SOCIAL PROTECTION UNDER DEMOGRAPHIC & FINANCIAL PRESSURE: CHALLENGING NEW RISKS

1. SOCIAL PROTECTION UNDER DEMOGRAPHIC & FINANCIAL PRESSURE:CHALLENGING NEW RISKS 33rd Global Conference on Social Welfare 2nd July 2008 TOURS, FRANCE.

2. Human Rights to Social Assistance • Article 25 of the Universal Declaration of Human Rights • Everyone has a right to a standard of living adequate for the health and well being of himself and of his family • Motherhood and childhood are entitled to special care and assistance.

3. ESCAP Agenda for Action on Social Development (1995) • Items of the Agenda included overall policy framework will accord priority to social protection • Broaden Coverage of formal social security systems especially for informal sector workers • Provide people with disabilities with education, health care, training, employment and other services • Establish social security support services to bring elderly people into economic and social mainstream • Provide fiscal and other incentives in support of families

4. TRENDS AFFECTING SOCIAL SECURITY PROTECTION • Globalization • Structural Changes: Economic Development/ Human Development • Demographic Trends: Individual and Society Changes • i) A large youth population (In Developing Countries) • ii) Rising Literacy Levels • iii) Fertility Rates declining rapidly in certain countries • iv) Ageing populations with women living longer: Increasing life expectancy • Urbanization Trends: Breakdown of family structures and new urban pressures • Migration Trends: Inter regional and outside the region • Changing Family Structures: Extended Family to Nucleus: Child care handed to old parents

5. Challenging demographic, social and economic trends • Urbanization and a move away from agriculture • Industrialization where the traditional systems experience downsizing, process change and varied marketing challenges • Migration where the reduction of agriculture leads to younger and more educated workers moving to centres of economic development creating new pressures and social consequences in the villages they leave and the cities they move to; and • Changing family structures with the erosion of the family support system established in agricultural societies and modern changing attitudes away from sharing and caring.

6. DEMOGRAPHIC • Aging of population • Also known as demographic aging, and population aging • A summary term for shifts in the age distribution (i.e., age structure) of a population toward older ages • A direct consequence of the ongoing global fertility transition (decline) • and of mortality decline at older ages • population aging the most prominent global demographic trends of the 21st century.

7. Population Aging • Population aging has many important socio-economic and health consequences, including the increase in the old-age dependency ratio.  • It presents challenges for public health (concerns over possible inadequate financing of Medicare and related programs) • As well as for economic development (shrinking and aging of labor force, possibility of social security funds not being able to meet future liabilities).

8. Measures of Aging • The aging of population is often measured by increases in the percentage of elderly people of retirement ages • The definition of retirement ages may vary but a typical cutoff is 65 years, and nowadays a society is considered relatively old when the fraction of the population aged 65 and over exceeds 8-10% • A related measure of population aging is the elderly dependency ratio (EDR): the number of individuals of retirement ages compared to the number of those of working ages. For convenience, working ages may be assumed to start at age 15,

9. Measures used for Aging • Also known as old-age dependency ratio, age-dependency ratio or elderly dependency burden • Another indicator of the age structure is the aging index (sometimes referred to as the elder-child ratio), defined as the number of people aged 65 and over per 100 youths under age 15.

10. FEATURES of Aging Populations • The most rapid growth occurs in the oldest age groups – the oldest-old (80+ or 85+ years) • Population aging is particularly rapid among women • Another consequence of lower female mortality is the fact that almost half of older women (45%) in 2000 were widows, thus living without spousal support. • Population aging also causes changes in living arrangements • Since older persons have usually lower income and a higher proportion of them are living below the poverty line, population aging is associated with poverty, particularly in developing countries.

11. Dynamics of Population Aging in the Modern World Observed and Forecasted Percentages of the Elderly (65+ years) in Selected Areas, Regions, and Countries of the World: 1950, 2000 and 2050. ( Sources: UN 2001) Source: United Nations 2001.

12. ASEAN DEMOGRAPHICS

13. New Risks • Dramatic increase in the older retired population relative to the shrinking population of working ages • Creates social and political pressures on social support systems • Population aging is also a great challenge for the health care systems. As nations age, the prevalence of disability, frailty, and chronic diseases (Alzheimer’s disease, cancer, cardiovascular and cerebrovascular diseases, etc.) is expected to increase dramatically

14. Challenges of Globalization to Developing Countries • First, for cushioning the burden of restructuring • Second, for increasing legitimacy of reforms • Third, for enabling risk taking by individuals and firms by providing a floor level income in the case of losses

15. Level of Protection • Differs in all Countries • Extent of Protection • i) based on the state of economic development, • ii) the nature of the government, • iii) the political ideology, administrative capacity • iv) other historical factors. • The extent of the coverage of the population • i) is also dependant on the age of the scheme • ii) the administrative commitment and efficiency of the social security institution.

16. Features of present protection • Fragmented administration • In infancy state in Developing countries • Providing limited coverage • The focus is mainly on old age protection; • Protection during the working life of the employer is provided through labour legislation • The civil service and armed forces enjoy special privileges that are not available to private sector employees or the population in general • The administrative inefficiency in providing the protection • Low age of retirement in many countries

17. Challenges: Coverage • Coverage is generally low • Formal sector employment needs to be increased with the law being clear about who is covered. • The formal sector coverage can also be expanded through improved administration and compliance. • The needs of the informal sector workers should be addressed. • Equality of treatment of migrant workers

18. Adequacy • Replacement ratios: old age pension to sustain standard of living • A safety net and strengthening the first pillar social assistance • Dependant on rate of savings, wage definition, period of contribution, rate of return, lower pre retirement leakages

19. First Tier Protection • Considered as the Social Assistance or Welfare Pillar • Universal and available to all • Financed from the National Budget: World Social Summit 20:20 suggested 20% of budget. • Individual does not have to contribute • Targeting with some means tests • Available to the vulnerable groups; elderly, disabled, orphans, widows, victims of war, mentally disabled, single parent household… • Influenced by the effectiveness of other forms of social protection

20. Design of Social Assistance Program • Informal Family Support • Flexible to address multiple needs • Meet the dynamic demands of the vulnerable groups • Fundamentally provide access to the basic services necessary • Designed to address short term emergencies that occur rapidly and affect large proportions of the population • Providing long term social assistance

22. The Second Pillar • The Social Insurance Pillar • Social Security Protection as defined by the ILO and in the Convention • Nine Contingencies for coverage: • Short Term- Maternity, Sickness, Employment injury and Occupational Diseases, Unemployment, Family Benefits • Long Term: Invalidity, Survivors, Old Age • Mainly in the formal employed sector • Employer liability through Labour Laws • Provident Funds • Low coverage/ Inadequate levels of Benefits

23. Third Pillar • Private Insurance • Complementing or supplementing the other pillars • Individual contract/ Risk rated • Payments by Individuals • Flexible in design • Affordability by the individual • Tax savings

24. Recommendations • Coordinated approach to social protection • Development of the First Tier • Improving the schemes and coverage of the second pillar • Extending coverage: Informal Sector employees • Develop research capabilities • Publicity of social protection principles • Development Plans also focus on social protection.

25. THANK YOU SOCIAL PROTECTION IS YOUR NATIONAL PRIDE LET’S GET IT RIGHT