The ILO Global Campaign to extend Social Security to all

1
UNECA consultative meeting on Social Protection
in AfricaAddis Ababa 25-26 March 2009

•  What scope for Social Protection to accelerate
  progress in Africa towards the targets of the
  MDGs ? 
• Addis Ababa, 25-26 March. 2009
• Michael Cichon
• Tharcisse Nkanagu
• Social Security Department
• International Labour Office

2
Structure of the presentation

• One Social security is an economic
  necessity
• Two Social security is fiscally
  affordable
• Three Expected social outcomes
• Four Financing strategies

3
A new Deal...to re-build the society

• A new deal for people in a global crisis - Social
  security for all Making the economic and
  affordability case

4
Social security to re-build the world

• USA, 1929-30 economic crisis
• Response in Social security Act 1935
• Europe 1939-45 war
• Response in the extension of social security
  schemes
• (France 1945)

5
Brief history on achievements of Social security

• .A century ago , in Nordic countries
• Social security has been used to alleviate
  poverty, especially in favour of vulnerable
  categories.Women.. Poor categories
• Social security has been widely used to share the
  fruits of the economic growth
• Now, Nordic countries are the most stable and
  developped countries in the world.

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One in addition to a social necessity social
security is an economic necessity

• Economies cannot develop and grow without a
  productive workforce. In order to unlock a
  countrys full growth potential one has to fight
  social exclusion, ignorance, unemployabilitythrou
  gh social transfers
• Access to social health protection and education
  improves productivity levels (we have ample
  research evidence)
• The famous trade-off between growth and equity is
  a myth
• Investments on social security and economic
  development coincided in OECD countries
• Cash transfers in developing countries have
  multiplier effects on local markets (stimulate
  local production inter alia of food) and
• Stabilise domestic demand in times of crises

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Two Social security is affordableA simulation
exercise Assumptions

• Basic old age and invalidity pensions
• 30 of per capita GDP capped at US 1 PPP per day
  
• Child benefits
• 15 of per capita GDP capped at US 0.50 PPP,
  for a max. of two children in age barcket 0-14
• Essential health care
• based on an health system staffing ratio of 300
  medical professionals per 100,000 population,
  overhead 67 of staff cost
• Basic social assistance for the unemployed
• 100 day guaranteed employment paid by 30 of per
  capita daily
• GDP to 10 of the population
• Administration cost
• 15 of cash benefit expenditure

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Two Four cost of universal pensions
9
Two a basic social protection package is
affordable Total cost of all basic benefit
package components
10
Point Two a basic social protection package is
affordable share of total cost that can be
covered by domestic resources
11
A closer look at Tanzania
12
How much it would cost? A closer look at Zambia
13
Point two Social security is affordable other
studies and experience

• In Latin America the cost of a modest package of
  conditional child cash transfers, universal
  pensions and basic health care can be kept under
  5 of GDP the poverty headcount effects can
  reach a reduction of more than 50
• Basic social transfers presently already cover
  150-200 million people in about 25 countries
• Universal pension schemes in Botswana, Brazil,
  Lesotho, Mauritius, Namibia, Nepal, and South
  Africa, cost between 0.2 and 2 of GDP.

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Point Two Social security is affordable

• Static view Basic packages can be gradually
  accommodated within increasing fiscal envelops
• Dynamic view Investing in a basic set of social
  security benefits early might actually cost
  nothing, as modest schemes should pay for
  themselves by productivity increases that they
  can trigger
• Global view Less than 2 of Global GDP are
  needed to provide all the world's poor with a
  basic benefits package

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Point Three Estimated social impact of cash
transfers reduction of poverty (headcount)
16
Point three Estimated effect of a basic benefit
package on poverty headcount Tanzania
17

Point three Social impact lessons learned in
developing countries

• Poverty impact the old age grant in South Africa
  decreased destitution gap by 45 , oportunidades
  in Mexico reduced poverty rate of beneficiary
  households by about 12-points, similar order of
  magnitude in Brazil
• Education positive enrolment effects and school
  attendance duration in Mexico, Brazil, Colombia,
  Bangladesh, Nicaragua and Zambia
• Health positive effects on height, weight of
  children and nutritional status in Colombia,
  Mexico, Chile, Malawi, South Africa

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Point Four Financing strategies Lack of fiscal
space? The good news part I
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Point four Good news part II Growing fiscal
space

• Sub-Saharan African countries increased on
  average domestic revenue from 15 to 19 of GDP
  between 1997 and 2006
• and after Monterrey domestic resources increased
  (source OECD and ECA)

20
The Nepal case
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Four Financing strategies- revisited

• Domestic resource mobilisation
• Increase the efficiency of tax collection
• Reduce waste
• Broaden tax base
• Reduce tax evasion and avoidance
• Introduce self financing insurance systems
  (largely health care)
• Increase overall tax rates
• International resources (transitional financing)
• Modified social security oriented budget support
  ?
• Project financing to build national delivery
  capacity
• International financing of health care goods and
  services
• People-to-People Partnerships Global Social
  Trust
• A new Fund finance the start-up of basic social
  security schemes ?

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Four What is needed ?

• National social security strategies and social
  budgets required, that are a combination of
  emergency crisis response and systemic
  investments in the basic social security system
  and
• Determine social security gaps, priority needs
  and fiscal requirements for the crisis and the
  next 10 years
• Develop national fiscal space through tax reform
• Specify transitional external funding for basic
  benefits
• Determine the capacity requirements

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The way Ahead for Africa11th ARM Conclusion

• All african countries adopt coherent national
  social security strategies,including for the
  introduction or extension of a bbasic social
  security package that includes essential health
  care, maternity protection, child support forr
  schoo-aage childen, disability protection and aa
  minimum pension.

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Questions????

• You will find all the production of SEC SOC, and
  a space for the debate on its Website, in
• GESS(Global Extension of Social Security)
• Thank you