Social protection discourages inefficient precautionary savings by providing security. The large household saving rates typically seen/prevalent in Asia and the Pacific are partly attributed to weak social protection systems. The deep-rooted culture of “saving for a rainy day” stems from vulnerabilities to weather-, economic or health-related shocks faced by the poor, and the lack of adequate systems to mitigate them. Precautionary savings to meet future contingencies are problematic on two accounts. Households save by reducing necessary current consumption—by compromising on nutrition, education of children and other long-term investments, which especially negatively affects the welfare of children and women Given the weak banking infrastructure in the region, such savings are not invested productively. The fascination for buying gold in many countries in the region is perhaps linked to the need for precautionary savings. — blogs.adb.org/blog