Social Protection Global Technical Team Geneva, 15-17 March 2017 Group Work Fiscal Space: Engaging with the IMF and Ministries with Finance Social Protection Global Technical Team Geneva, 15-17 March 2017

Why MOF, IMF control finance, often fiscal consolidation and restrictive macroeconomic view Now also social security reforms pension reforms in 105 countries Proposed Structural Reforms Initiative – labor reforms + cutting labor taxes (employers social security contributions) Implicit pension debt and pension liabilities – countries are required to report on this (IMF Statitstics)

Main ILO Messages: Fiscal Space for Social Protection Floors Exists Even in the Poorest Countries There is national capacity to fund social protection floors in virtually all countries. There are many options, supported by UN and IFIs policy statements: Re-allocating public expenditures (eg subsidies) Increasing tax revenues Expanding collection of social security contributions Fighting illicit financial flows Lobbying for increased aid and transfers Tapping into fiscal and foreign exchange reserves Managing debt: Borrowing or Restructuring debt Adopting a more accommodative macroeconomic framework (e.g. tolerance to some inflation, fiscal deficit) Source: “Fiscal Space for Social Protection: Options to Expand Social Investments in 187 Countries” ILO 2015

Main ILO Messages (II) Investment case, aggregate demand, returns to growth, human capital, addressing inequality, supporting political stability Social security reform: importance of respecting ILO principles, conventions and recommendations Importance of tripartite dialogue Importance of both benefit adequacy and sustainability of social security systems, for this employers contributions fundamental

How (I) Country level: better to start engaging with Ministries of Finance Not just lobbying, but also offering our expertise – eg not just lobbying for more funding but suggesting with analytical work: Areas of fiscal space (eg taxation, subsidy reforms etc) Direct and indirect economic and social impacts Costing and expenditure projections of social protection Impact evaluations, ex-ante modeling IMF Resident Representatives are PR – the real decisions taken in Washington, need to contact the IMF HQ country economist who takes all the decisions It is easier if we engage with a High Level Development Partners Groups (eg Mozambique Budgetary Advisory Group, in Zambia is called High Level Cooporating Partners Group). Have High Level (and low level) dialogue between IMF HQ and ILO HQ HQ/GTT articulate ILO positions and guiding materials

How (II): National Dialogue Decisions affecting people’s welfare are often taken behind closed doors, without adequate consideration of their distributional impacts. Ministers of Finance/Planning should have all possible fiscal scenarios and options, associated social impacts, risks and trade-offs, fully explored. A set of alternative policy options for inclusive development should be discussed in national social dialogue. Training and guiding materials for social partners, journalists, Parlamentarians important; social partners can press government so the space for dialogue Can use international NGOs that are very vocal