The Asian Development Bank (ADB) has just released an updated version of its unique Social Protection Index (SPI). The study, which analyzes government programs providing social insurance, social assistance, and labor market support in 35 countries across Asia and the Pacific, shows varied spending patterns across income groups and subregions.
A few countries - Japan, the Republic of Korea, Mongolia, and Uzbekistan - have Social Protection Indexes that are higher than 0.200, meaning that they are already investing 8% of their gross domestic product (GDP) on social protection programs. However, spending in most middle-income countries, including Armenia, Fiji, India, Indonesia, Pakistan, the Philippines, and Samoa, remains below 3%
The SPI study also notes that because social insurance tends to dominate government social protection spending, benefits accrue disproportionately to men and non-poor.
Poor and disadvantaged persons, particularly those working in the informal sector, benefit less because they lack access to social insurance. They are instead targeted by social assistance programs that in many countries are fragmented and provide inadequate transfers.
Relatively little is being spent on labor market programs like cash-for-work and skills development. This needs to be addressed amidst rising youth unemployment, critical skills
gaps, and the disproportionate number of women who are unable to enter the formal labor market. Areas for government attention include employment guarantee
schemes to construct or rebuild basic infrastructure, skills development, and technical and vocational education and training.
Countries at various stages of development need to set their own targets, taking into account available public resources. However, governments need to accelerate the review and reform of pension schemes in view of the region’s huge informal sector and rapid aging. Preventive social protection programs such as micro-insurance schemes to cushion the impact of variable weather patterns and natural disasters should also be explored, the study says.
Expanding social protection coverage requires mobilization of additional public revenue which can be secured by broadening the tax base, improving tax collection, and improving public expenditure management. Governments should also encourage private firms to contribute more to social insurance programs. After many years of high growth, the Asia and Pacific region is in an excellent position to invest in better social protection systems that are attuned to the needs of its people.
The Economist has drawn upon the SPI's rich data and analysis in its latest issue:
Bart W. Édes,
Director Poverty Reduction, Gender and SocDev Division
Regional and Sustainable Development Department
Asian Development Bank