The ILO Global Campaign to extend Social Security to all - PowerPoint PPT Presentation


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The ILO Global Campaign to extend Social Security to all


One: Social security is an economic necessity. Two: Social security is fiscally affordable ... by about 12-points, similar order of magnitude in Brazil ... – PowerPoint PPT presentation

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Title: The ILO Global Campaign to extend Social Security to all

UNECA consultative meeting on Social Protection
in Africa Addis 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

Structure of the presentation
  • One Social security is an economic
  • Two Social security is fiscally
  • Three Expected social outcomes
  • Four Financing strategies

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

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
  • (France 1945)

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.

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, unemployability…throu
    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

Two Social security is affordable A 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

Two Four… cost of universal pensions
Two… a basic social protection package is
affordable Total cost of all basic benefit
package components
Point Two… a basic social protection package is
affordable share of total cost that can be
covered by domestic resources
A closer look at Tanzania…
How much it would cost? A closer look at Zambia
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.

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

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

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

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

The Nepal case…
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
  • International financing of health care goods and
  • People-to-People Partnerships Global Social
  • A new Fund finance the start-up of basic social
    security schemes ?

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
  • 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
  • Determine the capacity requirements

The way Ahead for Africa 11th 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.

  • 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