GENEVA: Just 20 per cent of people in the world coverage for health services and are ensured a basic income in old age or in case of job layoffs, sickness, disability or maternity, according to the International Labour Organization (ILO).
The decline of social security in the past two decades has left less than 10 per cent of the population in the poorest countries with adequate coverage, says the report presented Wednesday in Geneva by ILO director-general Juan Somavma.
The figures in the report, “Extending Social Security: Policies for developing countries”, show that more than half the world population “has no social security coverage of any kind,” due mainly to the dramatic expansion of the informal economy.
Among the developing regions with the least protections are sub-Saharan Africa and South Asia, where just five to 10 per cent of people are covered by social security.
Emmanuel Reynaud, head of the social security policy division of the ILO, acknowledged that this United Nations agency does not have a clear-cut solution to the problem, which is why it is launching the “Global Campaign on Social Security and Coverage for All”.
The ILO is convinced that social security is a crucial tool for human and economic development, Reynaud said.
The initiative announced here on Wednesday represents the consensus of governments and employers’ and workers’ organizations that social security coverage must be expanded, and aims to mobilise a broad partnership of donor countries, social security institutions and civil society organizations.
One of the major challenges of the endeavour will be to find new ways to handle the problem of the rapidly expanding informal economies, particularly in poor countries, a phenomenon that means that fewer and fewer workers have social security coverage.
In most industrialized countries coverage nears 100 per cent, in stark contrast to the realities of the least developed countries, and even the so-called transition economies.
For several decades the belief predominated — and was shared by the ILO — that social security coverage would gradually expand in the developing world after having taken root in “the modern economy” of the industrialized world.
Reynaud noted that the ILO worked under these criteria in the 1960s and 1970s, but then the informal sector really took off, growing so much that it is now a full-fledged “informal economy”.
Another challenge for the ILO, a tripartite of governments, workers and employers, is the widespread conception that social security is a luxury exclusive to nations of the industrialized North and that implementing such systems in poor countries would represent an enormous financial burden.
Western Europe has the highest social security expenditures, nearing 25 per cent of gross domestic product (GDP), followed by North America, at 16.6 per cent GDP. The region with lowest spending on social security is Africa, with an average of 4.3 per cent GDP.
But the true objective of the ILO campaign is to achieve concrete progress in social security coverage worldwide, Reynaud said as he announced the initiative on Wednesday.
The strategy adapts to the financial capacity of each country. In the poorer nations, the ILO tries to work at the local and community level, supported by the abilities and creativity of the population in organizing and defining what their needs are.
For example, in the Indian state of Gujarat, the ILO backs the efforts of the Self-Employed Workers Association, founded 30 years ago and today representing 700,000 women working in the informal economy, reported Wouter Van Ginneken, who authored a study of the Gujarat initiative.
India’s informal sector encompasses approximately 90 per cent of the country’s economic activity, but has proved creative in tackling the question of social security, Reynaud said.
Meanwhile, in China, the elimination of state enterprises representing 500 million jobs meant that social security for as many people was eliminated along with them.
“Social security for all” has existed in some form in communist China, but the shift towards a market economy has called the system into question. The challenge now is to build a new system for the new reality, said the ILO official.
Director-general Somavma stressed, “there is no universal approach to expanding social security coverage. Each country has its unique situation and requires tailored solutions.”
For example, some middle-income countries have made significant progress in coverage.
Health coverage in South Korea expanded from 20 per cent in 1997 to 100 per cent in 1989. Both health and pension coverage increased in Tunisia, jumping 24 per cent between 1989 and 1999 to reach 84 per cent.
Reynaud also noted that the ILO will also press the IMF and World Bank to adopt ‘new criteria’ with respect to their recommendations for the social security systems seeking financial support from the two institutions.—Dawn/The InterPress News Service.
