Social Protection: Costing & Financing SP targets SPIAC-B New York, 3 February 2015 Anne Drouin, Social Protection Department International Labour Organization

2 fundamental questions: What matters when assessing the cost of SP Targets and monitoring their progress? 1)Towards Universal Coverage – No one is left out What are the needs for SP ? Is everyone covered in case of loss of income and insufficient means? Does everyone have access to health care ? 2)Towards Adequate Social protection –Is SP sufficient to meet people’s needs ?  Taking into account need to scale up resources to pay for benefits of all kinds and to invest into developing the national and local SP delivery system - Progressive or Immediate realization? 2

Building Social Security Systems for a Century

Developing Countries Increasing Social Protection Selected Countries, 2011 Increase in public social protection expenditure ratios (%GDP), selected middle-income countries, 2000-latest year Source: ILO World Social Protection Report

. How older poor spend pension cash transfer  Child and family benefitsArgentina, China, Mongolia, Mozambique, Nepal, Niger, Senegal, South Africa Cash transfers with human development focus Argentina, Bangladesh, Brazil, Colombia, Ecuador, Ghana, Honduras, Indonesia, Jamaica, Kenya, Malawi, Mexico, Mongolia, Nicaragua, Philippines, Tanzania Household minimum support income Chile, China, Ghana, Mozambique, Rwanda, Uganda, Zambia Public employment programmes Argentina, Benin, Cameroon, Ethiopia, Ghana, India, Indonesia, Malawi, Niger, Rwanda, South Africa, Tanzania Maternity protectionArgentina, Bangladesh, Bolivia, Ghana, India, Indonesia, Jordan, South Africa Social pensionsArgentina, Bangladesh, Bolivia, Botswana, Brazil, Cabo Verde, Chile, China, Costa Rica, India, Kyrgyzstan, Lesotho, Mauritius, Moldova, Namibia, Nepal, Panama, Peru, Samoa, Sierra Leone, South Africa, Tajikistan, Tanzania, Thailand, Vietnam Health coverage expandedArgentina, Brazil, Burundi, Cambodia, Chile, China, Colombia, Ghana, Lao PDR, Indonesia, Mexico, Morocco, Thailand, Rwanda Unemployment protectionJordan, Saudi Arabia, South Africa, Thailand, Vietnam Expansion of Cash Transfers in Middle and Low Income Countries

Universal Social Protection: Mixed approaches Combining Non-contributory SP Floors and Contributory Systems   How to better engage with other government ministries beyond Ministry of Labour?

100 Countries Reducing Universal Food and Fuel Subsidies sometimes targeted safety nets to the poor as compensation -- insufficient, punishing “middle classes” Fuel Subsidies in %GDP selected countries, 2012 or latest - Higher food and transport costs: Less household income - Higher energy costs – Negative impact on economic activity, employment, domestic demand

Social protection is an investment in people Source: ILO, World Social Protection Report

Is Universal Social Protection Affordable in Developing Countries? Source: ILO 2014, Geneva Cost of universal pension coverage 65+, National poverty line (% of GDP)

FINANCING SOCIAL PROTECTION Fiscal policy space options exist even in the poorest countries 1)Increasing social insurance coverage for self-financed contributory benefits for those who can afford their social protection 2)Re-allocating public expenditures (eg subsidies) 3)Better taxation systems  increasing central tax revenues 4)Increased aid and central budget transfers to support national priorities for sustainable state capacities … especially in fragile states requiring kicking off SP institutions 5)Fighting illicit financial flows 6)Tapping into fiscal and foreign exchange reserves 7)Debt restructuring to allow investment into SP bringing back economic and fiscal returns 8)Adopting a more accommodative macroeconomic framework

Fiscal Space Strategies for Social Protection: Country Examples Source: ILO, World Social Protection Report

ILO Social Protection Floor Cost Calculator 12 Welcome to the Social Protection Floor Cost Calculator!  Selection of countries  Selection of SPF Income Security & In-kind Benefits o Children o Youth Unemployed - PWP’s o Women & Maternity o HIV/AIDS victims o Disabled persons o Elderly  Coverage Definition  Universal  Targeted  Benefit Adequacy Definition  National Poverty Line  Other ref.

13 ILO Social Protection Floor Cost Calculator An example

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