by Segei Zelenev

The Commission for Social Development, considers the priority theme “enhancing social protection and reducing vulnerability in a globalizing world” at its 39th session in February 2001.

The epicenter of policy debate

Social protection can include issues like ensuring access for all, old-age retirement income and health care reforms, effects of privatization on equity or new forms of unemployment insurance. These issues are often headline news causing heated domestic debates. Social protection transcends national boundaries, particularly at a time of growing economic integration among nations. As nations move faster and closer to each other, the issue of adequacy of existing mechanisms of social protection gains additional importance.

Human rights: the point of departure

For many, enhancing social protection is an important and widely recognized objective of a social policy. Its aim is to secure human rights and improve the quality of life, particularly for the vulnerable and disadvantaged in society. The right to social security is underscored in the Universal Declaration of Human Rights.

The Declaration on Social Development adopted by the 1995 Copenhagen Social Summit contained a commitment to “develop and implement policies to ensure that all people have adequate economic and social protection during unemployment, ill health, maternity, child rearing, widowhood, disability and old-age” (Commitment 2(d)).
How do countries translate human rights provisions into specific entitlements and reconcile important and noble goals with limited financial means. “Copenhagen +5” (Geneva, June, 2000), underscored the importance of establishing or improving social protection systems as well as sharing best practices in this field.

A diverse world of social protection regimes

Traditions, cultures and organizational and political structures affect the institutions and the means of delivery. Social assistance usually depends on public funding, while social insurance schemes are financed by contributions.

We understand social protection to be a set of public and private policies and programmes designed to offset the absence or substantial reduction of income from work. It is also seen as a method of assisting families with children, as well as providing people with health care and housing.

Fiscal constraints are often used to justify critical decisions on social protection. While inequality is increasingly recognized as not only socially unjust but also an economic impediment, societies have different degrees of tolerance for inequality.
The cost of providing social protection should be weighed against the cost of not providing it. Often social protection has proven a good investment, leading not only to improved well being for the population, but to higher labour productivity, greater social cohesion, reduced social pathologies and other positive outcomes.

Challenges new and old

Social protection, employment and competitiveness are closely linked. As companies strive to remain competitive in international trade, costly social protection contributions are sometimes considered to erode competitiveness. Global economic pressure on the tax base is said to limit the ability of welfare states to ensure their citizens’ well-being. In developing countries, there is a growing recognition of the need to extend social protection to the informal sector. Developing and emerging economies also face pressure to keep labour costs low in order to compete.

Demographic trends in many countries, particularly an aging population, exacerbate the problem. While in many developed countries the proportion of children in the population has fallen and the share of elderly persons has risen, the proportion of young people in developing economies has remained stable. Nevertheless, in many developing countries armed conflicts, AIDS epidemics and widespread poverty are reducing the already low capacity of the working age population to contribute to social protection. In many economies the proportion of active participants in the labour force in relation to those dependent on social insurance mechanisms, particularly pension schemes, is shrinking dramatically.

Access to affordable health care is critical for well being. The quest for cost containment has resulted in user fees and co-payment schemes, considered contentious by many countries, conflicting with the stated objective of assuring access for the poorest. Social development projects, unlike economic projects, are usually linked with the creation of public goods. Hence, full cost-recovery is difficult, and above certain levels, regressive. Further, many developing countries experienced difficulties with inefficiencies in the collection systems.

Community participation in planning and programme design has sometimes helped to reduce wastage of resources by improved targeting. Community participation has also been important in restructuring and decentralization of social and health services, general access to primary health care and basic medicines, as well as for genuine improvements in quality and cost of social services.

In many developing countries support of the extended family remains an important element of coping strategies. Sometimes cooperative social protection systems play a significant role. Attempts to mobilize resources at the community and grass-root levels with the help of non-governmental organizations, voluntary agencies and financial institutions are likely to strengthen community efforts at providing social protection. Setting up an effective institutional framework for investing remittances in the recipient community has been particularly important.

The coverage of workers in the informal sector (a majority in some countries) provided by the insurers – whether public or private – has been insignificant due to perceived high risks. The financial sector tends to avoid providing savings and loan services to the poor. Some governments have made attempts to implement policies that provide coverage to workers in informal sectors, for instance to the self-employed. These welfare efforts typically include some project-based benefits, particularly to the urban populations, but in general they lack coherence and reliability.

Role of the State

While economic and social circumstances differ from country to country, the actual or potential role of the State is important but challenging:

• In many developing countries, needs are urgent, but the scope of public assistance is as insignificant as that of private.
  
  
• In many developed market economies, the high and often rising public expenditure levels associated with existing social protection policies, including active labour market policies as well as social insurance and social assistance programmes, have become a major concern.
  
  
• In economies in transition where the State once was the only provider of social protection, there is an ongoing quest for efficient and affordable pension schemes. Public expenditure trade-offs, for example, between social protection of vulnerable groups and more generous unemployment compensation or public investment, are particularly sensitive issues.

An international agenda

The Commission will consider social protection and innovative solutions. Country experiences with the introduction of new forms of service provision could be reviewed. Private-public sector partnerships may include non-government organizations and local organizations playing a major role and ensuring minimum existing standards of livelihood for the most vulnerable segments of the population.

Social protection has been crucial for social justice, equity, more even-handed economic growth and extension of acceptable standards to all. It can be instrumental in eradicating poverty. It can contribute to human capital formation. It is not a “mere expense”. Its potential is far from exhausted.

The Commission may outline future directions in the provision of social protection, such as seeking to strengthen mechanisms of global social governance within the United Nations system, building consensus on practical measures to bring it about.

For further detail, see, for example: Comprehensive report on the implementation of the outcome of the World Summit for Social Development ,Doc.A/AC.253/13-E/CN.5/2000/2 Ch.5, para.315 and Visible Hands. Taking responsibility for Social Development. An UNRISD Report for Geneva 2000.

Dr. Sergei Zelenev is Chief, Social Analysis and Policy Unit, Division for Social Policy and Development, Department of Economic and Social Affairs, United Nations, New York