Social Protection in the context of a
Recovery with a Human Face
Isabel Ortiz
Associate Director Policy and Practice UNICEF
Social Protection Floor Initiative Workshop
Hong Kong, 10 June 2010
Social Protection and Crisis
•
•
•
1929 crisis led to the New Deal
2008-09: International call for social protection
Social protection is necessary to protect populations
from economic shocks
Social protection counter-cyclical
– Increasing incomes through employment and
transfers
– Raising domestic demand/expanding internal
markets
•
Social protection a component of fiscal stimulus plans
•
BUT 2010 Post crisis fiscal consolidation/adjustment:
– Need to keep the momentum on expanding social
protection
– Need a recovery with a human face
•
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
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Sri Lanka
Switzerland
Bangladesh
Norway
Nigeria
Netherlands
Mexico
Spain
Belgium
Kenya
Argentina
Portugal
France
United Kingdom
Indonesia
Israel
Egypt
Lithuania
Czech Republic
Slovenia
Poland
Peru
Chile
Canada
Sweden
Germany
India
Finland
Russia
South Africa
Taiwan
Philippines
Austria
China,P.R.:Hong Kong
Japan
United States
Malaysia
Singapore
Australia
Turkey
Korea
Tanzania
Vietnam
Honduras
Hungary
China
Fiscal Stimulus Plans Q4 2008-Q3 2009,
%GDP
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Governments embark on fiscal stimulus plans from 2008 onwards
As an average, 25% of stimulus plans spent on protection (UNDP,
2009)
Mostly in high and middle income economies – but slow progress
in LICs
Positive development, social protection expanded during crisis
Social Protection in Fiscal Stimulus Plans
Source: UNICEF, based on Zhang, Thelen & Rao, 2010
The Social Protection Floor Initiative: A UN System
Emergency Response to the Crisis
In April 2009, the UN Chief Executives Board (CEB) has agreed on
nine joint initiatives to confront the crisis, accelerate recovery and
pave the way for a fairer and more sustainable globalization:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Additional financing for the most vulnerable
Food Security
Trade
A Green Economy Initiative
A Global Jobs Pact
A Social Protection Floor
Humanitarian, Security and Social Stability
Technology and Innovation
Monitoring and Analysis
World Bank – Social Protection 2006-10
9.0
8.0
Grant Allocation
7.0
IDA Allocation
6.0
US$ billion
IBRD Allocation
5.0
4.0
3.0
2.0
1.0
0.0
FY06-08 (pre-crisis)


FY09-10 (post-crisis)
Large increase, mostly lending to middle income
countries
Mostly safety nets (less employment, food security)
UNICEF work in Social Protection:
124 programs in 76 countries
2010: IMF, G-20
IMF discourse up to February 2010:
– fiscal stimulus plans
– easing macroeconomic policies
– counter-cyclical interventions
– measures to ensure social safeguards, including
protection of “priority social expending”
February 2010: 2 New IMF Board Strategies:
–
“Exiting from Crisis Intervention Policies”
–
“Strategies for Fiscal Consolidation in the Post-Crisis
World”
June 2010 - G-20 Meeting:
Call for fiscal consolidation and adjustment
2010-11: Governments Contracting Public Expenditures
Main Issues to Watch Out
Contraction of social expenditures
Contraction of social protection:
– Targeting (reducing coverage)
– Rationalizing/reducing benefits
– Pension reform
•
Cutting subsidies
•
Wage bill in social sectors
•
•
•
•
While social protection expanded during the crisis now contraction as a result of post crisis fiscal
consolidation/adjustment?
A recovery with a human face
Selected Issues in MICs and Lics (March 2009-10)
Limit subsidies
Barbados
Belarus
Bolivia
Burkina Faso
Cambodia
Cote d’Ivoire
El Salvador
India
Indonesia
Iran
Iraq
Jordan
Kiribati
Libya
Malaysia
Maldives
Mexico
Mongolia
Morocco
Nigeria
Pakistan
Panama
Republic of Congo
Sri Lanka
Sudan
Syria
Timor-Leste
Togo
Tunisia
Wage bill caps/cuts
Algeria
Barbados
Belarus
Belize
Bhutan
Burundi
Cambodia
Comoros
Cote d’Ivoire
DR Congo
Georgia
Ghana
Grenada
Iraq
Jordan
Kiribati
Latvia
Libya
Lithuania
Maldives
Mali
Marshall Islands
Mauritius
Morocco
Paraguay
Philippines
South Africa
Sri Lanka
St Kitts & Nevis
Syria
Tonga
Vanuatu
Zambia
Zimbabwe
Rationalize and further
target
Armenia
Cambodia
Georgia
Grenada
India
Indonesia
Libya
Maldives
Mauritius
Mongolia
Poland
Slovenia
Syria
Timor-Leste
Togo
Ukraine
Pension and/or health
reform
Belize
Cote d’Ivoire
Russian Federation
St Vincent & Grenadines
Fiscal Space: Illustrated Adjustment Paths
(Fiscal deficit in percent of GDP)
10
9
8
Alternative
adjustment
7
6
5
Current
adjustment
4
3
2
1
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
Need to Keep Momentum on Social Protection
• Fiscal stimuli have expanded safety nets, mostly in MICs,
however this should lead to longer-term SP systems
• Slow progress in LICs, too many pilots
• Risk that the necessary expansion of SP may be
undermined in the context of post-crisis fiscal
adjustment
• Need to work with governments to identify fiscal space,
there are alternatives to suggested fiscal austerity
• SP not included in MDGs – September 2010 World Summit
Need to Keep Momentum on Social Protection II
• SP systems, starting by a social protection floor, are necessary
to:
– cushion populations from future shocks
– reduction of poverty and inequalities
– contributions to economic growth and human development
– fulfilling rights and supporting political stability
• Key Policy Issues:

Expanding social protection coverage

Benefits: Universal or Targeted? Attention to “targeting”
and reducing benefits under adjustment

Unconditional or conditional transfers?

Affordability, working with governments to expand fiscal
space and a recovery with a human face
September 2010: World Summit
Social Protection Contributes Effectively to MDGs
Proven results:
 Reduced poverty, better nutrition, improved household income
stability (MDG 1, 4, 6)
 Improved preventive health care (MDG 4 and 5)
 Higher immunization rates (MDG 4)
 Higher school enrollment rates reduced school drop-out (MDG 2,3)
 Decline in child labour among children in rural areas
(MDG 2, 8)
Thank you