Developing countries require $1.2 trillion investment to guarantee basic social protection, says ILO
22 September 2020 |
3:37 am
An investment of about $1.2 trillion is required by developing countries to guarantee basic social protection, the International Labour Organisation (ILO), has said.
An investment of about $1.2 trillion is required by developing countries to guarantee basic social protection, the International Labour Organisation (ILO), has said.
The additional sources of financing, the ILO said is to close the coverage gap worsened by Coronavirus (COVID-19) pandemic.
Director, Social Protection Department, ILO, Shahrashoub Razavi, in a report on, “Financing gaps in social protection: Global estimate and strategies for developing countries in light of the COVID-19 crisis and beyond,” said the fund will guarantee at least basic income security and access to essential health care for all in 2020.
She said since the outset of the COVID-19, the social protection financing gap has increased by approximately 30 per cent, according to the report.
She said it was the result of the increased need for healthcare services, and income security for workers who lost their jobs during the lockdown and the reduction of gross domestic product (GDP) caused by the crisis.
She maintained that the situation is particularly dire in low-income countries that would need to spend nearly 16 per cent of their GDP to close the gap – around $80 billion.
Currently, the report said only 45 per cent of the global population is effectively covered by at least one social protection benefit. The remaining population of more than four billion people is completely unprotected.
Regionally, Razavi said the relative burden of closing the gap is particularly high in Central and Western Asia, Northern Africa, and sub-Saharan Africa (between eight per cent and nine per cent of their GDP).
According to her, before the COVID-19 crisis, the global community was failing to live up to the social protection legal and policy commitments it had made in the wake of the last global catastrophe – the 2008 financial crisis.
In closing the annual financing gap, Razavi said it required international resources based on global solidarity.
She said national and international efforts to mitigate the impact of the crisis as provided in short-term financing assistance for financing the system is not nearly enough to close the gaps that are needed.
She mentioned that some countries have sought innovative sources to increase the fiscal space for extending social protection, like taxes on the trade of large tech companies, the unitary taxation of multinational companies and taxes on financial transactions or airline tickets.
While creating fiscal space through domestic sources is a priority, she noted that these options would not be enough for low income countries where the social protection financing gap is extremely high compared to their limited fiscal capacity.
“Therefore, domestic resource mobilisation should be complemented by International resources based on global solidarity.
“Closing this (the social protection financing) gap is both necessary and achievable if concerted political will can make this happen can make social protection for all a reality,” she said.
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