Abstract
On 30 June 2015, the global audience became a witness to a major policy shift within the World Bank Group – for the first time, it explicitly endorsed universal social protection as a primary development priority. The joint statement issued in Geneva by the heads of the two global agencies – the World Bank Group President Jim Yong Kim and International Labour Organization (ILO) Director General Guy Rider – called the attention of world leaders to the importance of universal social protection and financing. While universalism has been a pre-eminent policy concern for the ILO for many years, and the Declaration of Philadelphia dated 1944 recognized the obligation of the ILO to contribute to achieving ‘the extension of social security to provide a basic income to all in need of such protection and comprehensive medical care’, for the World Bank – with its strong emphasis on ‘social risk management’, targeted income support and access to basic social services to the poorest population groups, under the overall umbrella of promoting ‘safety nets’ – this policy shift sounds truly tectonic.
With due applause for this bold initiative, which the International Council on Social Welfare (ICSW) fully supports, we hope that these commitments will help both organizations in shaping effective country-specific policy advice, facilitating national efforts to find the most appropriate and effective ways and means of social protection for all, while providing at the same time a tangible boost to interagency cooperation in the area. A joint mission statement by the heads of ILO and the World Bank is illuminating in this regard and deserves to be explored at length.
Called ‘A joint mission and plan of action: Universal social protection to ensure that no one is left behind’, the World Bank Group and the ILO stated that they share a vision of social protection for all, a world where anyone who needs social protection can access it at any time (accessed at: http://www.ilo.org/global/about-the-ilo/who-we-are/ilo-director-general/statements-and-speeches/WCMS_378984/lang–en/index.htm).
The emergence of the new development agenda that is being defined by the world community, the Sustainable Development Goals (SDGs), provides an unparalleled opportunity for ILO and the World Bank to join forces to make universal social protection a reality, for everyone, everywhere.
It is underscored that universal coverage and access to social protection are central to ending poverty and boosting shared prosperity, which are the World Bank Group’s twin goals by 2030. Universal social protection coverage is at the core of the ILO’s mandate, guided by its standards, including the Social Protection Floors Recommendation No. 202, adopted by 185 states in 2012.
Proving a common definition of universal social protection, both organizations refer to ‘the integrated set of policies designed to ensure income security and support to all people across the life cycle – paying particular attention to the poor and the vulnerable’. Anyone who needs social protection should be able to access it. Specifically, universal social protection includes ‘adequate cash transfers for all who need them, especially children; benefits and support for people of working age in case of maternity, disability, work injury or for those without jobs; and pensions for all older persons’. This protection can be provided through social insurance, tax-funded social benefits, social assistance services, public works programs, and other schemes guaranteeing basic income security.
Therefore, universal social protection is set at the radar screens of both stakeholders as a goal that both international entities strive to help countries deliver. The benefits are many: ‘social protection systems that are well-designed and implemented can powerfully shape countries, enhance human capital and productivity, eradicate poverty, reduce inequalities and contribute to building social peace’. They are an essential part of National Development Strategies aimed at achieving inclusive growth and sustainable development with equitable social outcomes. Both organizations state that they ‘are proud to endorse the consensus that has emerged in the early 21st century that social protection is a primary development tool and priority’.
The statement notes a paradigm shift in welfare approaches. Since the 2000s, ‘universality has re-entered the development agenda’. First, it was education: universal primary education became a Millennium Development Goal in 2000. In 2012, the United Nations (UN) General Assembly adopted a resolution endorsing universal health coverage. Now it is time for universal social protection. Major international bodies – the African Union, the Association of Southeast Asian Nations (ASEAN), the European Commission, G20, the Organisation for Economic Co-operation and Development (OECD), and the UN – have all endorsed universal social protection. The importance of joining forces to make it happen is obvious and its importance cannot be overestimated.
Social protection systems, including social protection floors, figure prominently among the SDGs: for example, Goal 1 – End poverty in all its forms everywhere – contains reference to implementation of nationally appropriate social protection systems and measures for all, including floors, and achieving, by 2030, substantial coverage of the poor and vulnerable (see http://www.un.org/pga/wp-content/uploads/sites/3/2015/08/120815_outcome-document-of-Summit-for-adoption-of-the-post-2015-development-agenda.pdf).
Social protection policies also feature in goals to achieve gender equality and to reduce income inequality. Joining forces to reinforce this universal aspiration, to be applicable to all countries regardless of income level, the ILO and the World Bank Group underscore in the statement that ‘now it is time to ensure that the international community has the means to make this vision a reality’. Setting objectives to increase the number of countries that provide universal social protection, supporting countries to design and implement universal and sustainable social protection systems, both international entities stress flexibility in the approach: ‘There are many paths toward universal social protection. It belongs to each country to choose its own, and to opt for the means and methods that best suit its circumstances.’ One-size-fits-all solutions practiced by some key development organizations in the past are clearly not an option in the contemporary world.
The Concept Note issued simultaneously with the above Joint Statement (see http://www.ilo.org/global/topics/social-security/WCMS_378991/lang–en/index.htm) is an important document on its own, containing some critical elements underpinning the thrust of the Statement and its inner logic. For example, asking a rhetorical question – ‘Why support universal social protection?’ – the Concept Note refers to ‘considerable rigorous scientific evidence that well-designed and implemented social protection systems can be the foundation for sustained social and economic development – for individuals, communities, nations and societies’. Among those are the following factors:
It prevents and reduces poverty, and promotes social inclusion and dignity of vulnerable populations.
It contributes to economic growth: raising incomes increases consumption, savings, and investment at the household level, and raises domestic demand at the macro-level.
It promotes human development: cash transfers facilitate access to nutrition and education, thus resulting in better health outcomes, higher school enrollment rates, reduced school drop-out rates, and a decline in child labor.
It increases productivity and employability by enhancing human capital and productive assets.
It protects individuals and families against the losses due to shocks, whether they be pandemics, natural disasters, or economic downturns.
It builds political stability and social peace, reducing inequalities, social tensions, and violent conflict; social protection ensures greater social cohesion and participation.
It is a human right that everyone, as a member of society, should enjoy, including children, mothers, persons with disabilities, workers, older persons, migrants, indigenous peoples, and minorities.
Today, nearly 30 low- and middle-income countries have universal or nearly universal social protection programs. Over 100 others are scaling up social protection and fast-tracking expansion of benefits to new population groups. Universal social protection is most commonly achieved for old-age pensions. Universal social protection for children is also a reality in some countries.
Recognizing importance of national ownership of development processes toward universalism as well as the heterogeneity in the design and implementation of universal schemes, countries have a wide set of options to achieve universal social protection coverage. The Concept Note emphasizes, Generally, universality is achieved by combining contributory and non-contributory schemes. For instance, the People’s Republic of China has achieved nearly universal pensions by complementing social insurance with social pensions in rural areas. Other countries like Bolivia provide tax-financed universal benefits to all older persons. Some countries choose gradual and progressive realization and others opt for immediate universal coverage.
The funding of social protection remains one of the key issues. The Concept Note underscores that ‘countries have used many options to finance universal social protection coverage’, such as
re-allocating public expenditures;
increasing tax revenues, including revenue generated from taxation of natural resources;
using the reductions of debt or debt servicing;
expanding social security coverage and contributory revenues.
The variety of universal social protection programs needs to be sustainable and equitable, taking into account the contributory capacity of different population groups. Better enforcement of tax and contribution obligations ensures that a broader and sufficiently progressive revenue base can accelerate progress toward universal social protection coverage. Enforcement of social security revenue collection may result in higher tax collections, particularly in countries with young demographic pyramids. Higher tax revenues can in turn support the promotion of statutory programs. For those poor and unable to contribute, governments have to identify sustainable sources of fiscal revenue (http://www.ilo.org/global/topics/social-security/WCMS_378991/lang–en/index.htm).
In summary, the Concept Note underscores that achieving universality would facilitate the delivery of the World Bank’s corporate goals of reducing poverty and increasing shared prosperity and the ILO’s mandate of promoting decent work and social protection for all. It also recognizes that ‘there are large synergies and advantages if the ILO and World Bank collectively support the development of universal social protection systems in countries, with a focus on sustainable domestic financing’. Committing to the specific, timebound actions, the two organizations declared that they will work together to achieve this shared vision until the SDGs are realized. In the short term, after the initiative has been launched on 30 June 2015 and the shared vision has been put forward, the ILO and the World Bank aim to outline tangible activities to advance universal social protection both in the lead-up to and following adoption of the post-2015 development agenda. Both international entities aim at documenting country experiences on universal social protection coverage, presenting succinct case studies on how countries achieved universal social protection coverage, and extracting good practices relevant for other countries – analyzing the financing implications of universal social protection, together with the generation of evidence about ways this can be innovatively resourced and other topics important to generate political will such as the investment case and socio-economic benefits of providing universal social protection. A monitoring framework for universal social protection in the post-2015 agenda will be a part of the ongoing collaboration on social protection statistics. A global conference on universal social protection for inclusive and sustainable growth will be convened in 2016. It is conceived as a high-level public event, presenting the country case studies, the joint framework for monitoring progress, and launching a Global Observatory for Universal Social Protection for public monitoring and reporting on agreed targets. In the medium term (1–15 years), the World Bank and the ILO will use their individual and collective resources and influence to support countries in their move toward providing universal coverage. This will include joint support to countries in their efforts to harmonize social protection policies, programs, and administration systems; expanding fiscal space for universal social protection, addressing bottlenecks; and adequately integrating universal social protection into their national development strategies.
The universal social protection should be and will be considered in the context of the Post-2015 Development Agenda which has been in the making over the last two years. The pursuit of ambitious new development goals – the SDGs, under the auspices of the UN – provides new opportunities to governments, the private sector, and civil society organizations in mobilizing resources and acting together. But it also gives civil society organizations worldwide new opportunities in monitoring the implementation of ambitious commitments at all levels, bringing attention to gaps and lapses, as well as suggesting new tools and approaches.