Krzysztof Hagemejer

Changing the Development Policy Paradigm: Investing in Social Security Floor for All

The Paper briefly reviews social security coverage that the world has achieved and summarizes economic and social benefits of a national social security system. It then goes on to argue that social security systems are a necessary part of the institutional framework of any effective market economy, creating - among other things - societal cohesion that is needed for long-term economic development. It makes the case that the introduction of basic social protection in developing countries is both a desirable and an affordable investment in their social and economic development. It estimates the global minimum investment cost to provide basic social security and finally suggests international instruments to introduce a global social security floor.

Social Security in Times of Crisis

To counter the negative social consequences of the present crisis, States must take measures to provide income support and new employment opportunities to affected workers and their families. This article reviews crisis responses in a number of countries with respect to support from unemployment programmes, the branch of social security most directly affected by economic downturn. It also discusses the trade offs that all social security schemes face during economic crises, when revenues from contributions or taxes earmarked to finance programmes fall and expenditures on benefits rise. In turn, concerns about pension policies receive special attention. The article concludes by discussing the initiative, launched by the United Nations, for a global “social protection floor”: to extend, at the very least, basic social protection to the large majority of the worlds population who are currently without and who remain vulnerable to all economic and social risks.

The role of national social protection floors in extending social security to all

In June 2011 the International Labour Conference (ILC) adopted a Resolution and Conclusions setting out the Organizations new social security strategy, which aims at supporting Members in building and maintaining comprehensive social security systems on the basis of a two-dimensional approach: (1) (“horizontal” dimension) establishing – as a priority – nationally-defined sets of basic social security guarantees to provide a floor of protection to all in need as soon as possible; (2) (“vertical” dimension) extending the scope and levels of social security coverage as guided by Convention No. 102 (1952) and other existing social security standards to as many people as possible and as soon as possible. In June 2012, the ILC completed this strategy with a new international labour standard: Recommendation concerning national floors of social protection, 2012 (No. 202). The Recommendation is deemed a breakthrough in global social policy, whereby the establishing of national social protection floors may close prevailing gaps in social security coverage and help countries to effectively address poverty and vulnerability. This special double issue offers analysis of the process that culminated in the Recommendations adoption and addresses practical fiscal, legal, political and institutional challenges that must be addressed if the Recommendations goals are to be successfully implemented.

Can Low-Income Countries Afford Social Security?

Proposals to accelerate the establishment of social protection systems in low-income countries have gathered strength in the early years of the twenty-first century. These proposals are being subjected to searching questions. One major question concerns ‘affordability’ — with which this chapter seeks to deal.

Social Security for All: Investing in Global Social and Economic Development: A Consultation

This paper seeks to explore the framework within which the International Labour Office should promote a principled, practical approach to social security policy in the new millennium. Integration has to be built around a joint coherent policy vision and building such a policy vision requires debate. This paper is a product of a joint effort of members of the ILO Social Security Department and social security specialists working in the ILO field offices.

Social security: Three lessons from the global crisis

The global financial and economic crisis has given new impetus to the debate on social security policies. Countries that had social security programmes in place strongly relied on them as automatic stabilizers in their stimulus packages. Where countries affected by the crisis did not have adequate social security mechanisms, the need to develop social security became more apparent. As a result, a number of social protection policy initiatives have begun or been stepped up at national, regional and global levels, including the UN Social Protection Floor Initiative and the Global Jobs Pact. Positive changes had begun in many developing countries well before the crisis. But a large social security coverage deficit still prevails (ILO, 2010f; UNRISD, 2010). In many countries only a minority of the population has access – both statutorily and effectively – to existing schemes. Figure 12.1 shows the scope of statutory coverage through social security schemes around the world. It can be seen that in Asia, Africa and some parts of Latin America in particular there are large gaps in the scope of social security schemes statutorily available. It is estimated that only one-fifth of the global working-age population and their families have effective access to comprehensive social protection (ILO, 2010f, p. 1). The social security deficit is one of the main obstacles to achieving the Millennium Development Goals (UN, 2010). 12

Social Budgeting in Transition Economies

The first part of this paper portrays social budgeting as a pivotal tool in national social governance. The second explains the meaning of social budgeting, which, essentially, consists of two elements: a database and a set of interdependent tools for projecting social protection revenue and expenditure. The third part discusses the particular needs of the transition economies with respect to the financial planning of social protection, and it is argued that countries need models for social budgeting as a technical, non-ideological tool in order to prudently run social protection systems which are income redistribution mechanisms of potentially vast dimensions. The fourth part broadly explains the modular structure of the model, the advantage of this structure being that modules can intelligently be used as stand-alone submodels. It also further discusses the particular advantages of social budgeting in countries in transition and includes a number of examples of technical adjustments that would have to be made to the model structure when applying it in the context of transitional economies. The two main reasons for such adjustments are identified as the fast change of their socio-economic fabric over the past decade and the (related) changes in the collection and flow of data. The fifth part briefly presents social budget modelling projects implemented in central and eastern Europe, particularly focusing on the examples of Ukraine and Poland. Scenario simulations and policy experiments are presented and discussed. The conclusions summarize the advantages of social budgeting, using the ILO Social Budget Model (or a variant of it) in national and international contexts, and indicate the conditions required for successful implementation.