Transcript A Global Social Floor

UN Department of Economic and Social Affairs
International Labour Organization
A Global Social Floor
Bob Huber (UN DESA)
With thanks to Isabel Ortiz and Michael Cichon
REGIONAL EXPERTS MEETING
ON SOCIAL PROTECTION
9-11 June 2008
Dakar, Senegal
A Social Security Floor

Defined as a basic and modest set of social
security benefits for all citizens
1. Pensions: basic, universal, tax-financed, noncontributory pensions to provide income
security for older persons, persons with
disabilities and families that have lost their
main breadwinner
2. Child benefit: to provide income security for
families with children
3. Welfare: Some modest conditional support for
the poor in active age (employment
programmes, benefits), and
4. Financing universal access to essential health
care
All countries have some form of social security but few
provide a basic social floor for all
The case for a Global Social Floor:
§ Social Justice Arguments
§ Economic Arguments
§ Political Arguments
Redressing Income Asymmetries
and Reducing Poverty
HOUSEHOLD INCOME = Earnings + Rents/Private Transfers + Social Transfers – Taxes
National Development Strategies that
include
1. Employment-generating
macroeconomic and sector policies
2. Adequate labour regulations and
standards
3. Social Transfers – A Social Floor
4. Progressive fiscal policies
Developing Countries are already
expanding Cash Transfers Schemes
TYPE OF TRANSFERS
COUNTRIES
Unconditional
Household Income
Support
Chile, China, Mozambique, Zambia
Social Pensions
Argentina, Bangladesh, Bolivia, Botswana, Brazil,
Chile, Costa Rica, India, Lesotho, Mauritius, Moldova,
Namibia, Nepal, Samoa, South Africa, Tajikistan,
Uruguay, Vietnam
Child/Family Benefits
Mozambique, South Africa
Conditional
Cash for Work
Argentina, Ethiopía, India, Malawi, Republic of Korea,
South Africa
Cash for Human
Development
Bangladesh, Brazil, Colombia, Ecuador, Honduras,
Jamaica, Mexico, Mongolia, Nicaragua
Source: Source: ILO, 2007. Social Security Department, Geneva and UN DESA, 2007: World Economic and Social
Survey 2007, United Nations
Cash Transfers – Lessons Learnt
from Developing Countries
 Prevalence:
 In more than 25 developing countries
 Covering at least 150-200 million people
 Cost:
 Basic means-tested social assistance benefits- about 0.2%
GDP
 Complete set of basic universal benefits – From 2% to 5%
of GDP
 Poverty impact:
 South Africa reduced poverty gap by 48 %
 Mexico PROGRESA/Oportunidades and Brazil’s Bolsa
Scola: Reduced poverty by 12 points
 Education: Positive enrolment effects and school attendance
in Bangladesh, Brazil, Colombia, Mexico, Nicaragua and
Zambia
 Health: Positive effects on height/weight and nutritional
status of children in Chile, Colombia, Malawi, Mexico, South
Africa
Is Social Protection Affordable in
Developing Countries?
 Countries at the same level of economic development
differ significantly in their social spending
 The size of social protection systems may depend on
political attitudes
 to reduce poverty and construct a society for all
 to expand internal markets and increase productivity
 to win electoral support
 Affordability is at the core of the social contract
between governments and citizens: how much a society
is willing to redistribute through taxes and
contributions
 Recent studies show basic social protection is
affordable:
 ILO (2005-07) social floor in 12 countries
 UN DESA (2007) old-age social pension in 100 countries
 A “Universal but progressive” approach to expand
social protection coverage
A Social Floor is Affordable:
Cost of Old-Age Universal Pensions
($1 day) in 100 countries
Source: UN DESA, 2007: World Economic and Social Survey 2007, United Nations
Estimated cost of
Old-age/disability pensions, child
benefit, essential health care and
employment support
12.0%
in % of GDP
10.0%
8.0%
2010
6.0%
2020
4.0%
2030
2.0%
C
Bu
rk
Source: ILO, 2008. Social Security Department, Geneva
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A Social Floor is Affordable:
Costs for basic social protection
package as % GDP
(excluding health)
7.0%
in % GDP
6.0%
5.0%
4.0%
2010
3.0%
2020
2.0%
2030
1.0%
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Source: ILO, 2008. Social Security Department, Geneva
Financing a Social Floor
 A Social Floor is affordable, estimated at an
average 2%-5.5% GDP in developing countries
without health, 4%-11% with health cost
 Social transfers would grow with the fiscal space
made available by increasing GDP or Aid
 Social transfers complement but do not displace
spending on social services (e.g. education and
health)
 Domestic resources exist:
 Budget reallocation
 Billions lost through tax evasion and
inadequate tax systems
 Reverse current South-North flow of funds
Financing a Global Social Floor
 ILO estimates that Global Social Floor
would cost about 2% of global GDP
 Mechanisms:
 Increased Official Development Aid
 Multilateral and bilateral ODA to governments
 New instruments like SWAPs and Budget
Support
 Voluntary donations? ILO Global Trust, civil
society efforts
Building a Coalition for a
Global Social Floor
 Organize an international campaign to raise awareness
and mobilize political support for a Global Social Floor
as a means for combating poverty
 Mobilize international support from all concerned
stakeholders
 Support national campaigns to advocate for action
 Collect and disseminate research and information on
national experience and relevant international issues
 Strengthen networks for supporting national initiatives