ISLAMABAD: Nearly half – 48 per cent – of all people over the pensionable age in the world do not receive a pension, and for many of the 52 per cent who do the coverage is not adequate.

This was stated in a new report released by the International Labour Organisation (ILO) to mark the ‘International Day of Older Persons’ on Wednesday

As a result, the majority of the world’s older women and men have no income security, no right to retire and must keep working as long as they can.

The ILO policy paper, “Social protection for older persons: key policy trends and statistics” showed that in recent years many middle and low-income countries have been rapidly expanding pension coverage through a mix of contributory and non-contributory, tax-financed social pensions. 

The report on the pension systems in 178 countries added that more than 45 nations had reached 90 per cent pension coverage and over 20 developing countries achieved or nearly achieved universal pension coverage. 

“Today, the majority of the world’s older persons live in developing countries where retirement is a privilege of public and private sector workers who are fortunate enough to work in the formal economy.”

The right to income security in old age, as grounded in human rights instruments and international labour standards, includes the right to an adequate social security pension. In many countries with high shares of informal employment, pensions are accessible only to a minority, and many older persons can rely only on family support.

Public expenditures on pensions range from 0-2 per cent of the GDP in low-income countries to 11 per cent of the GDP in the higher-income Western Europe. As an average, world countries spend 3.3 per cent on pensions for older persons.

High-income countries have reduced a range of social protection benefits and limited access to quality public services. Together with persistent unemployment, lower wages and higher taxes, these measures have contributed to increases in poverty or social exclusion, now affecting 123 million people in the European Union. Several European courts have found the cuts unconstitutional.

The cost of adjustment has been passed on to populations. Depressed household income levels are leading to lower domestic consumption and lower demand, slowing down the economic recovery.

The achievements of the European social model, which dramatically reduced poverty and promoted prosperity and social cohesion in the period following the Second World War, have been eroded by short-term adjustment reforms.

The strong positive impacts of social protection have brought the expansion of old-age pensions to the forefront of the development agenda. Social protection is a key element of national strategies to promote human development, political stability and inclusive growth.

The most middle-income countries are boldly expanding their social protection systems, thereby contributing to their domestic demand-led growth strategies. This presents a powerful development lesson.

Published in Dawn, October 2nd , 2014