The Right to Social Protection Course A402565 “Employment & Informal Economy” Ginette Forgues Manager, Social protection Programme International Training Centre of the ILO Turin, Italy, March 23, 2010

What is social protection? The vision in Year 2000 “Protection organised by society for its members through a set of public measures”* The vision ten years later See the staircase later in the presentation ____________________ *World Labour Report 2000 “ Income security and social protection in a changing world”

Social protection in the ILO One of the four strategic objectives of the Decent Work agenda ILO actively - promotes social protection policies - provides its members states with tools and assistance aimed at improving & expanding the coverage of social protection to all

ILO Strategic Objective Enhance the coverage and effectiveness of social protection for all

Thematic components of social protection in the ILO Social Security Safety and Health at Work Working Conditions International Labour Migration HIV/AIDS

Why is social protection important? A human right - UN Declaration on Human Rights, Declaration of Philadelphia, ILO standards, national constitutions, international frameworks Poverty alleviation & prevention (MDGs) – i.e social transfers

Why is social protection important? 3. Essential part of economic growth & performance – Declaration on Social Justice for a Fair Globalisation – 2008, response to the financial crisis 4. Income security - G8 statement 5. Solidarity, social justice , social consensus

What is the global situation? 20% of world population = adequate coverage 50% + of world population = no coverage Less than 10% covered in least developed countries 20 to 60% covered in middle-income countries Close to 100% covered in most industrialised countries

Options to extend coverage 1) Extending formal statutory schemes 2) Introducing community based social protection schemes 3) Extending tax financed schemes (conditional &unconditional transfers, means-tested, universal) 4) Basic social services for all

The formal social security component 1) Convention 102 is key instrument, though there are other instruments also 2) Nine contingencies 3) Social partners play a strong role in the management of social security funds

Nine contingencies in C102 Health care/insurance Sickness Old age Invalidity Unemployment Employment injury Maternity Family responsibilities Death/survivors

Benefits ILO Convention 102 Maternity Sickness Unemployment Survivors Medical care Employment injury benefits Pensions Invalidity Family allowances ILO Convention 102

Option 1: Enlarging coverage by extending formal schemes Does everyone benefit from schemes developed according to C102? No cross subsidisation for the non covered part of population (i.e informal) Primarily designed for formal economy - reaches that part of the population (employer-employee contributions) Could be extended to informal economy via premium subsidization, i.e. Ghana for its health coverage

Who is excluded? Self-employed & informal economy Workers in micro and small enterprises Temporary workers Domestic and home workers Migrant workers Agriculture, services, transport, construction, etc Indigents

Option 2: Enlarging coverage by creating schemes for the informal economy Offers possibility for increasing financial resource base, i.e. health care Offers a chance to empower demand side Some possibility to tax the informal economy, a step towards formalisation Not a stand alone solution: requires links to national agencies

The community social protection schemes Examples for access to health acre Pre-payments Cooperative social programmes Welfare Funds Traditional solidarity Community social protection

Who runs these schemes? Associations, CBOs, NGOs, cooperatives, health care providers, villages, trade unions West Africa – “mutuelles” managed by members, moving towards universal coverage Asia – NGOs, health providers, etc Note: organised by private organisations, with many variations in size, benefits & approaches

What kind of schemes? Mainly access to health care Also, life (i.e with micro-finance) Assets Combined schemes (i.e VimoSEWA) +/- 90 million people access some social protection via community schemes

3) Enlarging coverage by extending tax financed schemes Can reach out to entire population sub-groups Require basic logistical capacity Some level of social security can be afforded by all Probably the biggest potential at the moment

Cash/social transfers – some key programmes

Social Protection Floor A new instrument based on access to social services: health, education, food security, sanitation, social security, income security, etc Universal basic essential health care for all, through a set of sub-systems linked together: basically a public health service funded by taxes, social and private insurance and micro-insurance systems Basic child benefits – family/child benefits aimed at facilitating access to basic social services – food security, nutrition, education, housing

Social Protection Floor 3) Income support – access to social assistance for the poor and the unemployed in active age groups 4) Income security- for people in old age, invalidity and survivors through basic pensions

Objective of Social Protection Floor Enhance the coverage and effectiveness of social protection for all Does NOT replace C102 package but creates a minimum floor on which a country can build comprehensive social protection

Is the Floor affordable? The Social Security Dept of the ILO has conducted 22 simulations of basic social packages Results Most countries can afford some elements Institutional, political and economic environment need to be organised Capacity building increased to manage adequately

Examples of studies Africa – Burkina Faso, Cameroon, Ethiopia, Guinea, Kenya, Senegal, Tanzania Senegal – can reduce poverty by 40% with old age, disability and child benefits Tanzania – can reduce poverty by 9% with universal old age pension

Examples of studies Asia – Bangladesh, India, Nepal, Pakistan, Vietnam Latin America – study of 10 countries, modest package of conditional cash transfers, universal pensions and basic health care can be kept under 5%, while poverty can be reduced by 50%

The case of Nepal

The productivity argument Social Protection Floor can pay for itself eventually with the productivity increases it triggers If productivity increases due to basic transfers, this would translate into an increase of GDP, then transfers would pay for themselves as tax revenues increase with GDP levels

Other examples Universal pension schemes in Botswana, Brazil, Lesotho, Mauritius, Namibia, Nepal, and South Africa cost between 0.2 and 2% of GDP Pilot cash targeted transfer programme in Zambia shows that scaling it to national level costs 0.5% of GDP (GTZ study)

Success factors Political will National social protection policies and strategies, integrating Social Protection in broader economic development frameworks & comprising sequential and step by step approach with immediate, medium term and long term benefits Active role of social partners Capacity building of main actors

The vision in Year 2010 Basic coverage for all, universal but not necessarily uniform coverage (accepting pluralism) Overall responsibility rests with the state but delivery can be shared w/ private sector and communities in states

The Vision Year in 2010 3. Rights based – “Everyone has the right to social security”, Article 22 of the Universal Declaration of Human Rights 4. Social outcomes in terms of adequate benefit levels have to be reached, independent of the type of organisation. ILO conventions are important as global safeguards and benefit benchmarks.

The vision in Year 2010 5. Good tripartite and financial governance is essential – capacity building increased with that objective in mind

The social security staircase Voluntary Insurance Contributory Social Security Semi-Contributory Social Security Income and Food Security Children Benefit Assistance Unemployed & Poor Income Security Elderly & Disabled The Social Protection Floor Access to Social Services Health, Sanitation, Education

Capacity building in social protection ITC-Turin OPEN courses on pensions, social health insurance, employment injury, good governance, financing social security, extension of social protection to excluded populations Courses specifically designed for projects, organisations and institutions

Some key conventions on social security/protection Which of your countries have ratified? C102 – Convention on social security (minimum standards C121 – Employment injury C128 – Invalidity, old age and survivors C130 – Medical care C168 – Employment promotion C183 – Maternity protection

What is needed? Existing social security Conventions, and in particular C. 102 embody an internationally accepted definition of social security, have substantial influence at international, regional and national level But: fall short of providing universal access to defined basic and priority benefit package

What is coming? A new mechanism is being worked on : achieving universal access to defined priority benefits to combat poverty as fast as possible, as first step towards more comprehensive social security as defined by C. 102

Thank you!