Countries in Asia and the Pacific need to extend social protection coverage for all.
Doing so would help them build back better after the COVID-19 pandemic.
Social protection: a cornerstone of sustainable development
Social protection is first and foremost a human right
Anchored in human rights instruments, social protection schemes provide cash or in-kind support for people facing contingencies associated with having children, getting sick, acquiring a disability, losing a job or a breadwinner, or growing older (Figure 1). Social protection also provides support against shocks, such as natural disasters, economic crises and pandemics.
Social protection is society’s primary line of defence
The COVID-19 pandemic has seen many countries strengthening existing schemes and introducing ad hoc social protection measures. Yet well-resourced social protection systems built over time are far better equipped to respond to the unexpected.
Several overlapping global trends are at work
Along with persistent poverty and inequality, several trends, including population ageing, migration, urbanization, technological progress, disasters and climate change are compounding challenges facing the region. Social protection will be key to adapting to these disruptions.
Critical gaps in social protection in the region
Despite their rapid socioeconomic ascent, most countries in the region have weak social protection systems riddled with gaps
About half of the region’s population has no social protection coverage (Figure 2). Only a handful of countries have comprehensive social protection systems with relatively broad coverage. Most poverty-targeted schemes fail to reach the poorest families [Chapter 3]. Maternity, unemployment, sickness and disability benefits, mostly covered by contributory schemes, remain the preserve of workers with a formal job [Chapter 4].
While the majority of older persons receive a pension [Chapter 5] significant gaps remain and benefits are often insufficient to cover basic needs. The lack of access to affordable health care [Chapter 6] is leaving individuals without treatment and households vulnerable to falling back into poverty.
Why do gaps in the provision of social protection exist?
- High prevalence of informal employment in the region. Almost 70 per cent of all workers in the region are in informal employment, mostly outside the legal framework of contributory schemes.
- Poorly resourced and administrated systems. Excluding health, many countries in the region spend less than 2 per cent of GDP on social protection, compared with the global average of 11 per cent. While non-contributory social protection schemes have increased significantly in recent years, many schemes target only the poor, provide low benefits or are hampered by administration and fragmentation issues.
Expanding social protection carries immense benefits at an affordable cost
Investment in basic social protection would have an immediate impact on reducing poverty, inequality and purchasing power disparities. Simulations based on 13 developing countries in the Asia-Pacific region show that if governments offered universal coverage for child benefits, disability benefits and old-age pensions at a basic benefit level, poverty rates would significantly drop across the region (Figure 3).
This investment is within reach for most countries in the region. Independent cost estimations from ESCAP, ILO and ADB, are all within the range of 2 to 6.1 per cent of GDP.
Read more on the decisive impact of broadening social protection coverage on poverty, inequality and consumption of households. [Chapter 7].
Recommendations to achieve social protection for all
Embed social protection in national development agendas and allocate more resources. To secure the necessary resources, governments need to reprioritize existing expenditures and focus on increasing revenues, primarily by more strictly enforcing existing tax laws and expanding the tax base.
Build universal social protection systems. Achieving universality requires a mix of contributory and non-contributory benefit schemes. Universal systems along the life course are better able to nurture social protection as part of a national social contract between the State and its people.
Provide adequate social protection to women throughout their lives. Care credits can compensate women and men for time dedicated to caregiving. Public or subsidized childcare services should be improved to allow women’s confident participation in the labour force.
Expand social protection to informal workers. Mechanisms for participating in contributory social protection schemes should be adjusted to allow informal workers, often with modest and irregular incomes, to contribute.
Leave no one behind. Life-cycle social protection schemes provide a strong foundation for leaving no one behind, but often exclude migrants and forcibly displaced individuals and families, ethnic minorities and other groups. Including representatives from these groups on the boards of social security institutions is an established best practice.
Cover the “missing middle”. Coherent and complementary integration of contributory and non-contributory schemes is key to including the “missing middle” in social protection.
Improve efficiency and effectiveness by using emerging technologies. Linking social protection databases to national identification systems reduces the risks of fraud and duplication. ICT solutions, however, should be guided by privacy policies and guidelines to ensure inclusive responses and the protection of personal data.
Specific actions are required at the national level, depending on the level of coverage of existing schemes and the broader socioeconomic context (Figure 4):
- Low coverage countries should prioritize universal schemes covering health care, maternity, children, persons with disabilities and older persons. The coverage of contributory schemes should be extended gradually across the working-age population, including informal workers. Investment in building efficient social protection institutions is necessary to accompany this transition and ensure gender considerations are mainstreamed, rewarding caregiving and unlocking productivity.
- Low to medium coverage countries should aim to close the coverage gaps left by existing schemes and ensure adequate benefit levels. Where possible, this should involve the integration of contributory and non-contributory schemes, the mainstreaming of gender considerations into social protection and the extension of contributory schemes to informal workers, which supports formalization efforts.
- Medium to high coverage countries should identify and close remaining coverage gaps and ensure benefit levels are adequate. Closing gaps in old-age pension coverage and protecting women and vulnerable populations, such as migrant workers, persons with disabilities and ethnic minorities, must be prioritized. Adapting existing systems to an ageing society to ensure adequate care provision and financial sustainability must lie at the heart of this effort.