors within strategies for the extension ofsocial security that progressively ensure higher levels of social securityto as many people as possible, guided by ILO social security standards.

Social Protection Floors R202

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NATIONALLY-DEFINED GUARANTEES:The guarantees should ensure at a minimum that, over the life cycle, all in need have access to essential health care and to basic income security which together secure effective access to goods and services defined as necessary at the national level.

They should comprise at least the following basic social security guarantees:

national definition of minimum levels

SCOPE:

Guarantees should be provided to at least all residents and children, as defined in national laws and regulations, subject to Members’ existing international obligations. (para. 6)

Social Protection Floors R202

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When formulating and implementing social security extension strategies, Members should (para. 14):

NATIONAL DIALOGUE

National experiencesSPF in practice

2. What as been done so far?

• One: Advocacy at global, regional, national levels => e.g. UNCSocD Resolution 2010, UN Millennium Summit, G8, G20, Yaounde Triparite Declaration, South South Dialogue, input to G20, Signature campaign

• Two: Country operations in Cambodia, Burkina Faso, Mozambique, Nepal, Togo, Benin, Vietnam... with other agencies and IMF on basis of joint UN manual

• Three: High-level Social Protection Floor Advisory Group established under chairpersonship of Ms. Michelle Bachelet ; report issued in October 2011 “Social protection floor for a fair and inclusive globalization”

• The 100th ILC and the emergence of a new policy paradigm

HEALTH: China (urban & rural), India (RSBY), Thailand (UCS), Mexico (Seguro popular), Colombia (regimen subsidiado), Uruguay, Chile (plan AUGE), Burkina Faso, Rwanda …

CCTs: Brazil (Bolsa Familia), Mexico (Oportunidades)

Employment guarantee schemes: India (NREGA),Uruguay (Política de empleo promovido),Argentina (Plan jefes y jefas de familias)

Social pensions: Brazil, South Africa, Bolivia (pension dignidad), Chile (pension basica solidaria), Thailand (500 Bath scheme), China (rural old age pension)…

Comprehensive SPF: Brazil, Mexico, Chile, Uruguay

National experiencesFiscal space for Social Protection exists even in the poorest countries

• There is national capacity to fund social protection floors in virtually all countries• Spending on SP is an investment, as it can result in positive, immediate and long-term economic and social

return

• Affordability and financing are not only technical questions but also political choices

• There are many options, supported by UN and IFI policy statements:

Re-allocating public expenditures

Increasing tax revenues

Fighting illicit financial flows

Lobbying for increased aid and transfers

Tapping into fiscal and foreign exchange reserves

Restructuring debt Adopting a more accommodative macroeconomic framework (e.g. tolerance to some inflation, fiscal deficit)

ILO Follow-up and strategy for implementation: support for countries in…

Making social protection floors a national reality

worldwide

Promoting the implementation

of R.202 – Awareness

raisingBuilding the capacities of

national constituents –

Technical advisory and capacity

building

Supporting constituents through knowledge sharing,

technical cooperation and advice

Policy, knowledge and tools development

Supporting national dialogue

processes

Building and strengthening partnerships

ILO’s right based approach to social protection

• Supporting national scale-up

• Providing technical support and critical policy advise in the design, legal framework, costing, implementation and/or monitoring and evaluation of social protection programmes and capacity development promoting social inclusion worldwide.

• Encouraging national social dialogue to ensure that development decisions are socially-responsive and have national ownership.

• Building linkages to eliminate the worst forms of exploitation, like child labour, and to ensure that people in rural areas, the informal economy, domestic workers, migrant workers, people with disabilities and others are included in development.

• Being a global leader and advocate of social protection floors. ILO has nearly 100 years of experience in advocating for policies and approaches that protect workers and vulnerable people.

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“The world does not lack the resources to eradicate poverty, it lacks the right

priorities.”

Juan Somavia, Director General of the ILO