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Ursula Kulke

Beyond International Security: Social Security and Social Welfare in the Middle East and North Africa - What are the research and policy choices?.

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Ursula Kulke

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  1. Beyond International Security: Social Security and Social Welfare in the Middle East and North Africa - What are the research and policy choices? “Extending social protection: the way towards social justice - ILO policy in the MENA countries”Organised by the Middle East Social Policy Network (MENA) at the University of Bath Institute for Policy ResearchTuesday 3 December 2013 Ursula Kulke Senior Regional Social Security Specialist, ILO Regional Office for Arab States, Beirut

  2. Social protection: An instrument for poverty reduction and social cohesion • Social protection is a human right( Articles 22, 25,26,27 of the Universal Declaration of Human Rights) • We know that from more than one century of history of the modern welfare state that social transfers and services are powerful policy instruments to combat poverty, insecurity and inequality and ...to achieve the MDGs • Social protection is an indispensable component of the policy mixto create growth, and which includes education, employability enhancing policies, macro policies creating jobs etc. • Social protection is an economic necessity to unblock the full economic potential of a country, only people that are healthy, well educated and well nourished can be productive • There is now widespread acceptance that social protection/security serve as social and economic stabilisers in times of crisis • Social protection makes growth equitable, builds social cohesion and makes growth more sustainable

  3. Social social protection: • Regional overview • Few Arab states have developed coherent national social security policies. • Most of the Arab countries have social insurance systems which only provide long-term benefits (old age, disability and survivors’ pensions and employment injury benefits). • Only few Arab countries offer short-term benefits: Bahrain and Jordan are the only countries which have unemployment benefits in place and Jordan is the only one which has a maternity insurance scheme in place. • Most countries of the region lack protection against catastrophic health expenditure, a critical factor contributing to vulnerability and poverty. • None of the countries in the region has a rights-based social assistance scheme.

  4. Social security programmes: Regional overview SI = Social Insurance; OI = Other Ins. Arrangement (Prov. Fund, etc.); SSA = statutory social assistance (rights- based); SN = Safety Net Programme (not rights-based) Source: ISSA Observatory Country profiles

  5. Social security programmes: Regional overview SI = Social Insurance; OI = Other Ins. Arrangement (Prov. Fund, etc.); SSA = statutory social assistance (rights- based); SN = Safety Net Programme (not rights-based), TF = Tax financed Source: ISSA Observatory Country profiles

  6. Social security deficits: Coverage of contributory schemes There are also considerable coverage deficits in the region. While in most countries, existing schemes cover workers in the public sector and workers in the private sector on regular contracts, other workers, such as temporary, agricultural, domestic, informal and migrant workers, and to a large extent self-employed workers are excluded from legal coverage. Due to low levels of formal employment participation of women, their social insurance coverage is even lower.

  7. Social security deficits: Coverage of pension schemes

  8. Social security deficits:Universal subsidies at the expense of more effective programs Source: World Bank 2012, Inclusion and Resilience The average MENA country spends 5.7 percent of GDP on food and fuel subsidies, as opposed to 1.3 percent of GDP on transfers in the average benchmark country Source: World Bank 2012, Inclusion and Resilience

  9. Social security deficits: Universal subsidies are inefficient and pro-rich Source: World Bank 2012, Inclusion and Resilience Universal subsidies and in particular, fuel subsidies have staggering leakages to the non-poor

  10. The Social Protection Floor (SPF)–Initiative In April 2009, the UN Chief Executives Board (UN CEB) agreed on nine joint initiativesto confront the crisis, among them the Social Protection Floor Initiative The SPF Initiative aims at joint global and local UN action lead by ILO+WHO to promote social transfers and access to essential services for the poor and vulnerable The SPF is a global and coherent social policy concept that promotes nationally defined strategies for the provision of a minimum level of income security and access to essential services for all For such purposes, the SPF promotes a holistic and coherent vision of national social protection systems, rights-based, as a key component of national development strategies

  11. The Social Protection Floor: four nationally-defined guarantees Transfers in cash or in kind: Transfers in cash and in kind should guarantee geographical and financial access to essential services such as water and sanitation, education, etc.

  12. ILO’s new social security paradigm:The two dimensional strategy • Family Benefit • Sickness Cash Benefit • Medical Care Benefit • Unemployment Benefit • Maternity Benefit • Survivors’ Benefit • Invalidity Benefit • Old-age Benefit • Employment Injury Benefit Vertical dimension:progressively ensuring higher levels of protection guided by ILO Convention No.102 and higher-level standards Horizontal dimension:Guaranteeing access to essential health care and minimum income security (Social Protection Floors Recommendation No. 202) • Universal Health Care • Child benefit • Assistance for • Unemployed and Poor • Universal Old-Age and • Disability Pension

  13. Principles for the implementation of the two-dimensional strategy

  14. The Social Protection Floor can be achieved through different systems national choice Nationally guaranteed outcomes

  15. The Social Protection Floor is affordable: Cost of basic transfers In percent of GDP

  16. Financingstrategies • Domestic resource mobilisation • Enhance the efficiency and effectivenes of tax collection • Reallocate expenditure – reallocate existing public spending • Broaden tax baseI and increase overall tax rates • Reduce tax evasion • Introduce self-financing social insurance systems • International resources (transitional financing) • Project financing to build national delivery capacity • International financing of health care goods and services • People-to-People Partnerships: Global Social Trust

  17. Successful SPF Experiences Argentina • Asignación Universal porHijo (AUH) (Universal Child Allowance) • Coverage: 85% of Argentinian girls and boys • Impact: Reduced poverty (-22%) and extreme poverty (-42%) India • Mahatma Gandhi National Rural Employment Guarantee Scheme (Wage employment programme) • Coverage: 52.5 million households (50% of womenparticipants) • Impact: Increase in minimum wages for agricultural workers, decreased out-migration from villages, women’s empowerment • Costs: 1.5%of GDP (2008/09) Thailand • Universal Coverage Scheme (Universal health care) • Coverage: 80% of the population • Impact: 88,000 households (2008) were prevented from falling below poverty line

  18. Successful SPF Experiences Brazil • BolsaFamilia(Conditional cash transfer) • Coverage: 26% of the population • Impact: Reduced the poverty gap by 12% between 2001 and 2005 • Costs: 0.3 % of GDP (2008/09) • The Rural Social Insurance Programme(Non-contributory pension for the rural poor) • Coverage: 80% of agricultural workers – 66% of rural population • Impact: Reduction of 4 million poor people • Costs: 1.5% of GDP (2008/09) South Africa • Child Support Grant (Means-tested non-contributory cash transfer) • Coverage: 10 million children • Impact:Reduced the poverty gap by 28.3% • Costs: 0.7 % of GDP (2008/09)

  19. ILO’s Recommendations – development of coherent social security systems • Coherent and comprehensive social security systems, embedded in wider economic and social policies, with the double objective of: • Developing sustainable and comprehensive contributory social security systems for workers in the formal economy (vertical dimension) • Establishing national social protection floors for those who are not covered by the formal social security system, providing minimum income security and access to essential medical care (horizontal dimension) • And applying the following principles: • Universal and progressive extension of social security coverage • Solidarity between rich and poor and generations • Benefits as an legal entitlement and right • Collective and actuarial fairness of contributions and benefits levels • Sound financing of social security schemes • Responsibility for governance and tripartite administration

  20. ILO’s Recommendations – development of coherent social security systems What to do: • Creating the necessary fiscal space (SPF financed by domestic resources) • Political will • Cost-control mechanism • Effective institutions • Maximize administrative capacity to deliver benefits efficiently and to minimize waste and misuse of resources • Sound implementation structure and good governance: • Process for efficient delivery, monitoring and evaluation and proper financial management • Progressive formalization of the economy • High levels of productive employment

  21. Comprehensive social security with a social protection floor - political and institutional stability, and social cohesion • Comprehensive social security systems represent important social tools that can temper exclusion and latent or simmering unrest. • Thereby they can contribute to creating more cohesive and inclusive societies. • National social protection floors go beyond providing basic social relief: • They also fosters forms of democratization that build citizenship, and • Break down barriers that impede fuller participation by the poor in political processes that affect their lives.

  22. THANK YOU

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