ISLAMABAD: A study on Social Protection Index (SPI) in Asia and the Pacific just released by the Asian Development Bank suggests that countries in the region need to expand their social protection systems and make their impact more equitable – not just for the poor but for a substantial proportion of the non-poor but vulnerable members of society.
These vulnerabilities include old age, death, natural disasters, unemployment, and financial shocks that require adequate systems to address such risks and calamities, says the study titled “Poverty Dimension of the Social Protection Index: Assessing Results for Asia and the Pacific.”
According to the study, expanding social protection will have to rest on a broader foundation and economic growth will have to be accompanied by productive employment and social protection programmes that have the potential to expand the fiscal capacity of governments.
For social protection programmes to be not just pro-poor, but also inclusive in development, they must broaden social insurance coverage, provide meaningful labour market programmes, and address vulnerable groups and the “missing middle,” it says.
The study emphasised that with these universal provisions in place, social protection programmes would be better placed to address issues of equity and social justice beyond the traditional confines of risk and efficiency objectives.
In Pakistan, the expenditures per potential beneficiary are 5.1 per cent of poverty-line expenditures for the non-poor but only 3.3pc for the poor, study notes.
Pakistan is also among the seven countries of the region which are clearly below the regression line. The data also shows that as the size of the poor population increases, the size of the benefits that they receive tends to diminish.
The SPI across Asia and the Pacific reveals a wide range of results, and many countries, however, appear to be under-performing a significant number, especially middle-income country, are spending far too little on social protection, study says.
The SPI estimates for the poor are generally significantly smaller (0.024) than the non-poor (0.086). These SPI estimates are, however, based on the respective population weights for the poor and non-poor with the poor usually being a much smaller proportion of all potential beneficiaries than the non-poor.
Asia and the Pacific experienced rapid economic growth over the past two decades, which has contributed to poverty reduction, lifting hundreds of millions of people out of income poverty.
Based on recent estimates, the number of poor people living in extreme poverty ($1.25 per day) has fallen but remains high at about 743 million. This estimate doubles to 1.64 billion when using $2 per day as the benchmark.
Increasing attention to social protection in Asia and the Pacific is a result of many challenges that face the region – among others, inadequate social protection expenditures, persistent poverty, growing levels of inequality, presence of huge informal sectors, demographic transition, and globalisation.
Social insurance expenditures on the non-poor in all regions of Asia and the Pacific have the largest share in the total expenditures on social protection. A common dilemma faced by many developing Asia and Pacific countries is providing more effective social assistance programmes that are primarily geared towards expanding people’s opportunities.
The study notes that social insurance tends to dominate the SPI in all the five regions in Asia and the Pacific. This is particularly the case in East Asia, the richest region where the SPI for social insurance accounts for about 91 per cent of the overall SPI, showing that most of the social protection expenditure on the non-poor in this region is on social insurance.
In South Asia, the share of the expenditure on social assistance programmes for the non-poor is notably higher than that for the poor, according to the study.
Published in Dawn, June 15th, 2014