ILO seeks global expansion of social security to tackle inequalities

ILO Director-General Guy Ryder

ILO Director-General Guy Ryder

There is no more excuse by any nation not to institute social protection initiatives, the International Labour Organization (ILO) has said.

The Director General of the global labour watch body, Guy Ryder, who stated this in China while addressing delegates to the ILO-China-ASEAN South South high-level conference on universal social protection, declared that in 2016, a lack of social protection is completely unacceptable.

The event – which takes place right after the G20 summit – will highlight the global importance of universal social protection and showcase results from Southern countries.

“An old-age pension system which aims to cover all people… has been established in China, as well as universal health insurance coverage,” the Chinese Vice-Minister of Human Resources and Social Security, Kong Changsheng said.

While lauding the efforts made by China, Ryder said the country is regarded as an inspiring case to learn from by many ASEAN countries.

China and other countries’ recent investments in universal social protection aim to reduce poverty and inequality, build political stability, improve human capital and productivity, and increase consumption and domestic demand, important in these times of weak recovery and slow growth.

The Conference also presented many other successful examples and demonstrated that universal social protection is already a reality in many developing countries.

Indeed, the world’s population is ageing and pensions are essential for providing reliable sources of income to persons, as they grow older. Private savings can provide some security, but for most people they are insufficient to provide an adequate level of income until the end of their lives. This is why, in recent decades, many developing countries around the world have achieved universal or near universal pension coverage for all older persons, such as Bolivia, Brazil, Cabo Verde, China, Lesotho, Namibia, Timor-Leste, Thailand and South Africa.

Also, maternity allowances support women before and after giving birth. In addition, child benefits can ensure the adequate development of children, the future labour force of a country. A number of Southern countries have universal schemes for all mothers and children to improve human capital, such as Argentina and Mongolia.

Many other countries are working hard to extend social protection floors to the informal sector and rural areas, such as Cambodia, Ecuador, India, Indonesia, Uruguay and Zambia. China is taken special measures to include rural migrants in the minimum living standard guarantee (Dibao) and to give them access to subsidized health insurance and pension schemes.

ILO estimates that a universal pension for all older persons, complementing current contributory schemes, costs between 0.2 and 0.8 percent of GDP of middle-income countries, and 1.7 percent of GDP in low income countries. A complete social protection floor package for all vulnerable groups, from children and mothers to older persons, would cost between 1 and 5 percent of GDP in a large number of middle-income economies. Clearly lower income countries will take a progressive approach, building social protection gradually.

A number of innovative experiences were presented on how countries have found fiscal space for social protection, for instance, removing fuel subsidies (Indonesia), taxing natural resources (Bolivia, Zambia), taxing financial transactions (Brazil), restructuring sovereign debt (Ecuador), simplifying social security contributions (Monotax in Uruguay) and others. Mongolia is financing a universal child allowance from a tax on copper exports.

These successful examples show that in low and middle income countries universal social protection is affordable and is feasible.

The head of the ILO reminded participants of the United Nations’ Sustainable Development Goal 1.3 which calls for “nationally appropriate social protection systems and measures for all” to be reached by 2030. To support this ambitious new goal, the ILO has launched a new ‘Global Flagship Programme on Building Social Protection Floors for All’, partnering with key stakeholders.

The ILO Social Protection Floors Recommendation, 2012 (No 202) reflects the global consensus on the extension of social security to all.

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Guy RyderILO


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