1. International Labour Office 1 The ILO Global Campaign to extend Social Security to all Social Security for all: The ILO’s Global Strategy Michael Cichon Social Security Department International Labour Office Amman, 6 May 2008

2. International Labour Office 2 The ILO Global Campaign to extend Social Security to all “The world does not lack the resources to eradicate poverty, it lacks the right priorities.” Juan Somavia, Director General of the ILO

3. International Labour Office 3 The ILO Global Campaign to extend Social Security to all Structure of the presentation Point One: The history and state of Social Security in the Arab States Point Two: The case for social security in development policy – Social security is a Human Right – Social security is an economic necessity – Social security is fiscally affordable Point Three: The new policy paradigm for the ILO Campaign Point Four: What the ILO can do to support the region…

4. International Labour Office 4 The ILO Global Campaign to extend Social Security to all Point One: History and state: developments… The history of social security in North Africa began in the early 1950s (Algeria 1949, Egypt 1956..) and in the Middle East in the middle of the 1950s (Iraq 1956, Syria 1959)… Today almost all of the 18 countries of the region have in place some social insurance schemes for old age, invalidity and survivor pensions for the formal sector Short-term benefits and medical care provisions for the formal sector are in place in roughly 40-50% of the countries, only 5 countries have formal schemes for unemployment Basic social assistance reaching out to people in informality are in place but of an ad hoc non systematic nature in many countries

5. International Labour Office 5 The ILO Global Campaign to extend Social Security to all Point One: History and state: challenges – economic diversity

6. International Labour Office 6 The ILO Global Campaign to extend Social Security to all Point One: History and state: challenges - labour force partcipation

7. International Labour Office 7 The ILO Global Campaign to extend Social Security to all Point One: History and state: challenges

8. International Labour Office 8 The ILO Global Campaign to extend Social Security to all Point One: History and state: challenges: the coverage gap and governance issues… Population coverage on average only about one third (wide variation, i.e. between 10% and 90%) Benefit coverage shows gaps in short-term benefits (such as health and unemployment) and social assistance for the poor Governance issues: wrong labour market incentives and administrative inefficiencies Today…we would like to set the agenda for ILO support for the next years until 2015…

9. International Labour Office 9 The ILO Global Campaign to extend Social Security to all Point Two: The case for social security in development policies: Social security is a human right Article 22 of the Universal Declaration of Human Rights states: “Everyone, as a member of society, has the right to social security” Even after almost 60 years that still remains a dream for 80 per cent of the global population. The ILO’s Declaration of Philadelphia charged the ILO with “…. the extension of social security measures to provide a basic income to all in need of such protection and comprehensive medical care”. In 2003 the ILO launched a Global Campaign to extend social security to all. The Campaign was launched in Jordan in 2005. The ILO now proposes a set of social rights as a social security floor. This is now the core message of the Campaign.

10. International Labour Office Point Two: …social security is an economic necessity… In order to convince governments and societies to spend on social protection, we have to show that countries can grow with equity. It can be shown that those countries that have been the most successful in achieving long-term sustainable growth and poverty reduction have all put in place extensive systems of social security at an early stage. 10

11. International Labour Office Point Two: …social security is an economic necessity… Economies cannot develop and grow without a productive workforce. In order to unlock a country’s full growth potential one has to fight social exclusion. It is social transfers that most directly and most effectively reach out to the excluded, the poor and those who have to re-orientate themselves. It is social security transfers that permit to pursue socially and economically balanced growth paths. 11

12. International Labour Office 12 The ILO Global Campaign to extend Social Security to all Point Two: Social security is affordable Our actuaries have shown time and again that we need less than 2 per cent of Global GDP to provide a basic set of social protection benefits to all people that have to live on less than one dollar a day. Evidence emerges that a minimum package of social security benefits is affordable in even the poorest countries as recent work by the ILO on the cost of a minimum package of social security benefits in sub- Saharan Africa, Asia and Latin America has shown and hence certainly in most Arab States (some of which are among the richest countries of the world…)

13. International Labour Office 13 The ILO Global Campaign to extend Social Security to all Point Two: Social security is affordable A basic package of modest pensions and child benefits can reduce the poverty head count by 40 per cent in poor developing countries at a cost of 3-4 per cent of GDP in some African countries. In Latin America the cost of a modest package of conditional child cash transfers, universal pensions and basic health care can be kept under 5% of GDP; the poverty headcount effects can reach a reduction of more than 50% We also think that there are indications that investing in a basic set of social security benefits early will actually cost nothing, as modest schemes should pay for themselves by productivity increases that they can trigger

14. International Labour Office 14 The ILO Global Campaign to extend Social Security to all Interim Summary: The question is no longer: “Can countries afford social security?”, the question rather is “how can they afford not to introduce schemes that reach out to all quickly”?

15. International Labour Office 15 The ILO Global Campaign to extend Social Security to all Point Three: The new developmental policy paradigm of the Global Campaign A “Universal but progressive” approach that ensures: Building progressively higher levels of protection Based on a basic floor of social security for all And seeks to ensure social outcomes rather than process and specific types of organizations…

16. International Labour Office 16 The ILO Global Campaign to extend Social Security to all The social security house The floor

17. International Labour Office 17 The ILO Global Campaign to extend Social Security to all Point Three: …building on a floor that could consist of four essential social security guarantees: Universal guarantee of access to basic health benefits, through a set of sub-systems linked together: basically a public health service funded by taxes, social and private insurance and micro-insurance systems. Guaranteed income security for all children through family/child benefits aimed to facilitate access to basic social services: education, health, housing. Guaranteed access to basic means tested/self targeting social assistance for the poor and unemployed in active age groups. Guaranteed income security for people in old age, invalidity and survivors through basic pensions.

18. International Labour Office 18 The ILO Global Campaign to extend Social Security to all – Higher levels of security should be designed by national tripartite debate and consensus, for increasing groups as economies develop… – but focussing on social outcomes rather than on process we would insist on 10 elementary principles… Point Three: … and at the same time achieving

19. International Labour Office 19 The ILO Global Campaign to extend Social Security to all (1) Universal coverage: … minimum level of income protection and access to essential health care for all residents. (2) Benefits as of rights: benefits as of predictable rights as a resident and /or as of right as a contributor. (3) Protection against poverty: the system should protect all people against poverty. (4) Income security: benefit levels should have reliable minimum levels as stipulated in ILO Convention No. 102. (5) Actuarial equivalence of contributions and benefit levels: fair relationship between contributions and benefits. Point Three: … conditional on 10 basic principles

20. International Labour Office 20 The ILO Global Campaign to extend Social Security to all (6) Guarantee a minimum rate of return on savings: the real value of contributions paid into savings schemes should be protected. (7) Gender fairness: benefit provisions should be gender-neutral and gender-fair. (8) Sound financing: schemes should be financed in such a way as to avoid uncertainty. (9) Fiscal responsibility: individual schemes should not crowd out the fiscal space for other social benefits. (10) State responsibility and good governance: the State should remain the ultimate guarantor, social partners should participate in the governance of social security. Point Three: … conditional on 10 basic principles

21. International Labour Office 21 The ILO Global Campaign to extend Social Security to all Point Four: What the ILO can do to support the region… Essentially probably three things: (a) Set International standards that define minimum benefits for certain stages of development, that can then be used by national advocacy groups to promote the development of national systems, and be built into international development policy agendas. (b) Help to develop and implement national action plans for social security (in the context of Decent Work Country programmes) that draw up a credible and pragmatic roadmap for the development of social security benefits and the creation of new tax and contribution systems that create the fiscal space that is needed. (c) Help to develop a tool for voluntary monitoring of progress Thank you