World Social Protection Report 2014/15
ILO: Invest more in social protection
Social protection systems are at risk as a result of fiscal consolidation. Governments must continue to protect and expand their programmes to aid with crisis recovery, inclusive development and social justice.
The unwinding of social security protections in many countries since 2010 has contributed to increased poverty and social exclusion. It’s a phenomenon that is widespread amongst developed and developing countries alike according to the latest World Social Protection report released by the International Labour Organization.
According to the report as many as 122 countries, including 82 developing economies, have in recent years been contracting their social protection budgets. Isabel Ortiz, Director of the ILO Social Protection Department, says that it's a trend that can be traced back to the financial crisis of 2008:
"Fiscal stimulus plans were launched between 2008 and 9 and we estimate that social protection was about 25 per cent - a quarter – of all the fiscal stimulus plans. The problem comes after 2010, and then most governments start embarking on fiscal consolidation policies. ….in the report we present that a large number of countries are adjusting their expenditures by doing reforms to the welfare systems, including pension reforms and adjustments to the health care systems. A significant number of developing countries are phasing out subsidies, eliminating them, and also cutting the wage bill, this means the number or the salaries of health, education and other social workers - civil servants in general - that are very much needed for human development."
Such fiscal contractions have contributed to increasing poverty rates in many countries. Children particularly are at risk. According to the report child poverty increased in 19 of the 28 countries of the European Union between 2007 and 2012.
ILO Deputy Director-General, Sandra Polaski, speaking at the launch of the report noted that currently only 27 per cent of the global population has access to comprehensive social protection, this despite access to social protection being recognised in the 1948 Declaration of Human Rights:
"For the large majority of the global population the fundamental human right to social security is not realised at all or only in a partial way that leaves billions of people insecure."
Quite apart from the arguments of principal for social security coverage there is a sound economic case to maintain support for such programmes during times of economic difficulty. The lessons of the last decade have cause a reevaluation of policy, according to Deputy Director-General Polaski:
"Well, I think one of the things that we have seen is that the fiscal consolidation, which was undertaken by a number of governments, actually led to double dip recessions. So that at a minimum one can say it was too soon, if we look at the lessons of history where a slack in private demand can be addressed by expanding government demand for a period of time until the private sector can get its momentum - it's sea legs - it's momentum back...clearly the sense of timing was off there, the cutbacks came too soon, in terms of public budgets, in terms of public stimulus and we saw double dip recessions in a number of countries. Even beyond that I think that the withdrawal of stimulus, the over-ambitious and too soon fiscal consolidation is a key factor in explaining the slow growth patterns that we are seeing around the entire world now."
Not all countries have been reducing benefits. The report notes that China has achieved nearly universal coverage in old-age pensions in recent years. Brazil, other medium level economies, and even some low income countries have been expanding their social protection.
Reporting for ILO radio in Geneva, this is Pete Forster.
According to the report as many as 122 countries, including 82 developing economies, have in recent years been contracting their social protection budgets. Isabel Ortiz, Director of the ILO Social Protection Department, says that it's a trend that can be traced back to the financial crisis of 2008:
"Fiscal stimulus plans were launched between 2008 and 9 and we estimate that social protection was about 25 per cent - a quarter – of all the fiscal stimulus plans. The problem comes after 2010, and then most governments start embarking on fiscal consolidation policies. ….in the report we present that a large number of countries are adjusting their expenditures by doing reforms to the welfare systems, including pension reforms and adjustments to the health care systems. A significant number of developing countries are phasing out subsidies, eliminating them, and also cutting the wage bill, this means the number or the salaries of health, education and other social workers - civil servants in general - that are very much needed for human development."
Such fiscal contractions have contributed to increasing poverty rates in many countries. Children particularly are at risk. According to the report child poverty increased in 19 of the 28 countries of the European Union between 2007 and 2012.
ILO Deputy Director-General, Sandra Polaski, speaking at the launch of the report noted that currently only 27 per cent of the global population has access to comprehensive social protection, this despite access to social protection being recognised in the 1948 Declaration of Human Rights:
"For the large majority of the global population the fundamental human right to social security is not realised at all or only in a partial way that leaves billions of people insecure."
Quite apart from the arguments of principal for social security coverage there is a sound economic case to maintain support for such programmes during times of economic difficulty. The lessons of the last decade have cause a reevaluation of policy, according to Deputy Director-General Polaski:
"Well, I think one of the things that we have seen is that the fiscal consolidation, which was undertaken by a number of governments, actually led to double dip recessions. So that at a minimum one can say it was too soon, if we look at the lessons of history where a slack in private demand can be addressed by expanding government demand for a period of time until the private sector can get its momentum - it's sea legs - it's momentum back...clearly the sense of timing was off there, the cutbacks came too soon, in terms of public budgets, in terms of public stimulus and we saw double dip recessions in a number of countries. Even beyond that I think that the withdrawal of stimulus, the over-ambitious and too soon fiscal consolidation is a key factor in explaining the slow growth patterns that we are seeing around the entire world now."
Not all countries have been reducing benefits. The report notes that China has achieved nearly universal coverage in old-age pensions in recent years. Brazil, other medium level economies, and even some low income countries have been expanding their social protection.
Reporting for ILO radio in Geneva, this is Pete Forster.