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

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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


1
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

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.

6
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

7
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

8
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.

14
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

15
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

18
Point Four Financing strategies Lack of fiscal
space? The good news part I
19
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…
21
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 ?

22
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

23
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.

24
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
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