In the Americas and the Caribbean

There is no standard model for social protection systems in the Latin American region. They have evolved in line with the various levels of socio-economic progress and stages of historical development of the different countries. Countries such Argentina, Brazil, Chile and Uruguay gradually introduced coverage against certain risks for various groups of workers in a fragmented manner, from the early twentieth century onwards. Typically, better coverage was first extended to those workers with greater capacity with organization and means of pressure on the government. Other countries, such as Costa Rica, Panama, Mexico, Peru, Colombia, Bolivia, Ecuador, Paraguay and Venezuela, gave priority to the prevention of poverty, the provision of uniform benefits, eligibility based on need and/or residence, and financing based on taxation. There is a third group of late social security developers, which includes the Dominican Republic, Guatemala, El Salvador, Nicaragua and Honduras. Although there are significant differences between the countries included in this group, all their social protection programmes were developed mainly from the 1960 and 1970 onwards. This simplified picture of the systems which existed in the various countries of the regions was in many cases changed by the reforms of the 1990’s, which tended towards privatization of part of the administration of certain schemes such pensions, health and employment risks.

Retirement and pension schemes are the most visible and controversial of the programmes designed to cover specific social risks which have undergone reform in the past two decades. Structural reforms in pension systems have brought major change in how benefits are related to contributions. Most of the reforms have to some extent included individual funded schemes ("pillars" or "tiers"). Some replacement solutions have meant closing the public system and replacing it with a fully funded individual scheme (Chile, 1979-1981; Mexico, 1995; Bolivia, 1996; El Salvador, 1996). There are mixed schemes which have a fully individual tier as an integral part of a reformed public tier (Argentina, 1993; Uruguay, 1995; Costa Rica, 2002). Finally, there are parallel systems that have introduced an optional fully funded individual tier in parallel with a reformed public tier (Peru, 1992; Colombia, 1993).

In the Latin American countries, the health care schemes have been traditionally under the responsibility of the public sector. But these schemes have had major shortcomings such as low coverage rates, unbalanced budgets, inadequate funding and poor management and in the 1990’s, a number of countries began to reform their social security health care schemes. Examples of the reforms are found in Chile where a dual private-public system exists with ISAPRES (Instituciones Prestadoras de Servicios de Salud) and FONASA (Nacional de Salud) and Colombia, where besides the traditional social security health care institutions, there are the Empresas Gestoras del Aseguramiento de la Salud (GESTARSALUD), institutions authorized by the Government to manage the health care benefits.

Social assistance and universal social welfare programmes have also played a major role in the history of the region. In the course of their evolution, systems have moved away from programmes based on cash transfer and using various targeting methods, for example, means testing or auto-selection mechanisms, towards programmes based on new institutional approaches which oblige recipients to fulfil certain preconditions in order to receive benefits. In some cases the programmes combine health, education and nutrition components. Some examples of this type of programmes are: Mexico's Programa de Educación, Salud y Alimentación (PROGRESA), launched in 1997; Colombia's Familias en acción programme (FA); Honduras' Programa de Asignación Familiar (PRAF); Ecuador's Bono de Desarrollo Humano; Chile's Subsidio Unitario Familiar and the recent one, Brazil's Bolsa Familia programme.

As far as unemployment insurance mechanisms are concerned, although, most countries in the region do not have or were not able to implement them, there are some programmes which provide assistance to alleviate the hardship caused by this contingency. In general, they are direct employment and social assistance programmes for unemployed workers which have been established in order to contribute to reduce the high rates of employment in the countries of the region. Examples of these programmes are found in Argentina; Bolivia; Chile; Peru; Uruguay.

The main challenges facing social protection in the region are the following:

• The first one is of external nature and it is the macroeconomic instability;
• The second challenge has to do with the institutional aspects of social security (regulation, supervision);
• The most important challenge faced by social security in the region which on the other hand has been widely recognized at all levels is the extension of coverage of the schemes. On average, fewer than two out of four workers in the region have access to current social security schemes;
• The fourth challenge is the reduction of inequalities in the access to benefits provided by the systems.

Social security is a key component of the ILO's overall goal of decent work. In fact, to enhance the coverage and effectiveness of social protection for all is one of the strategic objectives of the Organization. In line with this and in view of the challenges faced by social security in the Latin American region, the Social Security Department of the ILO will continue to work in different countries such as Argentina where the technical assistance is being focussed in the eventual reform of the pension system, Chile, where the ILO is also working on issues related to the pension schemes, Ecuador, where the intervention of the ILO has been requested for assisting in the reform of the social security system, Nicaragua, where the ILO is providing advice for the reform of the pension schemes, Peru, where our efforts are focussed on the extension of the healthcare scheme and Uruguay, where the ILO and the main institution for social security in Uruguay have just signed a Cooperation Agreement in the field of social security.

Note: This information draws largely from the articles of the Special double issue Social Security in Latin America, ISSA International Social Security Review, Vol. 58, No. 2-3, April-September 2005.