Transcript Social security schemes in low

HOW CAN SOCIAL SECURITY SCHEMES BE
DESIGNED FOR LOW-INCOME COUNTRIES TO
EFFECTIVELY PROVIDE FOR THE POOREST?
Presentation to the International Conference”
Taking Action for the World’s Poor and Hungry
People”
Beijing, China
15th – 20th October 2007
Fezile Makiwane
Objectives of social
security
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Protection of the poor and vulnerable;
Acceptable standard of living;
Ensure consumption smoothing;
Reduce risk; and
Spreading income over a life cycle
Social security context in
SADC (UNDP Report, 2005)
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High levels of unemployment
– 50% unemployment
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High levels of poverty
– Up to 60 % of population live below $1 per day
– 30 % of population undernourished
– 72.9 % of population in Zambia live below
national poverty line
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Income inequalities
– Income inequality more than 50 in 8 SADC
countries
Coverage
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Over 2 billion people world-wide are not
covered by any social security arrangements
About 50 million people in low-income
countries not covered against basic social
risks
Mostly contributory social insurance for
employees
Social insurance restricted to those in formal
employment (which is as low as 10% in
some countries)
Modalities for coverage
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Enhancing general living standards
and expanding basic human capacity
– Access to basic services
– Housing
– Employment generation
– Education
South Africa social
security transfers
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The main objective of social assistance
transfers is to reduce poverty and
promote social development,
Over 12 million South Africans receive
social assistance through some form of
income grant.
South Africa- CSG
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The CSG introduced in 1998 as a poverty alleviation
mechanism
Seeks to support income of poor households to
enable them to care and provide for basic needs of
the child.
It is a means tested cash transfer program which is
paid to a primary care giver (PCG) of a child.
The grant is weighted to rural areas and informal
settlements.
The program currently covers over 8 million
children up to the age of 14.
The CSG transfers are unconditional cash transfers.
South Africa –CSG
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The average households receiving CSG
were found to derive:
– one third of their total income from CSG,
– a quarter from other transfers and
– One third from employment.
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18 % eligible households wholly dependent
on the CSG, and 36 % depend on the CSG
and on other state transfers.
South Africa- SOAP
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The State Old Age Grant provides social assistance
to over 2 million South Africans.
Coverage- 70 percent of the total adult population.
Age of eligibility: 60 for female and 65 for male.
Means tested program, although presently there is
a debate on the need for the means test.
SOAP initially intended to provide a social safety net
for aged poor, however, its benefits are distributed
more broadly to all members in the household
because the majority of households in South Africa
live in multi-generational households.
South Africa- SOAP
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The SOAP reduces the poverty gap for
pensioners by 94 percent.
Poor households with pensioners are
on average significantly less poor than
households without pensioners. (Anne
Case, 2000 and Committee of Inquiry
into Social Security, 2002)
Social transfers- impact
Poverty Measure
Household Living
Standards
Poverty headcount
Individual, % reduction
7.2 %
Average Poverty Gap
% reduction (Median)
22.9 %
Poverty Gap Ratio, %
point reduction.
14.6 %
Rand poverty Gap, %
reduction
28.7 %
Uganda- Pilot Cash Transfer
Programme
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The Govt is designing a Pilot Cash Transfer
Scheme with support from DFID;
Target 20% of the Ugandan population who
are in chronic poverty;
Initially, the scheme to cover 4 districts out
of 80 in the country;
Program to cover 9,000 households in the
lowest 10% quintile and cost US $ 8.4
million for 3 years.
Monthly cash transfer per HH ranges btn US
$ 10 – 15 for one person to maximum five
person HH.
Brazil
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Brazil has non-conditional old-age and
disability cash transfers and
conditional education and health
grants (Bolsa Família).
Conditional grants alleviate short-term
poverty but also provide incentives for
human capital accumulation, thereby
alleviating long-term poverty
Brazil - BPC
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The objective of the program is to eradicate
extreme poverty in targeted groups
no conditionalities
Monthly transfer, non-contributory
Targets extremely poor AND
- Over age of 65 or with severe disability
2,5 million beneficiaries, cost ~=0,4% GDP
Brazil-Bolsa Família
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Alleviate short term poverty by transfers and
long term poverty by incentives to human
capital accumulation
Conditional: Education and health
Targeted at Poor - Differentiation of values
according to number of school age children
Supplement incomes – assumes families
can have other sources of income
11 million beneficiaries
Mexico- Oportunidades
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The program is targeted to poor
households through a mix of
geographical and proxy means test
targeting.
Is the main social assistance program
of the Mexican government.
Covers over 5 million beneficiary
households in extreme poverty in 2005
in both urban and rural areas
Mexico - oportunidades
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provides currently four types of
monetary grants: (i) education grants;
(ii) health/nutrition grants; (iii)
“energy” grants; and (iv) a “pension”
or income support for the elderly
(above 70 years of age)
Oportunidades-Impacts
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Decreased morbidity in children, youth and adults
(around 20%);
Reduced stunting in young (2-6 months old) girls
by 39.3% and boys by 19.4%;
11% lower maternal mortality in beneficiary
municipalities (15% in municipalities with more
than 35% of the resident population in the
program);
2% decrease in infant mortality in beneficiary
municipalities (6% in municipalities with more than
35% of resident population in the program);
Increases school enrollment for children who enter
secondary school, with percentage increases in
enrollment over 20% for girls and 10% for boys.
Oportunidades - Impacts
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Headcount poverty rate declined by
17% in rural areas
Poverty gap and the severity of
poverty measures declined by 36%
and 46%
Other means of social
protection
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Targeted employment creation programmes,
e.g.:
– Public works programmes (although with limited
effect)
– Employment guarantee schemes (India)
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Community-based social insurance (with
possible government co-funding – e.g.
Community Health Insurance in Tanzania)
Micro-lending and micro-insurance
Other social protection
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Welfare funds (e.g. tax/cess imposed on
aggregate output of industry, and used for
social protection of workers in the industry,
and their dependants) (India)
State-created contributory-based social
protection schemes for informal economy
workers (possible government co-funding)
(India)
Conclusion
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Integrated approach that have
objectives relating to alleviation of
both short-term and long-term poverty
Development of human capacity
Administrative efficiency
Good governance
Multi-actor responsibility