Social Protection: Costing & Financing SP targetsSPIAC-BNew York, 3 February 2015
Anne Drouin, Social Protection Department International Labour Organization
2 fundamental questions:What matters when assessing the cost of SP Targets and monitoring their progress?
1)Towards Universal Coverage – No one is left outWhat are the needs for SP ?
Is everyone covered in case of loss of income and insufficient means?
Does everyone have access to health care ?
2)Towards Adequate Social protection – Is SP sufficient to meet people’s needs ?
Taking into account need to scale up resources to pay for benefits of all kinds and to invest into developing the national and local SP delivery system - Progressive or Immediate realization? 2
Building Social Security Systemsfor a Century
Developing Countries Increasing Social Protection
Selected Countries, 2011
Increase in public social protection expenditure ratios (%GDP), selected middle-income countries, 2000-latest year
Source: ILO World Social Protection Report 2014-15
.
How older poor spend pension cash
transfer
Child and family benefits Argentina, China, Mongolia, Mozambique, Nepal, Niger, Senegal, South Africa
Cash transfers with human development focus
Argentina, Bangladesh, Brazil, Colombia, Ecuador, Ghana, Honduras, Indonesia, Jamaica, Kenya, Malawi, Mexico, Mongolia, Nicaragua, Philippines, Tanzania
Household minimum support income
Chile, China, Ghana, Mozambique, Rwanda, Uganda, Zambia
Public employment programmes
Argentina, Benin, Cameroon, Ethiopia, Ghana, India, Indonesia, Malawi, Niger, Rwanda, South Africa, Tanzania
Maternity protection Argentina, Bangladesh, Bolivia, Ghana, India, Indonesia, Jordan, South Africa
Social pensions Argentina, Bangladesh, Bolivia, Botswana, Brazil, Cabo Verde, Chile, China, Costa Rica, India, Kyrgyzstan, Lesotho, Mauritius, Moldova, Namibia, Nepal, Panama, Peru, Samoa, Sierra Leone, South Africa, Tajikistan, Tanzania, Thailand, Vietnam
Health coverage expanded Argentina, Brazil, Burundi, Cambodia, Chile, China, Colombia, Ghana, Lao PDR, Indonesia, Mexico, Morocco, Thailand, Rwanda
Unemployment protection Jordan, Saudi Arabia, South Africa, Thailand, Vietnam
Expansion of Cash Transfers in Middle and Low Income Countries
Universal Social Protection: Mixed approachesCombining Non-contributory SP Floors and
Contributory Systems
F How to better engage with other government ministries beyond Ministry of Labour?
100 Countries Reducing Universal Food and Fuel Subsidiessometimes targeted safety nets to the poor as compensation
-- insufficient, punishing “middle classes” Fuel Subsidies in %GDP selected countries, 2012 or latest
- Higher food and transport costs: Less household income- Higher energy costs – Negative impact on economic activity, employment, domestic demand
Social protection is an investment in people
Source: ILO, World Social Protection Report 2014-15
Is Universal Social Protection Affordable in Developing Countries?
Source: ILO 2014, Geneva
Cost of universal pension coverage65+, National poverty line (% of GDP)
FINANCING SOCIAL PROTECTIONFiscal policy space options exist even in the poorest countries
1) Increasing social insurance coverage for self-financed contributory benefits for those who can afford their social protection
2) Re-allocating public expenditures (eg subsidies) 3) Better taxation systems increasing central tax revenues 4) Increased aid and central budget transfers to support national
priorities for sustainable state capacities … especially in fragile states requiring kicking off SP institutions
5) Fighting illicit financial flows6) Tapping into fiscal and foreign exchange reserves7) Debt restructuring to allow investment into SP bringing back
economic and fiscal returns 8) Adopting a more accommodative macroeconomic framework
Fiscal Space Strategies for Social Protection: Country Examples
Source: ILO, World Social Protection Report 2014-15
ILO Social Protection Floor Cost Calculator
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Welcome to the Social Protection Floor Cost Calculator!
Selection of countries
Selection of SPF Income Security & In-kind Benefits
o Children
o Youth Unemployed - PWP’s
o Women & Maternity
o HIV/AIDS victims
o Disabled persons
o Elderly
Coverage Definition Universal Targeted
Benefit Adequacy Definition National Poverty Line Other ref.
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Old Age Children Disabled Pregnant Orphans0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
SPF Benefits for Bangladesh (% of GDP)
Maternity
ILO Social Protection Floor Cost CalculatorAn example
Thank you