UN Department of Economic and Social Affairs International Labour Organization

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UN Department of Economic and Social
AffairsInternational 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

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A Social Security Floor

• Defined as a basic and modest set of social
  security benefits for all citizens
• Pensions basic, universal, tax-financed,
  non-contributory pensions to provide income
  security for older persons, persons with
  disabilities and families that have lost their
  main breadwinner
• Child benefit to provide income security for
  families with children
• Welfare Some modest conditional support for the
  poor in active age (employment programmes,
  benefits), and
• Financing universal access to essential health
  care
• All countries have some form of social security
  but few provide a basic social floor for all

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The case for a Global Social Floor

• Social Justice Arguments
• Economic Arguments
• Political Arguments

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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

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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
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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 Brazils 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

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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

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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
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Estimated cost ofOld-age/disability pensions,
child benefit, essential health care and
employment support
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)
Source ILO, 2008. Social Security Department,
Geneva
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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

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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

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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