Dec 17: Social security covers all measures that provide benefits, whether in cash or in kind. It is essentially to secure protection from a variety of external shocks. According to the International Labour Organisation (ILO), this protection is from a lack of work-related income (or insufficient income) caused by sickness, disability, maternity, employment injury, unemployment, old age, or death of a family member; lack of access or unaffordable access to health care; insufficient family support, particularly for children and adult dependents; and general poverty and social exclusion. The four priority areas can be identified as unemployment benefit, pensions, health care and social assistance. Where do the South Asian countries stand in terms of these priority areas?
While unemployment benefit largely does not exist, pension is available in each country but it overwhelmingly covers civil servants (government employees), employees of public sector organisations, and formal sector workers’ pension schemes in Bangladesh, India, Nepal, Pakistan and Sri Lanka. This implies that the overall coverage remains limited and a vast majority of the population is bypassed.
With an increasing life expectancy, the population with over 60 years of age will rise. This does not augur well for the future senior citizens. In a decade’s time, India is expected to have 12 percent of its population as comprising of senior citizens. Even today, it has 75 million elderly persons. It is estimated that 158 million in India, 30 million in Pakistan and four million in Sri Lanka would be above 60 years by 2025. A large number of people would have no access to pension. Hence, efforts need to be made in building and strengthening the social security system. The system developed should be such that not only provides an easy and affordable access to all the population but is also sustainable.
Yet another dimension of the issue is that many countries lack an institutional mechanism that could manage pension funds for the government employees. Hence, pensions form an important part of annual budgets. This is neither productive nor sustainable.
Over the years, South Asia and in fact other developing countries would be facing a new phenomenon. An increasing life expectancy would lead to a rise in the population with over 80 years. Whereas, globally the population with over 80 years of age alone would be 300 million by 2050; South Asia alone would have at least one-third of them. Are the South Asian countries cognisant of these emerging challenges in the coming decades?
The welfare and workfare programmes are two important instruments of policymakers outreaching the poor and marginalised segments of the population in times of distress. Recourse to such programmes is not uncommon even in normal economic development process for that segment of the population or region of a country found being bypassed. Termed as important components of necessary social safety nets (SSNs), both of these programmes, though targeting the marginalised, have different connotation and manifestation.
Transfers to poor households – the welfare programmes – have been experimented in a number of developing countries. Such programmes have also been found linked with (positive) conditionalities, such as beneficiaries enrolling their children in schools, women making health clinic visits, etc.
Bangladesh launched a targeted food rationing programme in 1993. Realising the importance of dividends of linkages and better targeting, it was replaced with the food for education programme. The access and continuation of benefit to the programme – households being provided monthly 15kg of rice per child with maximum of 20kg – if all children were enrolled in primary schools. Learning from the past, the programme was changed again from food to cash for education owing primarily to logistical difficulties.
The Benazir Income Support Programme introduced in 2008 provides cash to the poor households with an annual budgetary allocation of close to $700 million. The allocation for FY2012-13 is Rs70 billion to provide cash assistance to 5.5 million families. This programme aims at covering almost two-fifth of the population below the poverty line. The enrolled families are paid cash assistance of Rs1,000 per month on quarterly basis. Other benefits provided under graduation strategy are long-term interest free loans, vocational and technical training, and health and life insurance coverage. In the country, we also have Pakistan Bait-ul-Mal and Zakat system that largely provides financial support to the vulnerable and marginalised.
Critics, however, are sceptical about welfare programmes on the basis of system inefficiencies, suboptimal utilisation of scarce financial resources, issues of difficulties in outreaching to the marginalised segment of the population.
The workfare programmes have been introduced in response to unemployment and poverty having cropped up due to macroeconomic shocks, structural adjustment, and agro-climatic shocks. Such programmes were introduced in Chile in 1987, South Korea in response to the Asian financial and economic crises of 1997-98, North-East Brazil in response to the drought in 1998 and in Argentina in response to recession in 1997 where the unemployment had then reached 18 percent.
In case of India, the Maharashtra state was fist to guarantee statutorily the ‘principle of right to work’, making employment an entitlement to empower rural poor. The Maharashtra Employment Guarantee Act was enacted in 1979. In mid-2000s, the then newly elected government launched the national rural guarantee scheme, initially in 150 districts. Now the Mahatma Gandhi National Rural Employment Guarantee Act of 2005, launched in 2006, is supporting 53 million households in 615 districts.
Bangladesh also introduced the employment generation for hardcore poor programme in selected poverty-prone areas. It was implemented in two phases: September to November 2009 and March to April 2012, respectively, reaching 16 and 64 districts.
The workfare programmes, in contrast to the welfare programmes, do help in injecting cash to the targeted population but by providing them employment in scores of public funded small infrastructural development projects across the country. Such programmes also contribute to income generation – personal and national.
Different initiatives notwithstanding, the fact remains that besides access, targeting and governance issues, outreach to the targeted population also remains rather limited. Moreover, the welfare programmes are largely a burden on the already meager resources of the developing countries. And they are not sustainable.
Our traditional social values and joint family system – the mainstay of care for the elderly population in the past and social security providers – in fast changing economic realities are eroding. Building and strengthening social security system should appear rather high on the agenda. The system developed should target the whole population but in phases and, importantly, has to be contribution based.
An Article by Dr Sabur Ghayur
Published by Daily The News on Dec 17, 2012