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HOW CAN SOCIAL SECURITY SCHEMES BE DESIGNED FOR LOWINCOME COUNTRIES TO EFFECTIVELY PROVIDE FOR THE P

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Objectives of social security. Protection of the poor and vulnerable; ... Social security context in SADC (UNDP ... South Africa social security transfers ... – PowerPoint PPT presentation

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Title: HOW CAN SOCIAL SECURITY SCHEMES BE DESIGNED FOR LOWINCOME COUNTRIES TO EFFECTIVELY PROVIDE FOR THE P


1
HOW CAN SOCIAL SECURITY SCHEMES BE DESIGNED FOR
LOW-INCOME COUNTRIES TO EFFECTIVELY PROVIDE FOR
THE POOREST?
  • Presentation to the International Conference
    Taking Action for the Worlds Poor and Hungry
    People
  • Beijing, China
  • 15th 20th October 2007
  • Fezile Makiwane

2
Objectives of social security
  • Protection of the poor and vulnerable
  • Acceptable standard of living
  • Ensure consumption smoothing
  • Reduce risk and
  • Spreading income over a life cycle

3
Social security context in SADC (UNDP Report,
2005)
  • High levels of unemployment
  • 50 unemployment
  • High levels of poverty
  • Up to 60 of population live below 1 per day
  • 30 of population undernourished
  • 72.9 of population in Zambia live below
    national poverty line
  • Income inequalities
  • Income inequality more than 50 in 8 SADC
    countries

4
Coverage
  • Over 2 billion people world-wide are not covered
    by any social security arrangements
  • About 50 million people in low-income countries
    not covered against basic social risks
  • Mostly contributory social insurance for
    employees
  • Social insurance restricted to those in formal
    employment (which is as low as 10 in some
    countries)

5
Modalities for coverage
  • Enhancing general living standards and expanding
    basic human capacity
  • Access to basic services
  • Housing
  • Employment generation
  • Education

6
South Africa social security transfers
  • The main objective of social assistance transfers
    is to reduce poverty and promote social
    development,
  • Over 12 million South Africans receive social
    assistance through some form of income grant.

7
South Africa- CSG
  • The CSG introduced in 1998 as a poverty
    alleviation mechanism
  • Seeks to support income of poor households to
    enable them to care and provide for basic needs
    of the child.
  • It is a means tested cash transfer program which
    is paid to a primary care giver (PCG) of a child.
  • The grant is weighted to rural areas and informal
    settlements.
  • The program currently covers over 8 million
    children up to the age of 14.
  • The CSG transfers are unconditional cash
    transfers.

8
South Africa CSG
  • The average households receiving CSG were found
    to derive
  • one third of their total income from CSG,
  • a quarter from other transfers and
  • One third from employment.
  • 18 eligible households wholly dependent on the
    CSG, and 36 depend on the CSG and on other
    state transfers.

9
South Africa- SOAP
  • The State Old Age Grant provides social
    assistance to over 2 million South Africans.
  • Coverage- 70 percent of the total adult
    population.
  • Age of eligibility 60 for female and 65 for
    male.
  • Means tested program, although presently there is
    a debate on the need for the means test.
  • SOAP initially intended to provide a social
    safety net for aged poor, however, its benefits
    are distributed more broadly to all members in
    the household because the majority of households
    in South Africa live in multi-generational
    households.

10
South Africa- SOAP
  • The SOAP reduces the poverty gap for pensioners
    by 94 percent.
  • Poor households with pensioners are on average
    significantly less poor than households without
    pensioners. (Anne Case, 2000 and Committee of
    Inquiry into Social Security, 2002)

11
Social transfers- impact
12
Uganda- Pilot Cash Transfer Programme
  • The Govt is designing a Pilot Cash Transfer
    Scheme with support from DFID
  • Target 20 of the Ugandan population who are in
    chronic poverty
  • Initially, the scheme to cover 4 districts out of
    80 in the country
  • Program to cover 9,000 households in the lowest
    10 quintile and cost US 8.4 million for 3
    years.
  • Monthly cash transfer per HH ranges btn US 10
    15 for one person to maximum five person HH.

13
Brazil
  • Brazil has non-conditional old-age and disability
    cash transfers and conditional education and
    health grants (Bolsa Família).
  • Conditional grants alleviate short-term poverty
    but also provide incentives for human capital
    accumulation, thereby alleviating long-term
    poverty

14
Brazil - BPC
  • The objective of the program is to eradicate
    extreme poverty in targeted groups
  • no conditionalities
  • Monthly transfer, non-contributory
  • Targets extremely poor AND
  • - Over age of 65 or with severe disability
  • 2,5 million beneficiaries, cost 0,4 GDP

15
Brazil-Bolsa Família
  • Alleviate short term poverty by transfers and
    long term poverty by incentives to human capital
    accumulation
  • Conditional Education and health
  • Targeted at Poor - Differentiation of values
    according to number of school age children
  • Supplement incomes assumes families can have
    other sources of income
  • 11 million beneficiaries

16
Mexico- Oportunidades
  • The program is targeted to poor households
    through a mix of geographical and proxy means
    test targeting.
  • Is the main social assistance program of the
    Mexican government.
  • Covers over 5 million beneficiary households in
    extreme poverty in 2005 in both urban and rural
    areas

17
Mexico - oportunidades
  • provides currently four types of monetary grants
    (i) education grants (ii) health/nutrition
    grants (iii) energy grants and (iv) a
    pension or income support for the elderly
    (above 70 years of age)

18
Oportunidades-Impacts
  • Decreased morbidity in children, youth and adults
    (around 20)
  • Reduced stunting in young (2-6 months old) girls
    by 39.3 and boys by 19.4
  • 11 lower maternal mortality in beneficiary
    municipalities (15 in municipalities with more
    than 35 of the resident population in the
    program)
  • 2 decrease in infant mortality in beneficiary
    municipalities (6 in municipalities with more
    than 35 of resident population in the program)
  • Increases school enrollment for children who
    enter secondary school, with percentage increases
    in enrollment over 20 for girls and 10 for
    boys.

19
Oportunidades - Impacts
  • Headcount poverty rate declined by 17 in rural
    areas
  • Poverty gap and the severity of poverty measures
    declined by 36 and 46

20
Other means of social protection
  • Targeted employment creation programmes, e.g.
  • Public works programmes (although with limited
    effect)
  • Employment guarantee schemes (India)
  • Community-based social insurance (with possible
    government co-funding e.g. Community Health
    Insurance in Tanzania)
  • Micro-lending and micro-insurance

21
Other social protection
  • Welfare funds (e.g. tax/cess imposed on aggregate
    output of industry, and used for social
    protection of workers in the industry, and their
    dependants) (India)
  • State-created contributory-based social
    protection schemes for informal economy workers
    (possible government co-funding) (India)

22
Conclusion
  • Integrated approach that have objectives relating
    to alleviation of both short-term and long-term
    poverty
  • Development of human capacity
  • Administrative efficiency
  • Good governance
  • Multi-actor responsibility
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