Eduardo Klien HelpAge International Social Protection Floor Initiative Hong Kong, June 2010 Social Cash Transfer as a Tool for Social Protection

Outline Why are Social Cash Transfers (SCT) important? Indications of impact What triggers decision-makers in adapting SCT?

Why are they important in the scope of the SPF-I? Social fairness Inequalities create instability China’s commitment to social harmony implies redistribution of wealth. SCT is a way Economic reasoning Direct contribution to growth and development of local markets Healthier and more educated workforce Political common-sense Design of schemes needs to consider political support Universal approaches gain more support and are less vulnerable to corruption

Evidence of measurable improvement Education - Enrolment & attendance duration in Mexico, Brazil, Nicaragua, Zambia, Bangladesh Health & Nutrition - Increase in height, weight and improvement in nutrition in Colombia, Chile, Malawi, South Africa

Evidence in poverty reduction South Africa Social Transfers Source: UNDESA, 2009

One type of SCT: Social Pensions The challenge of ageing 350 million older people lack income security In Asia only 1 out of 5 reach old age with some formal pension

Trends in Ageing Dynamic pyramids, change every 5 years Japan Bangladesh South Africa

Ageing 700 billion by 2050 in Asia (50% of total) Growth of older old - 1 out of 2 Japanese born today will live up to 100 years Feminisation of old age - 67 men for every 100 women in developing countries Poverty in old age - Generally larger proportion than non-olds. More vulnerable

How are Social Pensions distributed? Source: UNDESA, 2009

How are Social Pensions distributed? Source: UNDESA, 2009

Are Social Pensions affordable? Nepal – less than 1% of GDP Vietnam – 0.12% of GDP Thailand – 0.5% of GDP Zambia – Pilot in Kolomo – if expanded it would cost 0.5% GNI

Key determinant Political will

Social Pensions in the last 3 years (In Asia) Philippines – Approval of a means-tested pension scheme for 1.7 million Vietnam – Reduction of age of entry to 80 years and increase in the amount (200%) – Decree 67 Nepal – Reduction of age of entry from 75 to 70 years and increase in amount Thailand – Increase in coverage from 1.8 to 5.4 million older people

What triggers decision-makers? Governments are the decision-makers Motivations vary: Understanding of social pensions as a tool for development Political pressure depending on contexts political opportunity Commitment to fairness It helps: Research on specific contexts Evidence of positive impact helps decision making Building scenarios of affordability through microsimulation can dissipate fears of insolvency Building capacities Targeted processes, mainly at government levels Necessary involvement of Ministries of Finance, Planning and Social welfare. Not prescriptive training but building and understanding of options mechanisms Involving civil society As a force to support and influence Cannot work isolated from governments Voice of rights, depending on contexts Use of the media To expand social acceptance and social pressure To share experiences form elsewhere To provide a voice form the demand side Building Alliances Networks, academics, sectors within government, political parties

Thank You