1. Extending social protection to all Charles Crevier International Training Centre of the ILO Turin, 26 June 2012

2. Extending social protection to all ●Objective of the presentation: (a)Why do we need social protection? Human, social and economic necessities (b)Where do we stand? State of social security coverage (c)What do we do? Different ways of extending social security (d)How much does it cost? Fiscal space analysis (e)What does it do? Fiscal space analysis (f)How to do it? Sharing innovative experiences

3. Why do we need social protection? Consumption smoothing over the lifetime Y age Ymin Yt

4. Why do we need social protection? Consumption smoothing over the lifetime Y age Ymin Yt The basic problem of social protection

5. Why do we need social protection? Extending social protection to all ●Social security is a human right (a)Article 22 of the Universal Declaration of Human Rights states: “Everyone, as a member of society, has the right to social security” (b)Article 25: Everyone has the right to a standard of living adequate for health and well being for himself and of his family ●Social security is a social necessity (a)Economic growth does not automatically reduce poverty (b)Social security transfers are a powerful tool to reduce poverty and inequality reduce poverty by at least 50% in almost all OECD countries, (c)All socially and economically stable societies have extensive social security systems ●Social security is an economic necessity (a)Access to social health protection and education improves productivity levels an has a positive impact on growth (b)The famous trade-off between efficiency and equity is a myth. Cash transfers in developing countries have multiplier effects on local markets (c)Social security benefits are widely recognised as social and economic stabilisers in times of crises

6. Why do we need social protection? ILO Global campaign on Social Protection “Social protection has proven to be a powerful anti-crisis measure. It protects and empowers people, and contributes to boosting economic demand and accelerating recovery. It is also a foundation for sustainable and inclusive economic growth,” ILO Director-General Juan Somavia

7. Why do we need social protection? The global state of social security coverage and recent policy initiatives 6 80 % of the world population do not have access to comprehensive coverage 30% of the population do not have access to essential health care 60% of the elderly do not receive a pension 50% of children are living in poverty, many lack access to health and education Child and family benefits Strengthening social health protection Social pension programmes National social security strategies, based on social dialogue Social security coverage gap

8. Where do we stand? Social security coverage: Statutory and effective coverage 7

9. Where do we stand? Pension coverage: Effective coverage 8

10. 9 Old-age pensioners (at all ages) as a proportion of the elderly population (%) (a) Bangladesh, 18% (b) China, 35% (c) India, 23% (d) Indonesia, 22% (e) Korea, 33% (f) Malaysia, 37% (g) Nepal, 67% (h) Pakistan, 26% (i) Philippines, 17% (j) Viet Nam, 33%

11. What do we do? Extending social security to all the options ● Option 1: Extending classical social insurance (a) No cross-subsidization of non-covered part of the population; (b) Primarily designed for the formal sector and hence will not easily reach more than a portion of the total population, but (c) Recently showed some potential to extend health coverage to the informal sector through premium subsidization (e.g. Ghana)

12. – ● Option 2: Introducing community based social/mutual insurance schemes (a) Springing up in Africa and Asia, covering 40 million people now (b) Offers some possibility to increase resource base largely for health care (c) Offers a chance to empower demand side (d) Some possibility to tax the informal sector = is a step forward to formalisation, but (e) Is no stand-alone solution: requires financial links to national or international sponsor agencies What do we do? Extending social security to all the options

13. ● Option 3: Extending tax financed schemes (conditional, unconditional, means-tested, universal often called social transfers) (a) Can reach out to entire population subgroups (presently worldwide at least 150- 200 million people covered) (b) Requires some basic logistical capacity (c) Some level of social security can be afforded by all (d) Probably the biggest potential What do we do? Extending social security to all the options

14. How much does it cost? Costs for basic universal old age and disability pensions 13 Note: It was assumed that the simulated universal old-age and disability pension would be set at 30 per cent of GDP per capita, with a maximum of one US dollar (PPP) per day (increased in line with inflation) and would be paid to all men and women aged 65 and older; and to persons with serious disabilities in working age (the eligibility ratio was assumed to be 1 per cent of the working-age population, which reflects a financially conservative estimate of the rate of disability).

15. Source: Compatibility analysis of the national Social Protection Strategy and the UN Social Protection Floor Initiative: Costing and financial projections to implement social protection policies 2011-2020 (Draft), ILO, Geneva. How much does it cost? Vietnam: Analysis of cost to close the SPF Gap

16. Source: Compatibility analysis of the national Social Protection Strategy and the UN Social Protection Floor Initiative: Costing and financial projections to implement social protection policies 2011-2020 (Draft), ILO, Geneva.

17. What does it do? Vietnam: Assessing potential poverty impacts (poverty gap in % of GDP) Source: Compatibility analysis of the national Social Protection Strategy and the UN Social Protection Floor Initiative: Costing and financial projections to implement social protection policies 2011-2020 (Draft), ILO, Geneva.

18. What does it do? Extending social protection to all 17

19. How to do it? Sharing innovative experiences 1. Extension of the Universal Family Allowance: The Universal Child Allowance – Argentina Extension of the Universal Family Allowance: The Universal Child Allowance – Argentina 2. The Dignity Pension (Renta Dignidad): A Universal Old-age Pension Scheme – Bolivia The Dignity Pension (Renta Dignidad): A Universal Old-age Pension Scheme – Bolivia 3. Broadening Social Protection and Integrating Social Policies – Brazil Broadening Social Protection and Integrating Social Policies – Brazil 4. The Rural Social Insurance Programme – Brazil The Rural Social Insurance Programme – Brazil 5. Building a Social Protection Floor – Burkina Faso Building a Social Protection Floor – Burkina Faso 6. The National Social Protection Strategy for the Poor and Vulnerable: Process of Development – Cambodia The National Social Protection Strategy for the Poor and Vulnerable: Process of Development – Cambodia 7. The Red Protege, the Social Protection System, 2006-2010 – Chile The Red Protege, the Social Protection System, 2006-2010 – Chile 8. Developing a Basic Rural Medical Security System – China Developing a Basic Rural Medical Security System – China 9. The Subsidized Health-care Scheme in the Social Protection System – Colombia The Subsidized Health-care Scheme in the Social Protection System – Colombia 10. Towards a Universal Pension Protection Scheme – Ecuador Towards a Universal Pension Protection Scheme – Ecuador 11. Rashtriya Swasthya Bima Yojana – India Rashtriya Swasthya Bima Yojana – India 12. The Mahatma Gandhi National Rural Employment Guarantee Act – India The Mahatma Gandhi National Rural Employment Guarantee Act – India 13. A Social Protection Floor – Mexico A Social Protection Floor – Mexico 14. Setting Up a Social Protection Floor – Mozambique Setting Up a Social Protection Floor – Mozambique 15. Social Protection: An Ongoing Process – Rwanda Social Protection: An Ongoing Process – Rwanda 16. Child Support Grants – South Africa Child Support Grants – South Africa 17. The Universal Coverage Scheme – Thailand The Universal Coverage Scheme – Thailand 18. The 500 Baht Universal Pension Scheme – Thailand The 500 Baht Universal Pension Scheme – Thailand

20. Main reference documents: Extending social protection to all World Social Security Report 2010-2011 Extending social security to all: A guide through challenges and options 2011 Sharing Innovative Experiences 2011

21. End of the presentation Thank you