Dear friends,
The principle of providing social protection for the underprivileged is on the rise, but some countries have cut welfare benefits due to recession.
A fortnight ago, the World Health Assembly of health ministers agreed to the principle of universal health coverage. This is taken to mean that everyone should be able to enjoy basic health services.
Last week, a World Social Protection Report 2014-15 that examines recent social security trends in the world was launched by the International Labour Organization.
It looks at how people are covered by social security at all stages of life from birth, as children and mothers, as workers (how they are covered by schemes involving work injury, maternity leave, disability, etc.), as the unemployed (whether there are benefits) and older persons (for example, whether they are covered by pensions).
It is a great aspiration for a society to guarantee or at least pledge that everyone has access to the basic elements needed for a decent life.
But is it feasible to implement such a high goal? It is often argued that countries that spend a lot to provide welfare and benefits for the lower-income groups may face unsustainable budget deficits.
The counter-argument is that governments can raise revenues in various ways, including different types of taxes, and that social security should be a high priority in public spending as it will boost the economy’s demand and social stability.
It was a kind of received wisdom that rich countries can afford social protection but poor countries just don’t have the funds.
Brazils recent experience showed that a middle-income country could channel government funds to the poor so there would be zero hunger, a pledge the former president Lula da Silva made to his people.
Brazil has also argued that the funds provided to the poor have boosted effective demand and contributed to economic growth. Thus, social redistribution not only alleviates poverty and hunger but also reduces inequality and aids growth.
An increasing number of developing countries, including Malaysia, have recently developed their own forms of income support for poor families. This has proven popular and is welcomed by the beneficiaries.
Lessons are still being sought on making the financing of these and other welfare schemes sustainable.
Another major issue is the effect of the current recessionary situation on social security. The ILO report devotes a section to this, raising concerns that austerity measures are affecting social security and creating new poverty, not just in Europe but also in developing countries.
The report finds that most people are without adequate social protection at a time when it is most needed. Only 27% of the world population enjoy access to comprehensive social security.
Social security and healthcare for children, working-age people who face unemployment or injury and older persons is a universal human right, but the promise of universal social protection remains unfulfilled for the large majority, says the ILO.
In the first phase of the global financial crisis (2008-09), at least 48 high and middle-income countries put in place stimulus packages totalling US$2.4 trillion (RM7.7 trillion) that devoted roughly a quarter to social protection measures.
This helped the economies to regain balance as well as protect the unemployed and vulnerable from any economic disaster in these countries.
But in the second phase from 2010 onwards, many governments reversed course and embarked prematurely on fiscal consolidation.
As many as 122 governments are contracting public expenditures in 2014, of which 82 are developing countries, said Isabel Ortiz of the ILO.
The austerity measures include reforms to the pension, health and welfare systems that often reduce their coverage or funding, eliminate subsidies and cuts the number of health and social workers.
High-income countries are contracting their social protection. In Europe, this has contributed to increases in poverty, now affecting 123 million people or 24% of the population.
In contrast, many middle-income countries are expanding their social protection systems, supporting household incomes.
China has sharply increased minimum wages and is close to achieving universal pension coverage, while Brazil has further increased the rate of social protection coverage and minimum wages since 2009.
Due to their low income, the poorer countries have lower social security levels. However, some countries, for example Mozambique, have also extended social protection, yet often through temporary safety nets with very low benefit levels.
At the global level, governments allocate only 0.4% of GDP to child and family benefits. This should be scaled up since many of the 18,000 child deaths a day could be averted through social protection.
Expenditures for social protection for working-age people vary widely worldwide. Only 12% of unemployed workers receive unemployment benefits, ranging from 64% in Western Europe to less than 3% in the Middle East and Africa.
On pensions, 49% of all people over pensionable age worldwide do not receive a pension, while the pension levels are too low for many recipients to avoid poverty.
The good news is that social protection is a mandate of the ILO and other UN agencies. It is expected to be included in the Sustainable Development Goals, which are now being negotiated by the UN in New York. If the principle of social protection is increasingly adopted, the discussion will focus more on how to implement this, with all the problems and options to be considered.
Read the full article at: http://www.thestar.com.my/Opinion/Columnists/Global-Trends/Profile/Articles/2014/06/09/Lending-a-hand-to-the-helpless/
Best regards,
Martin Khor
Executive Director
The South Centre
www.southcentre.int
The principle of providing social protection for the underprivileged is on the rise, but some countries have cut welfare benefits due to recession.
A fortnight ago, the World Health Assembly of health ministers agreed to the principle of universal health coverage. This is taken to mean that everyone should be able to enjoy basic health services.
Last week, a World Social Protection Report 2014-15 that examines recent social security trends in the world was launched by the International Labour Organization.
It looks at how people are covered by social security at all stages of life from birth, as children and mothers, as workers (how they are covered by schemes involving work injury, maternity leave, disability, etc.), as the unemployed (whether there are benefits) and older persons (for example, whether they are covered by pensions).
It is a great aspiration for a society to guarantee or at least pledge that everyone has access to the basic elements needed for a decent life.
But is it feasible to implement such a high goal? It is often argued that countries that spend a lot to provide welfare and benefits for the lower-income groups may face unsustainable budget deficits.
The counter-argument is that governments can raise revenues in various ways, including different types of taxes, and that social security should be a high priority in public spending as it will boost the economy’s demand and social stability.
It was a kind of received wisdom that rich countries can afford social protection but poor countries just don’t have the funds.
Brazils recent experience showed that a middle-income country could channel government funds to the poor so there would be zero hunger, a pledge the former president Lula da Silva made to his people.
Brazil has also argued that the funds provided to the poor have boosted effective demand and contributed to economic growth. Thus, social redistribution not only alleviates poverty and hunger but also reduces inequality and aids growth.
An increasing number of developing countries, including Malaysia, have recently developed their own forms of income support for poor families. This has proven popular and is welcomed by the beneficiaries.
Lessons are still being sought on making the financing of these and other welfare schemes sustainable.
Another major issue is the effect of the current recessionary situation on social security. The ILO report devotes a section to this, raising concerns that austerity measures are affecting social security and creating new poverty, not just in Europe but also in developing countries.
The report finds that most people are without adequate social protection at a time when it is most needed. Only 27% of the world population enjoy access to comprehensive social security.
Social security and healthcare for children, working-age people who face unemployment or injury and older persons is a universal human right, but the promise of universal social protection remains unfulfilled for the large majority, says the ILO.
In the first phase of the global financial crisis (2008-09), at least 48 high and middle-income countries put in place stimulus packages totalling US$2.4 trillion (RM7.7 trillion) that devoted roughly a quarter to social protection measures.
This helped the economies to regain balance as well as protect the unemployed and vulnerable from any economic disaster in these countries.
But in the second phase from 2010 onwards, many governments reversed course and embarked prematurely on fiscal consolidation.
As many as 122 governments are contracting public expenditures in 2014, of which 82 are developing countries, said Isabel Ortiz of the ILO.
The austerity measures include reforms to the pension, health and welfare systems that often reduce their coverage or funding, eliminate subsidies and cuts the number of health and social workers.
High-income countries are contracting their social protection. In Europe, this has contributed to increases in poverty, now affecting 123 million people or 24% of the population.
In contrast, many middle-income countries are expanding their social protection systems, supporting household incomes.
China has sharply increased minimum wages and is close to achieving universal pension coverage, while Brazil has further increased the rate of social protection coverage and minimum wages since 2009.
Due to their low income, the poorer countries have lower social security levels. However, some countries, for example Mozambique, have also extended social protection, yet often through temporary safety nets with very low benefit levels.
At the global level, governments allocate only 0.4% of GDP to child and family benefits. This should be scaled up since many of the 18,000 child deaths a day could be averted through social protection.
Expenditures for social protection for working-age people vary widely worldwide. Only 12% of unemployed workers receive unemployment benefits, ranging from 64% in Western Europe to less than 3% in the Middle East and Africa.
On pensions, 49% of all people over pensionable age worldwide do not receive a pension, while the pension levels are too low for many recipients to avoid poverty.
The good news is that social protection is a mandate of the ILO and other UN agencies. It is expected to be included in the Sustainable Development Goals, which are now being negotiated by the UN in New York. If the principle of social protection is increasingly adopted, the discussion will focus more on how to implement this, with all the problems and options to be considered.
Read the full article at: http://www.thestar.com.my/Opinion/Columnists/Global-Trends/Profile/Articles/2014/06/09/Lending-a-hand-to-the-helpless/
Best regards,
Martin Khor
Executive Director
The South Centre
www.southcentre.int
