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International Labour Office Building a Social Protection Floor with the Global Jobs Pact - The Background Report 2nd African Decent Work Symposium Yaoundé, Cameroon, 6–8 October 2010 The ILO Global Campaign to Extend Social Security to All 1 Structure of the presentation One: Two: Three: Four: Five: Six: Seven: International Labour Office The Policy context The economic and social context Diagnostics: The state of social protection in Africa The emerging policy paradigm Affordability and feasibility Impact and evidence Implementation strategies and what can the ILO do? The ILO Global Campaign to Extend Social Security to All 2 One: The Policy context – a reminder We know from more than one century of history of the modern welfare state that social transfers and services are powerful policy instruments to combat poverty, insecurity and inequality and ...achieve the MDGs Social services and transfers are an economic necessity to unblock the full economic potential of a country, only people that are healthy, well educated and well nourished can be productive There is now widespread acceptance that social protection/security serve as social and economic stabilisers in times of crisis Countries with existing systems are in a better position to cope with the social and economic fall-out than those who have to introduce new ad-hoc measures And yet, still 75-80% percent of the global population do not enjoy a set of social guarantees that allows them to deal with life’s risks… …There is a need for a social protection floor below which nobody should fall … The ILO Global Campaign to Extend Social Security to All International Labour Office 3 One: The Policy context – a reminder The Assembly of Heads of State and Government of the African Union in September 2004 in Ouagadougou adopting the Ouagadougou Declaration and Plan of Action The Livingstone and Yaoundé conferences (March and September 2006) that recommended the general introduction of a basic package of social security benefits. The 11th ILO African Regional Meeting, held in Addis Ababa in April 2007, which invited all African countries to adopt coherent national social security strategies. The First Session of the African Union Conference of Ministers in Charge of Social Development (Windhoek, Namibia, 27-31 October 2008), adopted the Social Policy Framework for Africa that recommended the implementation of a minimum package of social security benefits. The High Level Committee on Programmes of the UN Chief Executives Board in 2009 adopted the Social Protection Floor…. The International Labour Conference in June 2009 that endorsed the social protection floor approach in the Global Jobs Pact, The Tripartite Meeting of Experts on Strategies for the Extension of Social Security Coverage, Geneva September 2009, recommending the two-dimensional strategy to extend social security. The First African Decent Work Symposium in December 2009 in Ouagadougou, highlighted that building a social protection floor for all is under way in several African countries, and recently The Millennium Summit 2010 endorsing the SP floor… The ILO Global Campaign to Extend Social Security to All International Labour Office 4 Two: The economic and social context… International Labour Office Poverty and GNI per capita, Eastern and Southern Africa (ESA) (latest available year) GNI per capita (US$) % of population below international poverty line of US$1.25 per day, 1992-2007 7 000 100 90 6 000 80 60 4 000 50 3 000 40 Percentage 70 30 2 000 20 1 000 10 The ILO Global Campaign to Extend Social Security to All Bostwana South Africa Namibia Swaziland Lesotho Zambia Kenya United Rep. of Tanzania Uganda Rwanda Madagascar Mozambique Zimbabwe Malawi 0 Ethiopia 0 Burundi Total in US$ 5 000 5 Two: The economic and social context… Life expectancy at birth and infant mortality, by region, 2006 International Labour Office Mortality rate (per 1 000 births) / life expectancy (years) 200 180 Under five mortality rate (per 1,000 births) 160 Infant mortality rate (per 1,000 births) Life expectancy at birth (years) 140 120 100 80 60 40 20 0 Eastern and Southern Africa Western and Central Africa South Asia Middle East and North Africa East Asia and Pacific Latin America and the Caribbean Source: UNICEF 2008 - Social protection in Eastern and Southern Africa: A framework and strategy for UNICEF The ILO Global Campaign to Extend Social Security to All 6 Two: The economic and social context… International Labour Office 100 Total 80 Men Women 60 40 20 Ukraine [2002] South Africa [2004] Chile* [2003] Brazil* [2002] Costa Rica [2003] Bolivia* [2002] Thailand [2002] Zambia [2005] India* [2004/2005] Tanzania [2006] 0 Benin [2002] Share in total employment | including agriculture Employment in the informal economy as a percentage of total employment (including agriculture), various years * Urban areas only The ILO Global Campaign to Extend Social Security to All 7 Percentage of life births attended by skilled health personnel 0 Hig h est w ealth q u in tile L o w est w ealth q u in tile The ILO Global Campaign to Extend Social Security to All G abon |2000 C ongo |2005 N am ibia |2007 Benin |2006 Sw aziland |2007 M alaw i |2004 Zim babw e |2006 R w anda |2008 Tanzania, U nited R ep. of |2005 Burkina Faso |2003 M ali |2006 Lesotho |2004 Togo |2006 M adagascar |2004 C ôte d'Ivoire |2006 C am eroon |2004 U ganda |2006 Sierra Leone |2008 G am bia |2006 Zam bia |2007 C entral African R ep. |2006 Liberia |2007 M ozam bique |2003 Burundi |2005 G hana |2008 M auritania |2007 Senegal |2005 G uinea-Bissau |2006 Kenya |2003 G uinea |2005 N igeria |2008 Eritrea |2002 N iger |2006 C had |2004 Ethiopia |2005 Births attended by skilled health personnel, various years between 2000 and 2008 (percentages, by wealth quintile) 90 80 30 70 25 60 50 20 40 15 30 10 20 10 5 0 Source: WHO Global Health Observatory, in WHO, 2009. 100 Ratio highest-lowest wealth quintile Three: The social protection diagnostics International Labour Office 35 Ratio h ig h est-lo w est w ealth q u in tile 8 Three: The social protection diagnostics International Labour Office Old-age pensioners (all ages) as a proportion of the elderly population, 2008 (percentages) Source: ILO Social Security Department database Mauritius South Africa Namibia Lesotho Tunisia Algeria Mozambique Congo Morocco Congo, Democratic Rwanda Djibouti Senegal Côte dIvoire Cameroon Zambia Mauritania Zimbabwe Niger Burundi Sudan Ghana Tanzania, United Rep. Togo Guinea Gambia Benin Chad Burkina Faso Uganda Sierra Leone 0 10 20 30 40 50 60 70 80 90 100 Old-age pensioners (all ages) as a proportion of the elderly population (%) The ILO Global Campaign to Extend Social Security to All 9 Three: The social protection diagnostics International Labour Office Total public social security expenditure by region, weighted by population, latest available year (percentage of GDP) 30 25.1 Public social security expenditure (excluding health) 25 Public health expenditure 20 18.9 16.0 15 13.6 13.5 10.2 10 9.8 8.4 5.3 5.3 Asia and the Pacific SubSaharan Africa 5 Source: ILO Social Security Department database Percentage of GDP Total public social security expenditure 0 Western Europe Central and Eastern Europe North America North Africa CIS Latin America and the Caribbean Middle East The ILO Global Campaign to Extend Social Security to All Total 10 seek to provide higher levels of income security and access to higher quality health care Four: … an emerging policy framework for the ILO campaign to extend social security to all: a staircase and and a story of two dimensions International Labour Office Voluntary insurance Mandatory social insurance/social security benefits of guaranteed levels for contributors THE FLOOR: Four essential guarantees Access to essential health care for all Income security Assistance Income security Children Unemployed/ underemployed & poors Elderly & disabled Extension of some income security and access to health care to the whole population The ILO Global Campaign to Extend Social Security to All 11 International Four: The horizontal dimension: Labour The social security component of the social Office protection floor that could consist of four essential social security guarantees: all residents have …access to a nationally defined set of essential health care services; all children have income security, at least at the level of the nationally defined poverty line level, through family/child benefits aimed at facilitating access to nutrition, education and care; all those in active age groups who are unable to earn sufficient income on the labour markets should enjoy a minimum income security through social assistance … all residents in old age and with disabilities have income security at least at the level of the nationally defined poverty line through pensions for old age and disability. The ILO Global Campaign to Extend Social Security to All 12 Four: The vertical dimension: Back to home turf… Promote benefit ranges and levels in the formal economy that comply with ILO Conventions Promote the ratifications of up-todate Conventions, notably C. 102 The ILO Global Campaign to Extend Social Security to All International Labour Office 13 Five: Affordability: The simulation exercise that started the debate – Assumptions Basic old age and invalidity pensions: – based on a health system staffing ratio of 300 medical professionals per 100,000 population, overhead 67% of staff cost … Basic social assistance for the unemployed: – 15% of per capita GDP capped at US$ 0.50 PPP, for a max. of two children in age bracket 0-14 Essential health care: – 30% of per capita GDP capped at US$ 1 PPP per day Child benefits: – International Labour Office 100 day guaranteed employment paid at 30% of per capita daily GDP to 10% of the population Administration cost: – 15% of cash benefit expenditure The ILO Global Campaign to Extend Social Security to All 14 Five: … a basic social protection package is affordable: Cost of basic transfers… International Labour Office Costs for components of a basic social protection package for selected countries in Africa, 2010 (percentage of GDP) Child benefits Health care Social assistance/employment scheme Administrative costs Source: ILO Social Security Department. 2008 6 Old-age pensions Percentage of GDP 5 4 3 2 1 0 Burkina Faso Cameroon Ethiopia Guinea Kenya Senegal The ILO Global Campaign to Extend Social Security to All United Rep. Tanzania 15 Six: Impact…effects on poverty of a basic package of pensions and child benefits Senegal 0 International Labour Office Tanzania Basic needs poverty rate in % Food poverty rate in % -10 Percentage -20 Basic needs poverty gap in % Food poverty gap in % -30 -40 -50 -60 -70 -80 The ILO Global Campaign to Extend Social Security to All 16 Six: Financing strategies: Lack of fiscal space? The good news International Labour Office Total public expenditure and social expenditure at different levels of GDP per capita, latest available year 60 Belarus Slovenia Hungary Ukraine 50 Belgium Seychelles Italy Croatia Portugal Greece Czech Republic Republic of Moldova United Kingdom Slovakia Morocco 40 Germany Poland Bulgaria Mongolia Romania Tunisia Viet Nam Azerbaijan 30 Estonia New Zealand Uruguay Russian Federation France Argentina Germany Bahrain Albania Burundi Georgia Panama 10 Uganda 0 Hungary Israel Malta Singapore New Zealand Chile Estonia United Arab Emirates Kazakhstan Viet Nam Japan Czech Republic South Africa Korea, Republic of Mexico India Spain Korea, Republic of Slovakia Argentina Bolivia Georgia Burundi Ethiopia 0 Poland United Kingdom Latvia Russian Federation Mongolia Belgium Italy Greece Portugal Trinidad and Tobago Panama Croatia El Salvador Uruguay China Chile Indonesia Thailand Belarus Nepal Dominica Bulgaria India Republic of Moldova 20 Kuw ait Costa Rica Mauritius Ukraine Linear (Public SP & health expenditure as a percentage of GDP) Japan South Africa Kuw ait China Bhutan 5 000 Bahrain Thailand 10 000 15 000 Public government expenditure as a percentage of GDP Spain Latvia Bolivia Ethiopia Public SP & health expenditure as a percentage of GDP 20 000 25 000 30 000 35 000 Linear (Public government expenditure as a percentage of GDP) Sources: IMF, 2009 (various years); UNDATA database Public SP & health expenditure as a percentage of GDP and Total government expenditure as a percentage of GDP France GDP per capita PPP The ILO Global Campaign to Extend Social Security to All 17 Six: Creating fiscal space – an historical example…… International Labour Office Percentage of GDP Social expenditure in Germany 1950-2008 as a percentage of GDP The ILO Global Campaign to Extend Social Security to All 18 Six: Good news: Growing fiscal space International Labour Office Increase of domestic public resources, selected African countries, 2002–07 (percentage of GDP) 50 Before 2002 Estimated 2008 40 30 10 Tanzania Swaziland South Africa Senegal Nigeria Niger Madagascar Ghana Chad Congo R. -10 Cape Verde 0 The ILO Global Campaign to Extend Social Security to All Source: OECD, 2007. 20 Benin Percentage of GDP Difference 19 Six: Financing strategies Domestic resource mobilisation – – – – – International Labour Office Increase the efficiency of tax collection Reduce waste Broaden tax base Introduce self financing insurance systems (largely health care) Increase overall tax rates International resources (transitional financing) – – – – Modified social security oriented budget support ? Project financing to build national delivery capacity International financing of health care goods and services Financing of the start-up of social protection floor components The ILO Global Campaign to Extend Social Security to All 20 Six: A reality check “Compendium of cash transfer programs in developing countries” …a number of countries are already providing some basic guarantees … International Labour Office Number of countries in study: 28 - 8 in Africa, 9 in Asia, 11 in Latin America Number of studies: 80 studies during 1999 and 2008 Number of programmes: 63 Estimated number of total beneficiaries (primary and secondary, at the end of 2008): between 150 and 200 million people Expenditure starts at less than 0.5% of GDP… The ILO Global Campaign to Extend Social Security to All 21 International Labour Office Six: Impact of SPF policies Realization of the Human Right to Social Security Improved health and nutritional status of children and other houshold members Raising productivity Reduce poverty FASTER => Progress towards MDGs – 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 Reduction of economic political instability inequalities The ILO Global Campaign to Extend Social Security to All and 22 Six: The Global Jobs Pact and the SPF as a development strategy Higher levels of Social Protection Employed in formal sector and paying taxes International Labour Office SPF Investments The virtuous cycle of development Schooling/Training Good health Employable The ILO Global Campaign to Extend Social Security to All 23 Seven: Implementation strategy for social protection floors for all Africans International Labour Office At the Global and African level: Adopt a comprehensive development strategy in line with the Global Jobs Pact, the SPF initiative and the recurrent item conclusions on employment Demonstrate political will through an African statement on the two dimensional extension of social security and the Social protection floor building on ARM in 2007 and Windhoek 2008 and … Carry that message to the ILC 2011 including… Signaling to the ILC the necessity of a new mechanism for the Social Protection The ILO Global Campaign to Extend Social Security to All 24 Seven: Implementation strategy for social protection floors for all Africans International Labour Office At the national level: develop a national vision on Social Protection building on the Social Protection Floor and translating the vision into a time-bound plan Define minimum benefits as of right in a national dialogue process Undertake sound costing exercises Create the fiscal space in a national social dialogue process Build national capacities The ILO Global Campaign to Extend Social Security to All 25