Social security key to sustainable growth

Kathmandu, May 20:

The lack of social security and social stability have risk to sustainable economic growth and development in Asia-Pacific and may compromise the positive effects of globalisation, according to a new assessment by the International Labour Organisation (ILO).

The paper, ‘Poverty, Economic and Social Development and the Right to Social Security within the Global Decent Work Debate’ — that was presented at a high-level Asia-Pacific meeting on extending social security coverage, particularly to the informal sector in New Delhi on May 19-20 — calls for a challenging of the conventional economic wisdom that sees spending on a social floor as unproductive, resulting in a ‘one-sided view of social security as a cost to society rather than a potential benefit and an investment in economies and people’.

The paper demonstrates that implementing basic social security systems can make an enormous contribution to pulling people out of poverty and to the achievement of the first Millennium Development Goal (MDG). In contrast, economic growth alone does not automatically reduce poverty, unless it is supported by employment promotion and income redistribution mechanisms. But, while social security is an established human right, it ‘remains a dream for 80 per cent of the global population’.

According to ILO calculations less than two per cent of global product could provide basic social security benefits to all the world’s poor and six per cent would cover all those who currently lack access to social security.

What’s more, even most low-income countries can afford some level of social protection, the paper states, citing examples in Bangladesh, India, Nepal, Pakistan and Viet Nam where research shows that the cost of a basic benefits package, varying over the next 20 or so years, should not exceed six to eight per cent of gross domestic product (GDP). Such a package might include essential health care, benefits directed at child welfare, and old age and disability-related income security.

Making the case for a global social floor, the paper cites ‘good social reasons to introduce social protection mechanisms at an early stage of economic development and generally no good economic reasons why that should not be done’.

The meeting on socially inclusive strategies to extend social security coverage had brought together representatives of governments, workers and employers from 21 Asia Pacific countries.