How to finance, deliver and govern social security for all - - PowerPoint PPT Presentation

International Labour Office

How to finance, deliver and govern social security for all…

1

The ILO Campaign on Social Security and Coverage for All Tripartite Meeting of Experts on Strategies for the Extension

• f Social Security Coverage

Geneva, 2-4 September 2009 Michael Cichon Social Security Department International Labour Office

International Labour Office

Structure of the presentation

One: Social security is an economic necessity Two: Social security is fiscally affordable

2

The ILO Campaign on Social Security and Coverage for All

Two: Social security is fiscally affordable Three: Financing strategies Four: Delivery and governance issues

International Labour Office

One: …in addition to a social necessity social security is an economic necessity…

• Economies cannot develop and grow without a productive
• workforce. In order to unlock a country’s full growth potential
• ne has to fight social exclusion, ignorance,

unemployability…through social transfers

• Access to social health protection and education improves

3

The ILO Campaign on Social Security and Coverage for All

• Access to social health protection and education improves

productivity levels and has a positive impact on growth (we have ample research evidence…)

• The famous trade-off between productivity and equity is a

myth…

• Investments on social security and economic development

coincided in OECD countries

• Cash transfers in developing countries have multiplier effects
• n local markets (stimulate local production inter alia of food)
• Stabilise domestic demand in times of crises

International Labour Office

Two:… a basic social protection package is affordable: Total cost of all basic benefit package components

5.0% 6.0%

4

The ILO Campaign on Social Security and Coverage for All

0.0% 1.0% 2.0% 3.0% 4.0% B u r k i n a F a s o C a m e r o o n E t h i o p i a G u i n e a K e n y a S e n e g a l U n i t e d R e p . T a n z a n i a B a n g l a d e s h I n d i a N e p a l P a k i s t a n V i e t N a m i n p e c e n t O ld - ag e p e ns io ns C h ild b en efits H ea lth care So ci al a ssi st an ce/ em p lo ym en t sch em e A dm i ni st rative co sts

International Labour Office

Point Three: Financing strategies: Lack

• f fiscal space? The good news – part I

Morocco Seychelles Bolivia Mongolia Belarus Belgium Bulgaria Croat ia Czech Republic Spain France Germany Greece Hungary Italy Latvia Republic of Moldova Poland Portugal Slovakia Slovenia Ukraine United Kingdom

40 50 60

• f GDP | Total government

f GDP

5

The ILO Campaign on Social Security and Coverage for All

Burundi Ethiopia South Africa Argentina Bolivia C hile Mexico Panama Uruguay Bahrain Bhutan C hina Georgia India Israel Japan Kazakhstan Korea, Republic of Kuwait Mongolia Thailand Viet N am Belarus Belgium Bulgaria Croat ia Czech Republic Spain Estonia France Germany Greece Hungary Italy Latvia Malta Republic of Moldova Poland Portugal Russian Federation Slovakia Ukraine United Kingdom New Zealand Burundi Ethiopia Mauritius South Africa Tunisia U ganda Argentina Bolivia Costa Rica Chile Dominica El Salvador Panama Trinidad and Tobago Uruguay Azerbaijan Bahrain China Georgia India Indonesia Japan Korea, Republic of Kuwait Nepal Singapore Thailand United Arab Emirates Viet N am Albania Est

• nia

Romania Russian Federation New Zealand

10 20 30 5000 10000 15000 20000 25000 30000 35000 GDP per capita PPP

Public SP & Health expenditure in percentage of expenditure in percentage of

Public SP & Health expenditure in percentage of GDP Public government expenditure in percentage of GDP Linear (Public SP & Health expenditure in percentage of GDP) Linear (Public government expenditure in percentage of GDP)

International Labour Office

Three: Good news part II: Growing fiscal space

Sub-Saharan African countries increased on average

domestic revenue from 15% to 19% of GDP between 1997 and 2006

…and after Monterrey domestic resources increased

(source OECD and ECA)…

6

The ILO Campaign on Social Security and Coverage for All

(source OECD and ECA)…

• 1 0

1 0 2 0 3 0 4 0 5 0 C h a d C

• n

g

• ;

R C a p e V e r d e S

• u

t h A f r i c a S w a z i l a n d B e n i n G h a n a M a d a g a s c a r S e n e g a l N i g e r T a n z a n i a N i g e r i a be fore 2002 es tim a ted 2008 differe nce

International Labour Office

Three: Financing strategies

• Domestic resource mobilisation

Increase the efficiency of tax collection Reduce waste Broaden tax base Reduce tax evasion and avoidance

7

The ILO Campaign on Social Security and Coverage for All

Reduce tax evasion and avoidance Introduce self-financing insurance systems (largely health

care)

Increase overall tax rates

• International resources (transitional financing)

Modified social security oriented budget support? Project financing to build national delivery capacity International financing of health care goods and services

International Labour Office

Four: Delivery issues

There are very few countries where essential public

services cannot be delivered (see universal pensions in Namibia, Nepal and universal HC in Thailand) but

it may need investments in logistical infrastructure Investment increased efficiency of public services Efficient use of private sector delivery systems (e.g.

8

The ILO Campaign on Social Security and Coverage for All

Efficient use of private sector delivery systems (e.g.

pensions in Namibia)

Innovative use of modern technology (cell phones…) Pragmatic delivery decisions are needed with respect

to

Universal vs targeted options Conditional vs unconditional transfers

International Labour Office

Four: Governance issues

• International: International instruments are useful in

making national policy cases…

• National: Social dialogue processes are needed to
• btain national consensus on

Benefit priorities and sequencing

9

The ILO Campaign on Social Security and Coverage for All

Benefit priorities and sequencing

Benefit design (conditions, benefit levels)

• National: Stakeholder participation necessary to

monitor/supervise the effectiveness and efficiency of benefit delivery