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Social protection floor key to addressing crises and social instability

A high-level panel headed by the former President of Chile, Michele Bachelet, delivered a ground-breaking report to UN Secretary-General, Ban Ki-moon, arguing that a social protection floor could boost economic growth and enhance social cohesion.

Press release | 27 October 2011

NEW YORK (ILO News) – A high-level panel headed by the former President of Chile, Michelle Bachelet, delivered a ground-breaking report to UN Secretary-General, Ban Ki-moon, arguing that a social protection floor could boost economic growth and enhance social cohesion.

The report, “Social Protection Floor for a Fair and Inclusive Globalization” was immediately welcomed by several world leaders including Brazilian President Dilma Rousseff and French President Nicolas Sarkozy, as well as other prominent leaders in the world of work.

In his statement, Mr. Ban said, “This is a crucial report that comes at a critical time. People everywhere are anxious about the future, frustrated about the economy, and upset with leaders. Achieving social protection for all is critical to building fairer, more inclusive and equitable societies.”

The new report says an estimated 5.1 billion people lack adequate social security or social protection worldwide, while just over 15 per cent of the world’s unemployed worldwide are receiving some form of unemployment benefits.

Preliminary conclusions of the report were presented to the G20 labour ministerial meeting in Paris in September, and garnered an immediate pledge by the group to support new measures aimed at extending social protection worldwide as a means of reducing poverty, stimulating economies and hedging against the impacts of economic crises.

“Extending social protection is a ’win-win’ investment that pays off both in the short term, given its effects as a macroeconomic stabilizer but also in the long term, due to the impacts on human development and productivity” Ms. Bachelet said.

The report also finds that social protection programmes can act as stabilizers attenuating the adverse impact of economic crises on labour markets while contributing to maintaining social cohesion and stimulating aggregate demand

The report calls on the G20 leaders summit in Cannes on 3-4 November to consider an “action plan” for implementing social protection floors through existing and new financing mechanisms. It shows that some countries – such as El Salvador, Benin, Mozambique and Vietnam – could provide a major social protection floor for as little as 1 to 2 percent of GDP. The report shows that nationally-designed social protection floors are affordable even in low income countries

“Social protection floors are necessary, feasible and effective”, said the Director-General of the ILO, Juan Somavia, which developed the social protection floor approach together with other UN partners. “Cuts in social protection programmes as part of fiscal consolidation packages might weaken the recovery.”

The report drew strong international support, with Brazilian President Roussef saying “Brazil is committed to the implementation of the social protection floor. The work of the Commission chaired by Michelle Bachelet represents an important contribution to advancing discussions on this issue and to improving social policies around the world.”

French President Sarkozy stated “Building up a social protection floor in each country will take time. Certainly we cannot impose upon the poorest countries the standards and social systems of the wealthiest. But progress must be made.”

Mr. Somavia said “By reaffirming their commitment to extend social protection, G20 leaders can contribute to restore people’s confidence, which is a prerequisite to market confidence. I will attend the Cannes summit and insist that these recommendations, which are directly connected to the ILO Decent Work Agenda and the need for social justice, are considered as an integral part of the discussions.”

The ILO’s annual International Labour Conference in 2012 is to consider a new international labour standard on social protection floors. 

Social protection – and in particular the concept of a social protection floor – has been increasingly recognized as a key development instrument at different international fora, most recently at the UN Millennium Development Goals Summit in September 2010.

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The UN has designated the social protection floor as one of its nine crisis response initiatives. Led by the ILO and the World Health Organization (WHO), the Social Protection Floor Initiative aims to promote a set of basic social security rights and transfers, as well as essential services in the area of employment, health, water and sanitation, nutrition, education and family-support to protect and empower poor and vulnerable people to work out of poverty.

The Social Protection Floor Advisory Group was convened in August 2010 by the ILO with collaboration from the WHO under the framework of the United Nations System Chief Executives Board for Coordination (UNCEB) Social Protection Floor Initiative to enhance global advocacy and provide guidance on the conceptual and policy aspects of the social floor. In addition to the chair, Ms. Bachelet, members include: Aurelio Fernández López, Ebrahim Patel, Eveline Herfkens, Kemal Dervis, Margaret Wilson, Martin Hirsch, Sudha Pillai, Zheng Silin. Ex-officio members: Juan Somavia, Margaret Chan. Vinícius Pinheiro of the ILO is Executive Secretary.