Some Remarks on Coordinating Employment and Social Protection Policies Phnom Penh, Nov. 2011 Helmut Schwarzer

Social Protection and Employment as Part of a Development Paradigm Social and Employment Policies (SPF included) shall be integrated into National Development Plans Challenge of building an inclusive and employment-generating growth within the globalization This requires competitiveness and a strong social and political consensus: growth engines, macroeconomic stability, fiscal and social pacts This also requires strengthening the public sector: regulation, organization, analytical capabilities

Coordinated Management Employment policies Social Prot. Challenge of coordinating different institutional cultures - Coordination of services and transfers (synergies) - Data bases - Unification of services Coordination of supervision/ inspection

Employm, Income and Formali-sation Larger Taxation Basis Coordination with policies that strengthen the local offer of consumed goods. Employm, Income and Formali-sation Larger Taxation Basis Financing of social and develop-ment policies Less poverty and inequity, more purchasing power Domestic market stronger and more dynamic Fight against evasion Higher income Should increase demand for domestic production Higher expenditure efficiency, less administrative costs, more impacts on the ground. Social policies should be redistributive, diminish vulnerability.

Virtuous Linkages of Social Protection and Economic Development Backward Linkages of Social Protection Forward Linkages of Social Protection Inspired by Albert O. Hirschman’s « Linkages Approach » from Development Economics

Forward Linkages of Social Protection Schooling, Training, Employability Individual and Collective Health Enhances Competitiveness Human Capital Building Benefits usually spent on Consumption Strengthens Domestic Markets Iterations increase GDP Income Generation Generates Economic Activities which pay taxes and partially « reimburse » expenditure Strengthening Growth Engine increases taxation basis Fiscal Linkages Poverty Relief/Social Mobility increase Consensus & Support for Development Model Mitigates Impact of Crisis Allows for taking Risks Social Cohesion and Stability

Backward Linkages of Social Protection Social and Employment Services generate jobs, usually of good level Strong share of female employment Employment Generation in Social Services Enforcement and Compliance Mechanisms increase Application of Decent Work standards Labour Standard Setting and Enforcement Possibility of CashTransfers increases Wage Levels Public Policies organize/regulate private Markets Existence of Social Transfers and Services has effects on private markets

The Latin American Experience with SPF Programmes and Coordination

Latin American Experiences: Conditional Cash Transfer Schemes Brazil (Bolsa Família), Mexico (Oportunidades) Non-Contributory Pensions Social Assistance Pensions, Universal Benefit (Bolivia), Rural Pensions (Brazil) Innovations on Health Services Universal Health in Brazil Regimen Subsidiado in Colombia Integration of Benefits with Services Brazil SUAS, Chile Protege, Mexico Vivir Mejor, Uruguay Plan Equidad Integration of Contributory and Non-Contributory Benefits Chilean Solidaric Pension, Argentinean Child Benefit

Bolsa Família Program: Goals Supplementary programs Monetary benefit Conditionality Income guarantee: Immediate poverty alleviation Supports the exercise of social basic rights (education, health) Break-up with the intergenerational poverty transmission cycle Opportunity for the development of families

Conditional Cash Transfer Programs Search of integration: “Bundling/Coordinating” Transfers and Services Evolution from the old “Social Safety Nets” CCTs have goal of building human capital, so long term permanence of beneficiaries is seen as positive Argentina and Uruguay have evolved and extended the Family Benefit of Contributive Social Security to Informal Sector Cost: approx. 0.4-0.8% GDP

An example of “Coordinating”: Mexico’s VIVIR MEJOR: PROGRAMAS SEDESOL 1 Develpment of Basic Habilities Social Protection Network Social and Economic Development Bridges Environmental development Nutritional Programs PAIMEF INDESOL Regularization of Irregular land possession Tu Casa (Your House) Vivienda Rural (Rural Home) Rescate de espacios públicos Fonart

Bolivia: The Renta Dignidad Universal Old Age Benefit Introduced 2008, replaced Bonosol which comes from 1995 Pension Reform. Covers all Bolivians aged 60 or more living in Bolivia (Universal coverage) Benefit per person/year: US$ 340 (if no contributory benefit is collected by the person) or US$ 250 (if person receives contributory benefit). Funded by tax on oil and gas exploration and revenues from key Bolivian companies (% of shares owned by Bolivian State after privatization in the 1990s). Covers 800.000 persons (97% of target population). Integrated with Bono Juancito Pinto and Juana Azurduy (CCTs for children and pregnant women). 7% reduction of poverty, 10% reduction of extreme poverty.

Lessons from Latin American Countries To develop a mix of contributory and non-contributory schemes, coordinated, according to national conditions To search potentials and linkages between different policies To build strong targeting instruments in order to improve the cash transfer effect on poverty To build a unified database, share information