Valerie Schmitt, Jo Hyung Kyu, Celine Felix 14 September 2010 Extending Social security in East and South-East Asia: the 2 dimensions ... Valerie Schmitt, Jo Hyung Kyu, Celine Felix 14 September 2010 Decent Work for All ASIAN DECENT WORK DECADE 2006-2015

Structure Social security, social protection, social protection floor ILO promotes the right to social security The problem: a major coverage gap How to extend social security? What is the situation and what do we do at country and regional level?

Social security Social protection A series of public measures ; statutory / compulsory nature A human right (Universal Declaration of HR, article 22) Schemes financed through contributions and taxes: Statutory contributory social insurance Targeted tax-financed social assistance Universal coverage schemes Delivery: State or parastatal institutions; private entities with public mandate Schemes financed through contributions or donations: Certain types of private insurance Certain types of micro-insurance Donor-funded safety nets … It also includes private measures or non statutory regimes, provided that the contributions to these schemes are not wholly determined by market forces (i.e., redistribution) ; voluntary nature Delivery: Private sector, churches, NGOs … Protection against financial consequences of nine contingencies : -Sickness, maternity, employment injury, unemployment, invalidity, old age, death of the breadwinner + Access to health care + Family benefits NB: « assurance de personnes » ; NOT insurance of goods / means of production … The ILO does not include Access to Education World Labour report 2000

Social security Social protection Social protection Social security ILO SECSOC used to work here Voluntary private insurance (ex: pension fund) Voluntary private insurance (ex: Micro-Health Ins. Assistance from private donors, charity … Social protection Compulsory & contributory social insurance Social assistance Universal access to health care Partial contributory schemes Social security Civil servants Armed forces Private sector employees With STEP it extended its work to strategies for Informal economy and the linkages between statutory and non statutory schemes Informal economy Poor and near poor

Types of Social security schemes Contributory schemes : The contributions made by beneficiaries (& employer) determine entitlement to benefits -Statutory social insurance scheme National provident funds (lump sum to beneficiaries when particular contingencies occur, typically old age, invalidity or death) Partially contributory schemes (subsidized contributions) Universal schemes for all residents (ex: guarantee access to health care) or for specific categories of the population (ex: minimum income to the elderly above a certain age or children below a certain age). Generally tax-financed, but may require a co-payment (ex: user fees for health care) World Labour report 2000 Social assistance (means tested) schemes (ex: Conditional cash transfers provide cash to families subject to the condition that they fulfil specific “behavioural” requirements; Employment guarantee schemes ensure access to a certain number of workdays a year to poor households …)

Social protection floor A set of basic social rights, services and facilities that each member of society should enjoy A SPF should consist of: Availability of essential services: Housing, WATSAN, Education/skills, Health care supply, Food/Nutrition, … Accessibility of these services through basic transfers in cash or in kind: -Subsidized health insurance / health cards, -Scholarships & school buses, -Minimum income support to families (family/child benefits), the working poor (cash transfers and PWPs) and the elderly (minimum pensions) … Notion of availability and accessibility – both work hand in hand

Social protection floor Social security Social protection Social protection floor RIGTH TO SS and SPF Social protection Compulsory & contributory social insurance Social assistance Universal access to health care Partial contributory schemes Social security Civil servants Armed forces Voluntary private insurance (ex: pension fund) Private sector employees Informal economy Voluntary private insurance (ex: Micro-Health Ins. Availability of essential services: Housing, WATSAN, Education/skills, Health care supply, Food/Nutrition, … Basic transfers in cash or in kind: SP Floor Assistance from private donors, charity … Poor and near poor

Structure Social security, social protection, social protection floor ILO promotes the right to social security The problem: a major coverage gap How to extend social security? What is the situation and what do we do at country and regional level?

ILO promotes the right to SS Social security is a human right Universal Declaration of Human Rights, and the International, article 22 Covenant on Economic, Social and Cultural Rights (ICESCR), article 9 Achieving the right to social security demands the establishment of non-contributory (for example, tax-financed) schemes, or other social assistance measures to provide support to those individuals and groups who are unable to make sufficient contributions for their own protection Many other arguments… social and economic stabilizer; productivity at enterprise level; impact of redistribution on consumption & domestic markets; etc. … and a basic set of social protection is affordable!  political decision

ILO promotes the right to SS 1919 Preamble of ILO Constitution Realization of the right to social security part of ILO mandate 1944 Declaration of Philadelphia Extension of social security part of ILO mandate 1952 C102, minimum standards 2001 89th ILC Social security, a new consensus 2003 91th ILC Global campaign for the extension of social security for all 2008 ILO Declaration on social Justice for a fair globalization 96th ILC 2009 Adoption of the Global jobs pact, which includes the Social protection floor “countries that do not yet have extensive social security are requested to build adequate social protection for all, drawing on a basic social protection floor” 97th ILC Part of UN CEB 9 joint initiatives Realization of the right to social security. Is part of ILO’s mandate enshrined in its original (1919) Constitution In 1944, the mandate of the ILO was widened by the Declaration of Philadelphia, which was the first international legal instrument to stipulate the right to social security as a right belonging to all and can be seen, moreover, as the first moment in history that the world community declared its commitment to the extension of social security to all. General discussion on social security at 89th ILC in 2001 « Social security: a new consensus » Launching of a Global Campaign for the extension of social security for all, in 2003 A contemporary vision of ILO’s mandate enshrined in the ILO Declaration on Social Justice for a Fair Globalization (adopted by the ILC 2008) In April 2009 the UN Chief Executives Board (CEB) have agreed on nine joint initiatives to confront the crisis, accelerate recovery and pave the way for a fairer and more sustainable globalization One of them: the Social Protection Floor initiative 10

ILO promotes the right to SS Social security conventions and recommendations are the main tools through which the ILO promotes right to social security « Flagship Convention » Social Security (Minimum Standards) Convention, 1952 (No. 102) Defines nine areas of social security: medical care, sickness, unemployment, old age, employment injury, maternity, invalidity, survivors, and benefits for families with children Sets minimum standards for each of these branches Other up-to-date conventions Employment Injury Benefits Convention, 1964 (No. 121); Invalidity, Old-Age and Survivors’ Benefits Convention, 1967 (No. 128); Medical Care and Sickness Benefits Convention, 1969 (No. 130); Employment Promotion and Protection against Unemployment Convention,1988 (No. 168); and Maternity Protection Convention, 2000 (No. 183). In addition, the Equality of Treatment (Social Security) Convention, 1962 (No. 118), makes provision for the equality of treatment between national and non-national workers with regard to coverage by the branches of social security Up to date conventions: Equality of Treatment (Social Security) Convention, 1962 (No. 118) Employment Injury Benefits Convention, 1964 (No. 121) Invalidity, Old-Age and Survivors' Benefits Convention, 1967 (No. 128) Medical Care and Sickness Benefits Convention, 1969 (No. 130) Maintenance of Social Security Rights Convention, 1982 (No. 157) Employment Promotion and Protection against Unemployment Convention, 1988 (No. 168) Maternity Protection Convention, 2000 (No. 183) Recommendations: Income Security Recommendation, 1944 (No. 67) Medical Care Recommendation, 1944 (No. 69)

Structure Social security, social protection, social protection floor ILO promotes the right to social security The problem: a major coverage gap How to extend social security? What is the situation and what do we do at country and regional level?

Coverage & resource gap Only about 20 per cent of the world’s working-age population (and their families) have effective access to comprehensive social protection Three dimensions of coverage (& gap) Scope. Number and type of social security branches to which the population of the country has access Extent. Percentage of persons covered within the whole population for each branch Level. Adequacy of coverage by a specific branch of social security Distinction between legal and effective coverage (often lower : enforcement issues and resource gap) Limited coverage linked with a resource gap: countries especially in Asia do not invest enough in social security However a basic SPF (universal pension, child benefit, basic HC, employment guarantee scheme) is affordable (in selected Asian countries: between 4 and 8% of GDP)

Coverage & resource gap Percentage of population legally covered by social health protection Some exceptions such as UCS in Thailand Providing coverage in the time of crisis and beyond SOURCE: (ILO, 2010)World Social Security Report Preliminary version, 15 March 2010

Coverage & resource gap Legal and effective coverage for old age pensions Effective coverage

Coverage & resource gap How much do countries invest in social security? In Asia the benefits of growth have not been equitably shared 5.3% of GDP

Structure Social security, social protection, social protection floor ILO promotes the right to social security The problem: a major coverage gap How to extend social security? What is the situation and what do we do at country and regional level?

How to extend social security? The Social Security Staircase Voluntary private insurance Statutory contributory social insurance Vertical dimension (higher levels of benefits for those who can contribute) 100% full coverage Basic coverage Intermediate coverage Partially contributory & linked schemes Basic benefits / social protection floor for all. Non contributory for the poor; other groups may contribute … Horizontal dimension (SPF & schemes for informal economy) Civil servants Armed forces Private sector employees Informal economy Poor and near poor

How to extend social security? The social protection floor initiative SPF-I = one of the 9 UN CEB initiatives (April 2009) to face the crisis and accelerate recovery Lead agencies: ILO and WHO At global level: A SPF Advisory Group headed by Mrs Bachelet A manual & strategic framework developed jointly SPF success stories A flagship Global SPF Report under preparation Knowledge sharing through the GESS platform At country level: establishment of SPF team … 1st lead by the ILO = SPF team in Thailand SPF success stories, Development Cooperation Seminar (DCS) on the SPF in October, SPF assessment to be conducted jointly

How to extend social security? The social protection floor in Asia China: minimum living standard guarantee program; new rural corporative medical care (NRCMC); health insurance for urban uninsured residents (HIUR); rural old-age pension India: RSBY, NREGA Cambodia: CARD’s SP strategy for the poor and the vulnerable with clear reference to the SPF … including HEFs, CBHIs, Food distribution, Cash transfers, PWPs… Lao: extension of SHP for all Thailand: UC scheme, minimum pension scheme (500 THB) Vietnam: 10 years Social protection strategy

Structure Social security, social protection, social protection floor ILO promotes the right to social security The problem: a major coverage gap How to extend social security? What is the situation and what do we do at country and regional level?

Extension of 5 benefits to Informal Economy* (article 40) Situation in Thailand 76% population Provident fund system -Govt P Fund -Private school teachers WF * maternity, invalidity, death, sickness and old age benefits Extension of 5 benefits to Informal Economy* (article 40) Workmen’s Compensation Fund (WCF) Social Security Fund (SSF) -Non contr. pension sch. -CS Medical Benefit Sch. UCS since 2001 (health) and 500 Bath scheme (pension) since 2009… Social assistance Civil servants Armed forces Private sector employees Informal economy Poor and near poor Challenges to extend coverage to IE workers (+/- 60 people joined) Fragmentation of social security schemes Inequalities have increased over past years … Capitation amount under UCS = 2,200 THB/capita whereas under CSMBS = 12,100 THB/capita

ILO’s implication in Thailand Vertical dimension Technical assistance: (1) Financial Management of the Thai Health Care System (EU project) – finished 2009 (2) Actuarial Valuation of the Old-Age Pension Branch of Social Security Scheme (KIHASA) - ongoing Advice / extension of social security to IE workers? Facilitation of SPF Team - ongoing Policy advice on: (1) Pension reform (M. Cichon) – July 2009 (2) 10 years of implementation of UCS – planned in 2011 Horizontal dimension

Scattered CBHI schemes Situation in Cambodia 80% population NSSF -Only work injury -Health insurance under study NSSF-C -Only pensions -Health insurance under study Scattered CBHI schemes Scattered social assistance programs: Health Equity funds and others Civil servants Armed forces Private sector employees Informal economy Poor and near poor CARD’s National Social Protection Strategy for the Poor and Vulnerable CBHI very limited coverage (100,000 people) NSSF and NSSF-C provide very limited scope of coverage

ILO’s projects in Cambodia Vertical dimension Feasibility studies of Social health insurance for private sector and civil servants through the ILO-EU project Support to MIS for NSSF work injury scheme Nothing for IE workers… NSPS: drafting (reference to the social protection floor); documenting the process (SPF Success story); costing of the strategy (ILO-EU project) Horizontal dimension

Voluntary scheme for SME and IEco (35,000 people!) Situation in Viet Nam Vertical dimension 75% population Mandatory Social Insurance old-age pensions, disability, health, sickness and unemployment insurance 9.4 million workers i.e. 18 per cent of the total workforce Voluntary scheme for SME and IEco (35,000 people!) Voluntary subsidized HI 11 million people covered Some social assistance (1.23% population) Mandatory Health insurance 30 million people covered Poor and near poor Informal economy State owned enterprises, public and private sector Horizontal dimension National Social Protection Strategy for the ten coming years (2011-20) .. Objectives: Universal health insurance by 2014; increase coverage of informal economy; social protection floor for all …

ILO’s projects & plans in Viet Nam Vertical dimension Role of SPF Advisory group?? Implementation of Unemployment Insurance through 2 projects (800,000 US$, 1 UN fund & ILO-Japan) ILO plan : Piloting (STEP expertise) ILO plan: Support to the implementation of the national social protection strategy & the development of a Social protection floor (Resource Gap) Horizontal dimension

Situation & ILO’s plan in Indonesia 83% population Jamsostek Taspen Askes Asabri Own hospitals Jamsostek pilot project (400,000 p. covered) Jamkesmas (76.4 million p. covered) CCTs / UCT; Rice for the poor; Scholarships; Community Empowt prog. Poor and near poor Informal economy Private sector employees Civil servants Armed forces National social protection strategy for the ten coming years Objective of universal HC coverage by 2014 (already 46% in 2009) Fragmentation of Social assistance ; challenges for IEconomy ILO plan: Support to the implementation of the national social protection strategy & Indonesian Jobs Pact through policy work, piloting, capacity building and increasing coordination (Resource gap)

Situation & ILO’s project in Lao PDR 88% population SSO (8 benefits) SASS Scattered CBHI schemes Health Equity Funds Civil servants Armed forces Private sector employees Informal economy Poor and near poor 7th Social Economic Development Plan (NSEDP) includes extension of social security for all by the year 2020 Merger of SSO-SASS and CBHI-HEF  merger of the 4 schemes ILO New project : 1. Support Lao PDR’s efforts towards the extension of social health protection, even if at a modest basic level, to the whole population … 2. Pave the way for the future implementation of more comprehensive social protection benefits for all the population by supporting the continuous development of social security schemes (4 MoUS$, 3 years; waiting for Luxembourg’s approval)

Regional Level Activities Support / promotion of UI / EI schemes (ILO-Japan ASEAN project + Feasibility in Malaysia and Philippines) Synergies // SP Floor teams: Thailand, Cambodia, Viet Nam …Willingness in Lao PDR and Indonesia Two regional training on (1) SPF; (2) Quantitative tools and methods Two awareness raising tools (schools, private enterprises) Knowledge sharing: GESS platform; ROAP website

Develop synergies with: Active Market Labour Policies & LED CSR & French multinationals HIV-AIDS Green Jobs  Research, workshops, joint projects?