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TWN
Info Service on UN Sustainable Development (Jun13/04) Dear
friends and colleagues, We
are pleased to share with you TWN briefing paper No. 2 on “Social
protection and sustainable development.” __________________________________________________________________________________ TWN BRIEFING PAPER NO. 2 FOR THE FOURTH SESSION OF THE OWG-SDG SOCIAL PROTECTION AND SUSTAINABLE DEVELOPMENT UNGA Resolution 66/288: RIO+20 Outcome Document (The Future We Want), Paragraph 107: "We recognize that promoting universal access to social services can make an important contribution to consolidating and achieving development gains. Social protection systems that address and reduce inequality and social exclusion are essential for eradicating poverty and advancing the achievement of the Millennium Development Goals. In this regard, we strongly encourage initiatives aimed at enhancing social protection for all people." (Emphases added) A. The human right to social security and to work Article 22 of the Universal Declaration on Human Rights states: “Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.” Article 23 further elaborates that: “(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. (2) Everyone, without any discrimination, has the right to equal pay for equal work. (3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. (4) Everyone has the right to form and to join trade unions for the protection of his interests.” Social protection [1] is essential to ensure the realization of those rights. The employment-social protection nexus is key in the formulation of policies and measures within a sustainable development framework. Social protection includes income security for the unemployed, the sick, the disabled, pregnant woman, children and the elderly as well as food security and adequate nutrition, and access to health care, education, housing and sanitation. Social protection is also a means to reduce inequalities. This is a moral and ethical issue, on the one hand, but also an economic imperative. While equality is now recognized as good for growth, growth, which is necessary for reducing poverty, has not always reduced inequality. The International Monetary Fund (IMF) acknowledges that, “There is solid evidence that social policies targeted to reducing poverty and promoting human development can have a powerful impact”. But adequate fiscal policies are necessary, both for reducing poverty and for creating jobs. On the revenue side, adequate taxation of extractive industries and other natural resource-related economic activities can greatly improve government finances. Further, combating tax evasion needs to complement more progressive taxation and in a world of globalized finances and proliferation of secrecy jurisdictions, no country can control massive scale tax evasion on its own. Strengthened international tax cooperation through a fortified UN Committee on Taxes would be a key contribution to the revenues of both developing and developed country governments. On the spending side, a fortified fiscal space is essential to improve health and education services in developing countries, which are key to poverty eradication and social inclusion. Those expenditures need to be protected from budget cuts if austerity measures are put in place. As such, social protection measures are a priority element of sustainable development strategies, particularly in the aftermath of crisis and recession. At present four out of five persons worldwide do not benefit from a level of social protection that allows them to realize their human right to social security. Ensuring a basic level of social protection and social inclusion, and thus a decent life for all, is a necessity and an obligation under the human rights instruments. The global financial and economic crisis has demonstrated that sustaining social protection is of the highest priority. The ILO report to the G20 summit in Pittsburgh in 2010 found that the employment effects of the so-called ‘automatic stabilizers,’ including social assistance and social security benefits, were just as important as the effect of the fiscal stimulus packages. Governments that already had social protection schemes in place were much better able to cope with the crisis. The impact of the crisis at household level was softened and the drop in aggregate demand alleviated. B. Impacts of austerity measures on social protection It is striking that the various austerity measures being discussed by governments worldwide, such as fiscal consolidation, regressive tax measures and withdrawal of food and fuel subsidies, will reduce the quantity and quality of decent work and social protection. The current global consensus of austerity measures has serious implications for the ability of governments to prioritize financial resources for continuing existing social protection measures or to design new ones in response to the effects of the crisis. Fiscal adjustment through public budget cuts and rationalization of social expenditures are being carried out by governments across both developed and developing countries, and these measures have been targeting social safety nets, including old-age pensions. A report that investigates the impact of austerity measures on social protection programmes titled, “The Age of Austerity – A Review of Public Expenditures and Adjustment Measures in 181 Countries,” is published jointly by the Initiative for Policy Dialogue at Columbia University and the South Centre. [2] The report shows that between January 2010 and February 2012, 34.8% of countries out of a sample of 158 countries are targeting or further rationalizing social safety nets and 32.9% of countries are reforming old-age pensions. Social safety nets are being adversely affected in sectors ranging from education, health, agriculture and social protection. The report also highlights that fiscal contraction is most severe in the developing world. Austerity will be affecting 5.8 billion people or 80% of the global population in 2013, and by 2015 this is expected to increase to 6.3 billion or 90% of persons worldwide. Social protection measures are being affected in several ways. Pension reforms are being considered in 86 countries (47 developing and 39 high-income) and involve measures such as raising pension contribution rates, increasing eligibility periods, prolonging the retirement age and/or lowering benefits. Such reforms exclude vulnerable groups from receiving benefits or diminish public assistance that is vital to preserve well being, especially at older ages. Health system reforms are taking place in 37 countries (12 developing, 25 high income), involving the increase of fees and co-payments paid by patients along with cost-saving measures in public health centers. The main risk of these adjustment measures is straightforward: vulnerable groups are excluded from receiving benefits, or are receiving reduced assistance, at a time when their needs are greatest. Moreover, many governments appear to be rationalizing and targeting social protection systems to the poorest, which is a de facto reduction of social protection coverage. This policy approach runs a high risk of excluding large segments of vulnerable households – either through timing mismatches or exclusion errors – at a time when governments should be considering supporting a social protection floor for all, scaling up rather than scaling down social protection systems. Even more critical, due to the adverse impacts of austerity measures that have already occurred in social and human development, it is even more imperative that governments focus on expanding social protection coverage rather than just improving the targeting of existing programs. International financial institutions advising austerity policies, as well as governments carrying them out, need to consider what the long-term opportunity costs of not scaling up equity-based interventions, social protection programs and productive social sector investments during the economic recovery. In Least Developed Countries, a strong case may be made to extend universal transfers (e.g. to families with children or to female-headed households) or to carry out some form of geographic targeting to provide immediate support to vulnerable groups facing unexpected and prolonged shocks until administrative capacity is developed to effectively implement more sophisticated systems. A strong case can also be made to extend a social protection floor for children and elderly persons with disabilities. The still continuing worldwide propensity toward fiscal consolidation can be expected to aggravate the employment crisis and diminish public support at a time when it is most needed. It is important that policymakers recognize the high human and developmental costs of poorly designed adjustment strategies and consider alternative policies that support a genuine recovery for society and economy. There is a menu of policy options that countries can pursue to create or expand fiscal space for scaling up or safeguarding existing social protection programmes. Some of these options are: a) Adopting a more accommodating macroeconomic framework; b) Borrowing or restructuring existing debt; c) Re-allocating current public expenditures; d) Increased aid and transfers; e) Increasing tax revenue; and, f) Using fiscal and central bank foreign exchange reserves. There is no one-size-fits-all, and the uniqueness of each country requires that fiscal space options be carefully examined at the national level and fully explored in an inclusive dialogue of recovery alternatives. C. Social protection and women’s rights As with previous crises, women and men are affected in different ways and degrees by the recent global financial and economic crisis. As fiscal stimulus measures introduced in the fall-out of the crisis have in recent years given way to fiscal austerity, contractions in public services and income transfers have affected women disproportionately. Austerity policies and cuts in public spending have squeezed family budgets, which in poor and lower middle-income households have resulted in women taking on paid work in addition to unpaid care work at home, often in the informal economy. Public sector job losses, particularly in the education and health sector, have also affected women disproportionately as many teaching and nursing jobs are held by women. In this context, the state should place special emphasis on social protection for both married and single women in low and middle-income households. Even when governments have responded to economic recession and sharp increases in unemployent with a fiscal stimulus, public funds usually focus on transport and physical insfrastructure rather than social infrastructure. Heads of States and Governments in paragraph 31 of the Rio+20 Outcome Document clearly stated: “…We recognize that gender equality and the empowerment of women are important for sustainable development and our common future. We reaffirm our commitments to ensure women’s equal rights, access and opportunities for participation and leadership in the economy, society and political decision-making.” D. Social protection and inequality Social assistance and protection policies are central to national strategies to reduce inequality while boosting productive employment. While various policies, including investments and incentives in the domestic economy, skills-training and scaling up long-term social spending, are critical, a multi-pronged approach also requires provision of social assistance that target those most in need. Conditional cash transfers may be particularly well suited to reducing inequality and promoting social mobility in developing countries due to the way in which income support can be combined with the requirement to maintain investment in human capital or child health means. As such, they can be useful tools not only for tackling household poverty, but also for promoting school enrollment and improving healthcare for children. Given the large informal sector in developing countries, it can be more difficult to use taxes for redistribution purposes and thus greater focus should be placed on benefit systems. However, as noted in section A above, several urgent and needed taxation policies amd measures are required that needs international cooperation. E. Social protection and the right to food In paragragh 108 of the Rio+20 Outcome Document Heads of States and Governments “reaffirm our commitments regarding the right of everyone to have access to safe, sufficient and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger. We acknowledge that food security and nutrition has become a pressing global challenge and, in this regard, we further reaffirm our commitment to enhancing food security and access to adequate, safe and nutritious food for present and future generations …” Ultimately, addressing food insecurity requires placing policy attention on distribution and access as well as systemic financial and trade practices that affect food prices. Scaling up or introducing new social protection programmes to ensure that vulnerable households have access to affordable and nutritious foods can play a significant role in ensuring distribution and access to food. F. International cooperation and means of implementation While social protection remains the responsibility of governments to ensure its extension to all citizens, a minimum floor for social protection can help ensure access in the poorest countries. Over the longer term, however, reducing poverty requires comprehensive national policy planning, such as through national development strategies that aim at both employment-generating growth and equitable social development. It also requires international cooperation and the fulfilment of commitments by developed countries to developing countries in the crucial implementation means of finance and technology. Agenda 21’s Chapter 14 contains the committed work programme on Transfer of Enviromentally Sound Technology, Cooperation and Capacity-Building, and this was reaffirmed and further elaborated in the 2002 Johannesburg Plan of Implementation. The Rio+20 Outcome document in paragraph 19 “underscore the continued need for an enabling environment at the national and international levels, as well as continued and strengthened international cooperation, particularly in the areas of finance, debt, trade and technology transfer, as mutually agreed, and innovation, entrepreneurship, capacity-building, transparency and accountability.” Paragraph 269 “emphasizes the importance of technology transfer to developing countries and recall the provisions on technology transfer, finance, access to information, and intellectual property rights as agreed in the Johannesburg Plan of Implementation, in particular its call to promote, facilitate and finance, as appropriate, access to and the development, transfer and diffusion of environmentally sound technologies and corresponding know-how, in particular to developing countries, on favourable terms, including on concessional and preferential terms, as mutually agreed.” ___________________________________ ENDNOTES 1. United Nations Research Institute for Social Development (UNRISD). 2010. Combating Poverty and Inequality: Structural Change, Social Policy and Politics: Social protection is concerned with preventing, managing, and overcoming situations that adversely affect people’s well being.
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