Transcript Presentación Secretario Ejecutivo

SHAPING THE FUTURE OF
SOCIAL PROTECTION:
ACCESS, FINANCING
AND SOLIDARITY
Andras Utholl
Officer-in-Charge
Social Development Division
THIRTY-NINTH MEETING OF THE PRESIDING
OFFICERS OF THE REGIONAL CONFERENCE ON
WOMEN IN LATIN AMERICA AND THE
CARIBBEAN
Mexico City, 11-12 May 2006
Background and the Reforms of the 1990s

The welfare State founded upon the concept of a
labour-based society has not lived up to expectations
 Limited coverage, which is a factor in social exclusion
 Income inequality carries over into social protection

The reforms of the 1990s sought to improve financing
and access by:
 Creating a closer link between employment and protection
based on the formalization of the labour market
 Placing more emphasis on incentives and efficiency than on
solidarity
Despite the reforms, non-contributory
coverage has not increased since 1990
LATIN AMERICA: COVERAGE IN 1990 AND 2002
(% of employed persons paying contributions)
80
70
COUNTRIES WHERE
Coverage c.2002
60
C.Rica
Chi
Arg*
Méx
COVERAGE IMPROVED
50
Bra
El Sal
40
Average
30
Ecu*
Bol*
20
COVERAGE WORSENED
Nic
10
COUNTRIES WHERE
0
0
10
20
30
40
Coverage c.1990
50
60
70
80
Inequity in the structure of contributions
LATIN AMERICA AND THE CARIBBEAN:
EMPLOYED WORKERS WHO PAY CONTRIBUTIONS (c. 2002)
Average coverage: 38.7%
68.2%
54.9%
45.4%
32.3%
21.9%
1
Urban
21.7%
2
3
Urban
Rural
4
5
Urban
Q5
Formal Informal (rich)
20.4%
6
Q1
(poor)
18.9%
7
8
Men
Women
(% working age
population)
On average



4 out of every 10 employed persons pay into the
social security system
4 out of every 10 persons over 70 receive
income through retirement or other pensions
4 out of every 10 persons live in poverty
A high degree of heterogeneity among the
countries of the region
NEW DEMANDS FOR SOCIAL
PROTECTION
 Social protection is essential in order for democratically elected governments
to ensure that economic development becomes a positive force for all.
 Social protection must be politically and financially viable (combining
efficiency and solidarity).
 Change in approach: employment should no longer be seen as the only
mechanism for access to social protection.
A new social covenant is needed in order to UNIVERSALIZE
SOCIAL PROTECTION through:
 Achieving efficiency and solidarity in the financing of benefits
 Dealing proactively with changes in demographics,
epidemiological patterns and family structure
 Neutralizing sources of discrimination:
• In the definition of employment vs labour (roles)
• In the labour market
• In social protection systems
THE REFORMS MUST BE REFORMED, AND
THERE IS NO ONE-SIZE-FITS-ALL SOLUTION

This calls for a social covenant in order to:
 Define explicit, guaranteed and enforceable rights
 Define levels and sources of financing
Contributory – Non-contributory
 Integrate solidarity mechanisms
 Develop a framework of social institutions
• Social policy management
• Coordination of supply of services
Social protection:
a change in approach



Labour should not be perceived in the short or
medium term as the only mechanism for access
to social protection
Need to strike a better balance between
incentives and solidarity
New forces of change in demographics,
epidemiological patterns and family structure
A new social covenant is needed in
order to universalize social protection
Content of a new social covenant
Explicit, guaranteed and enforceable
rights
 Definition of levels and sources of
financing (solidarity mechanisms)
 Development of a framework of social
institutions

Promoting a social covenant
Democracy
Compatible with a fiscal covenant
Fiscal
responsibilities
• With minimum
guarantees
• Modify the tax
burden
• Improve the
productivity of
public delivery of
socially valued
and/or public goods
Highlighting the
role of education
• Universal
secondary education
• Reduce
rural/urban gap and
differences between
socioeconomic
levels
• Narrow the gaps
between elite and
public education
• Pre-school for the
poor
• Learning to learn
• School insurance
More and better
jobs
• Address
productive
heterogeneity
• Pro-employment
investment
• Human resources
approach
• Reduce
discrimination
• Improve or
supplement labour
relations with
demands of
innovation and the
business cycle
• Retraining
• Unemployment
insurance
Universal,
solidarity-based
and efficient social
security
• Reform
public/private mix
• Incorporate
solidarity into
financing to improve
access without
sacrificing savings
or insurance
• Improve
contingent risk
protection
• Finance housing
for the poor
Improving social
cohesion
• Promote citizen
participation in
matters of collective
interest
• Improve
governance by
modifying incentives
for investment in
privatized basic
social services and
upgrade their
regulatory
framework
Sources of financing
 Challenges
for social protection
systems:
 Increase non-contributory financing
by boosting tax collection and
reallocating expenditure
 Include a solidarity component within
the contributory scheme
Public revenues
LOW LEVEL OF TAX REVENUES
(% GDP, 2004)
40%
35%
Total: 20.8%
Tax revenues+SS: 17.5%
30%
25%
20%
15%
10%
Other revenues
Venezuela
(RB)
Uruguay
Rep.
Dominicana
Perú
Paraguay
Panamá
Nicaragua
México
Honduras
Guatemala
Ecuador
El Salvador
Tax revenues
Costa Rica
Colombia
Chile
Brasil
Bolivia
Argentina
0%
Haití
5%
Social security contributions
Capital revenues
Working towards universal social protection
in health implies recognizing:
Sharp inequities in access to and quality
of services
 That the lack of integration between
public and private social security
sectors spawns inefficiencies and risk
selection (skimming)
 The process of demographic,
epidemiological and technological
transition

Inequity: out-of-pocket spending on health
Public spending on health
as % of GDP
8
7
COL
CUB
6
OECD
PAN
5
4
3
URY
2
1
CRI
BRB DMAARG
GUY GRD BOL
VCT
NIC
SUR
SLV
JAM LCABRAKNA HND
PRY
ATG
HTI
MEX
CHL
BLZ
LAC
VEN
DOM
PER GTM
ECU
TTO
0
0
10
20
30
40
Out-of-pocket spending on health as a
percentage of total spending on health (%)
50
60
Incidence of disease
DALYs per 1,000 inhabitants
300
250
200
Latin America and the Caribbean
World
average
98
Latin
America
and the
OECD, high- Caribbean
income
45
112
Middleincome
39
115
120
103
29
27
39
8
108
50
0
Highincome
35
150
100
Low-income
29
12
Group I (communicable)
Group II (non communicable)
Group III (accidents, violence)
101
108
26
The health reform agenda must
include:

Steps towards the integration of subsystems:
In financing:
• Integrating solidarity-based contributory and non-contributory
mechanisms (public and social security)
• Defining benefits with universal coverage and guaranteed
enforceability (health needs)
In provision:
•
•
•
•

Separating financing and provision functions
Improving payment, regulatory and supervisory mechanisms
Promoting integration into the network of public providers
Public/private mix
Public health more focused on:
 Primary health care, preventive and curative medicine, and
promotion
 Defining universal programmes on the basis of morbidity and
mortality
 Improving checks and cross-checks
Challenges for pension systems
Ageing of the population and limited
contributory and non-contributory
pension coverage
 Segmented contributory systems with
financing difficulties
 Difficulty of reaching a consensus on
parametric reforms in PAYG systems
 Limited coverage of non-contributory
systems

100
90
80
70
60
50
40
30
20
10
0
Latin America
Venezuela (RB)
Uruguay
Dominican Republic
Peru
Paraguay
Panama
Nicaragua
Mexico
Honduras
Guatemala
El Salvador
Ecuador
Costa Rica
Colombia
Chile
Brazil
Bolivia
Argentina
Percentage of individuals receiving
retirement or other types of pensions
Pension coverage: Only 4 out of every 10
persons over 70 receive some sort of pension
42
The pension-system reform agenda
should include measures for:

Increasing coverage through the non-contributory component


Targeted pension benefits can halve the poverty rate at an average cost of
0.9% of GDP
Reforming the contributory system


Contributory solidarity
Financial viability
• Discretionary parametric reforms
• Notional accounts


Treating individually-funded accounts as a complementary
mechanism

Differing modalities - transition costs

Industrial organization
Promoting system convergence


Promote equity by standardizing and validating benefits
Make benefits portable, thereby facilitating labour mobility
Non-contributory pensions for over-65s to cut the
poverty rate in half
COST OF PENSION BENEFITS EQUIVALENT TO ONE POVERTY LINE
(As percentage of GDP)
6
Cost of targeted pension
Cost of universal pension
5
4
0,9 2.2
3
2
Venezuela
(R.B.)
Uruguay
Dominican
Republic
Paraguay
Panama
Nicaragua
Mexico
Honduras
Guatemala
Average LAC
El Salvador
Ecuador
Costa Rica
Colombia
Chile
Brazil
Bolivia
0
Argentina
1
Promoting a social covenant
Compatible with a fiscal covenant
Democracy
Fiscal
responsibilities
• With minimum
guarantees
• Modify the tax
burden
• Improve the
productivity of
public delivery of
socially valued
and/or public
goods
Improving social
cohesion
• Promote citizen
participation in
matters of
collective interest
• Improve
governance by
modifying
incentives for
investing in
privatized basic
social services and
upgrade their
regulatory
framework
Highlighting the
role of education
• Universal
secondary
education
• Reduce
rural/urban gap
and differences
between
socioeconomic
levels
• Narrow the gaps
between elite and
public education
• Pre-school for
the poor
• Learning to
learn
• School
insurance
More and better
jobs
• Address
productive
heterogeneity
• Proemployment
investment
• Human
resources approach
• Reduce
discrimination
• Improve or
supplement labour
relations with
demands of
innovation and the
business cycle
• Retraining
• Unemployment
insurance
Universal,
solidarity-based
and efficient
social security
• Reform
public/private mix
• Incorporate
solidarity into
financing to
improve access
without sacrificing
savings or
insurance
• Improve
contingent risk
protection
• Finance housing
for the poor
CTP
BACKGROUND






.
Poverty limits people’s ability to exercise their
citizenship and to demand their rights.
A number of factors perpetuate the intergenerational
transmission of poverty.
The multidimensionality of poverty has given rise to a
wide range of projects and other measures.
The document focuses attention on:
Emergency job-related programmes
Conditional transfer programmes
IN SOME COUNTRIES CONDITIONAL TRANSFER
PROGRAMMES (CTP) ARE IMPORTANT
PROGRAMME
Beneficiaries
/ Population
(%)
Spending
/ GDP
(%)
“Bolsa Familia”
(Brazil, 2003)
16.0
0.28
Chile Solidario
(Chile, 2002)
6.5
0.10
Familias en Acción
(Colombia, 2001)
4.0
0.30
Superémonos
(Costa Rica, 2000)
1.1
0.02
Programa de Asignación Familiar PRAF
(Honduras, 1990)
4.7
0.02
Programme of Advancement through
Health and Education (PATH)
(Jamaica, 2002)
9.1
0.32
Oportunidades (former Progresa)
(Mexico, 1997)
25.0
0.32
Red de Protección Social Mi Familia
(Nicaragua, 2000)
1.2
0.02
Challenges for anti-poverty social programmes
Alleviate poverty in the short run
 Break the cycle of intergenerational
poverty transmission (human capital)
 Create a framework of social
institutions:





Intersectoral coordination and integration
Transparency and evaluation
Continuity and consistency
Engagement of civil society
Proposals for these programmes
1.
2.
3.
4.
5.
6.
Share the programme-generated workload within the household
(CTP)
Incorporate social capital criteria
Proactive role for the State in incorporating beneficiaries into the
programmes
Ensure that supply of health and education services match
programme-induced increase in demand (CTP)
Adaptability to context changes (explicit exit and entry rules)
Strengthen skills-building in employment programmes
Supplement human capital training with the promotion of productive
policies
Promoting a social covenant
Compatible with a fiscal covenant
Democracy
Fiscal
responsibilities
• With minimum
guarantees
• Modify the tax
burden
• Improve the
productivity of
public delivery of
socially valued
and/or public
goods
Improving social
cohesion
• Promote citizen
participation in
matters of
collective interest
• Improve
governance by
modifying
incentives for
investment in
privatized basic
social services and
upgrade their
regulatory
framework
Highlighting the
role of education
• Universal
secondary
education
• Reduce
rural/urban gap
and differences
between
socioeconomic
levels
• Narrow the gaps
between elite and
public education
• Pre-school for
the poor
• Learning to
learn
• School
insurance
More and better
jobs
• Address
productive
heterogeneity
• Proemployment
investment
• Human
resources approach
• Reduce
discrimination
• Improve or
supplement labour
relations with
demands of
innovation and the
business cycle
• Retraining
• Unemployment
insurance
Universal,
solidarity-based
and efficient
social security
• Reform
public/private mix
• Incorporate
solidarity into
financing to
improve access
without sacrificing
savings or
insurance
• Improve
contingent risk
protection
• Finance housing
for the poor
Economic and social rights in public
policies
 Three
dimensions of such
rights:
 ethical
 procedural
 content
Work to build genuine social
citizenship
In summary




The job of universalizing and improving social
protection is yet to be completed
Employment alone cannot universalize coverage
Greater complementarity between solidarity and
incentives
Reforms should include integration of contributory
and non-contributory systems
Reforms within the context of a social covenant in which
rights constitute the normative horizon and economic
inequalities are constraints to be overcome
SHAPING THE FUTURE OF
SOCIAL PROTECTION:
ACCESS, FINANCING
AND SOLIDARITY
Andras Utholl
Officer-in-Charge
Social Development Division
THIRTY-NINTH MEETING OF THE PRESIDING
OFFICERS OF THE REGIONAL CONFERENCE ON
WOMEN IN LATIN AMERICA AND THE
CARIBBEAN
Mexico City, 11-12 May 2006