SOCIAL PROTECTION IN THE CARIBBEAN
The World Bank’s Work Program in the Region
POVERTY AND VULNERABILITY IN THE
CARIBBEAN
The importance of Social Protection
POVERTY
Where data is available, poverty rates exceed 17%.
• Poverty reached as high as 41.3% in Belize in 2009; 37.7% in Grenada in 2008; and 30.2% in SVG in 2008.
The brunt of poverty is faced by children and female-headed households.
• 53% of Grenada’s poor are children; 35.7% of Dominica’s poor were under age 15; 1 in 3 children in St Kitts
was poor; while over 50% of the poor in St Lucia were under age 20. 52.8% of Antigua and Barbuda’s poor
were women. In Barbados, 62.2% of poor households were headed by women
The poor are characterized by limited educational outcomes.
• The poor had higher illiteracy rates in Grenada, Dominica, St Kitts and Nevis, St Lucia, and St Vincent and
the Grenadines; and poor children were more likely to miss school.
The poor tends to be employed in the Caribbean.
• In St Lucia, 80% of the poor had jobs; 74.1% of the poor in Dominica; and in St Kitts, 77% of poor men and
85% of poor women were employed.
Economic crisis has exacerbated poverty rates
• However recent the extent of that impact is not known for several countries.
UNFORESEEN SHOCKS AND VOLATILITY
Significant vulnerability to environmental shocks:
• Earthquake, Haiti, 2009: over 200,000 lives lost and significant infrastructural damage.
• Hurricane Ivan, Grenada, 2004: damaged 90 percent of the country’s buildings and left half
of the population homeless.
• Hurricane Omar, St Kitts and Nevis, 2008: led to the two year closure of the Four Seasons
Resort on Nevis, one of the country’s main employers.
Susceptible to exogenous economic shocks:
Effects of the 2008 crisis on SIDS include:
• Collapse of the Stanford Group of Companies in Antigua and Barbuda in 2009, leaving
over 1,200 workers without work.
• Increased commodity prices in most countries.
• Limited growth performance in Caribbean countries, particularly following the crisis.
LABOR MARKET AND ECONOMIC CHALLENGES
Vulnerability due to food price volatility.
• Export earnings derived from primary commodities that no longer benefit from economies of scale and competitive
pricing
• Caribbean countries average between 45% and 65% of GDP on imports.
• Haiti imports 52% of its food, including over 80% of its rice.
Economies are still heavily dependent on the tourism sector, which is in turn highly
vulnerable to external factors.
• Tourism accounted for 77% of Antigua’s GDP in 2010 and over 30% for Bahamas, Barbados, Belize, Dominica and St
Lucia.
Small labor markets, characterized by limited skilled labor, and high unemployment.
• Education systems are not adequately preparing persons for the workforce. Only 35% of students received passing
grades in Mathematics, while 67% passed English A in June 2011 CSEC examinations.
• Unemployment as high as 25% in Grenada, 20% in Guyana, and 19% in St. Vincent and the Grenadines.
• Unemployment affects the poor, youth and women disproportionately
• Labor costs remain high
• Emigration rates exceed 40% for several countries, and emigration rates of skilled labor among the highest globally.
• Limited labor market information readily available.
IMPENDING DEMOGRAPHIC CHANGES
World
Europe
Latin America and the Caribbean
St Vincent & Grenadines
Grenada
St Lucia
Bahamas
Barbados
Population 65+
TTO
Haiti
Population 15-64
Belize
Dominican Republic
Suriname
Jamaica
Guyana
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
Percent Change
(2010-2050)
Projected Change in Working-Aged and Elderly Populations (2010-2050)
SOCIAL PROTECTION IN THE CARIBBEAN:
A DIAGNOSIS
CHALLENGES, NEEDS, AND PRIORITIES
SOCIAL SAFETY NETS - PROFILE
A Comprehensive Portfolio
• A range of cash and in-kind transfers provided.
• Cash transfers include a general cash transfer to the poor; CCTs; transportation allowance;
burial assistance; and emergency cash transfers.
• In-kind transfers include school meals; school textbooks; school transportation; day-care;
provision of food to the poor; medical care assistance and utility subsidies.
Government-funded SSN
• Funding for SSNs in most OECS countries come from local revenue (75%).
• Haiti is an exception, with most of the SSN externally-funded.
• SSN spending close to global average
Social Investment Funds continue to Play a Role
• SIFs are present in Belize, Jamaica, St Vincent and the Grenadines, while Basic Needs Trust
Funds, which have similar objectives, are provided by St Lucia and Grenada.
SOCIAL SAFETY NETS
MULTIPLE PROGRAMS, LIMITED IMPACT
Unobjective and inadequate targeting mechanisms, but concerted efforts to improve
targeting underway
• Methods for determining eligibility for many countries are ad hoc, subjective and discretionary.
• Multiple targeting mechanisms are used by different agencies to identify similar target groups..
• Jamaica, Belize and the DR utilize objective targeting mechanisms. Reforms are underway in A&B, Grenada, SKN and St
Lucia to establish objective targeting mechanisms.
Exclusion and inclusion errors affect coverage performance
• Many pro-poor programs provide little coverage to the poor.
• Compounding this is leakage to non-poor for various SSN programs.
Fragmentation and Duplication
• Several examples of programs supporting the same target groups and implemented by multiple agencies, resulting in receipt
of multiple benefits and higher administrative costs.
• Efforts to rectify these challenges underway in A&B, Grenada etc.
Inadequate Monitoring and Evaluation
• Inadequate information systems and an absence of a institutional culture for M&E has compounded these problems.
• Countries with good models and systems include the DR, Belize and Jamaica.
• Systems being developed or planned for A&B, Grenada, SKN, St Lucia, among others.
LABOR MARKET INTERVENTIONS
MULTIPLE PROGRAMS, LIMITED IMPACT
A Comprehensive Portfolio, yet Spending is Low.
• Vocational training; job search assistance; small business development; youth training programs;
temporary employment programs etc.
• Spending is between 0.01% and 0.4% of GDP in OECS countries
Limited Coverage
• Many programs are very small in terms of beneficiaries covered.
Multiple Agency Responsibility
• Interventions are implemented by various agencies, usually Ministries of Education, Labor and Social
Development, with little coordination.
Limited Information on Labor Market Needs and Program Effectiveness
• Inadequate information systems to manage labor market data and monitor performance.
• Programs are implemented with little/no knowledge of labor market demand.
• Programs are often scaled up, with little knowledge of their impact on participants’ employability.
SOCIAL INSURANCE – PROFILE
Social Insurance spending is the largest share of SP spending for
most Caribbean SIDS.
• SI averages 2% of GDP in the OECS sub-region
Worker and employee contribution rates generally do not differ
beyond one percentage point for most countries.
• Contribution rates range from 5% in Jamaica to 13.5% in Barbados.
A similar range of benefits is provided in most Caribbean
countries.
• Benefits principally include a contributory pension, along with maternity, employment injury,
survivors, invalidity, and funeral benefits, among others.
Some countries provide non-contributory pensions (NCPs) as part
of the SI scheme.
• Barbados, St. Kitts and Nevis, St. Vincent and the Grenadines, Trinidad and Tobago Belize,
Suriname. (Antigua and Barbuda and Jamaica for public servants)
• Grenada, St Lucia and Jamaica provide an NCP as part of the social safety net.
SOCIAL INSURANCE
REASONABLE COVERAGE, YET UNSUSTAINABLE
Reasonable Coverage
• Coverage generally exceeds 60% for most countries, reaching 85% and 90% for Trinidad and Tobago and Grenada respectively.
(For Jamaica, coverage is 37%).
• Coverage is mostly limited to those in the formal sector who meet required minimum contributions.
• Non-contributory Pensions (NCPs) in Trinidad and Tobago and St Vincent and the Grenadines improve coverage outcomes.
Efforts to Address Portability
• High labor mobility addressed through the 1996 CARICOM Agreement on Social Security, OECS Convention on Social Security.
• Bilateral agreements with Canada, the United Kingdom, and Quebec in place.
• Further agreement on the extension of pension rights is needed in the CARICOM agreement.
Duplication
• Duplication of benefits; overlap between SI schemes and social safety net schemes; and parallel systems are challenges to
efficient SI systems.
Unsustainable Schemes
• Most SI schemes are not financially sustainable under current parameters.
• Reserves could be depleted by 2039 for SVG; and by 2041 for Grenada.
• Impending ageing threatens to result in cash flow deficits for Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica,
Guyana, Jamaica and SVG by 2025.
EMERGENCY RESPONSE
MORE RESPONSIVE SP SYSTEMS NEEDED
CCRIF - An Excellent Model at the Macro-Level
• The Caribbean Catastrophe Risk Insurance Facility (CCRIF), which pools risk to mitigate the financial
impact of environmental hazards, provides quickly disbursing liquidity to 16 CARICOM member states.
Limited protection at the individual and household levels
• Insurance coverage generally limited to tourism-related properties, and medium and large commercial
businesses.
• The poor are unable to afford insurance, and their dwellings are usually more prone to damage.
Emergency cash transfers provided in some countries, but programs are
small
• This is provided as part of the SSN in Belize, Grenada, Jamaica, St. Kitts and Nevis, St Lucia, SVG, and
T&T.
• Small coverage and in some cases, low levels of benefits.
SSNs not flexible enough to respond in time of shocks
• The absence of beneficiary registries and information systems limit responsiveness.
RESPONDING TO THE CHALLENGES
THE WORLD BANK’S WORK PROGRAM ON
SOCIAL PROTECTION AND LABOR IN THE
CARIBBEAN
SOCIAL INSURANCE
LABOR MARKET PROGRAMS
• Supporting improved efficiency in
public pension schemes, improved
government capacity , and
integrated pension systems.
• Supporting activation, graduation
agendas, labor market monitoring,
and flexible labor market response.
• Jamaica, Social Protection Project
(2007-2013); First Programmatic DPL
(under preparation)
• Trinidad and Tobago, Pension
System Enhancement (2011-2014)
• Antigua and Barbuda, Public and
Social Sector Transformation Project
(2013-2018)
• Jamaica, Social Protection Project;
Jamaica Social and Economic
Inclusion of People with Disabilities
(2012-2017), Jamaica Conditional
Cash Transfer Program (now closed);
Just-in-time Skills Promotion and
Protection (NLTA) (closed)
• Dominican Republic, Flexible
Employment System Project (under
preparation), Youth Development
Project (2005-2013)
• Regional: Strengthening Labor
Market Monitoring and Performance
in the Caribbean (2013-2016);
Caribbean Growth Forum (ongoing)
SOCIAL SAFETY NETS
SUPPORTING SP SYSTEMS
(IMPROVING M&E AND CAPACITY FOR
EMERGENCY RESPONSE)
• Supporting improved targeting,
human capital development,
improved efficiency in service
delivery.
• Supporting improved information
systems, data collection,
coordination, monitoring and
evaluation.
• Antigua and Barbuda, Public and
Social Sector Transformation Project
(2013-2018)
• Belize, Conditional Cash Transfers
and Human Development NLTA
(2012-2013)
• Grenada, Safety Net Advancement
Project (2011-2015)
• Haiti: Improving Maternal and Child
Health through Integrated Social
Services (2013-2018)
• Jamaica, Social Protection Project;
Jamaica Conditional Cash Transfer
Program (now closed);
• Dominican Republic, Social Sectors
NLTA (2009-2013); Performance and
Accountability of Social Sectors DPL
(2011-2012), Social Sectors
Investment Program (2005-2013)
• Regional, OECS NLTA, South-South
Exchange Facility (closed)
• Antigua and Barbuda, Public and
Social Sector Transformation Project
(2013-2018)
• Belize, Conditional Cash Transfers
and Human Development NLTA
(2012-2013)
• Dominican Republic: Social Sectors
NLTA (2009-2013); Performance and
Accountability of Social Sectors DPL
(2011-2012), Social Sectors
Investment Program (2005-2013)
• Grenada, Safety Net Advancement
Project (2011-2015
• Jamaica, Social Protection Project;
• Regional, OECS NLTA, South-South
Exchange Facility (closed)
• Dominica: Growth and Social
Protection Technical Assistance
Credit. (2006-2010 - closed)
THE WAY FORWARD
AREAS FOR IMPROVED COLLABORATION TO
ADDRESS SOCIAL PROTECTION CHALLENGES
IN THE CARIBBEAN
SYSTEM-WIDE ACTIONS
Harmonize SP
policies to
respond to
regional mobility
Ensure portable
benefits across
countries – beyond
pensions
Consolidate SP
programs within
countries
Eliminate duplication
Reduce fragmentation
in service delivery
Improve
communication and
coordination between
SI, SSN, and labor
market programs.
Prioritize human
capital
development
among the poor
Condition
unemployment
benefits and social
assistance to ALMPs
Promote income
generation capacity of
poor households
Condition support to
key improvements in
healthy lifestyles.
Improve
Monitoring and
Evaluation
Develop adequate
information systems
Improve data
collection capacity
and collect data more
frequently
Harmonize systems
and cooperation on
data collection at the
regional level
Increase
partnerships with
civil society and
the private sector
Cooperate at the
design and planning
stages (data
collection, needs
assessments etc.)
Partner at the
implementation stage
for service delivery
(e.g. demand-driven
training)
AREA-SPECIFIC ACTIONS
Improve
responsiveness to
shocks.
Flexible targeting, open
application, beneficiary
registries, and fast scaleup.
Quickly scale-up
temporary employment
programs during
economic downturn.
Improve insurance
coverage – particularly
unemployment and
emergency coverage.
Improve efficiency
and effectiveness
of social safety net
programs
Improve targeting
efficiency
Reduce duplication and
fragmentation
Tie transfers to human
capital improvements
Tailor labor market
interventions to
respond to the
regional context
Promote employability in
a demand-driven way,
particularly among
vulnerable groups
Capitalize on the mobile
nature of the labor force
Complement passive
programs with active
labor market policies
Reform social
insurance
Improve coverage of selfemployed, informal
workers, and the poor.
Improve long term
sustainability. (increased
contribution rates,
increased retirement age,
eliminate duplication)
Strengthen the portability
of social security
benefits under regional
and bilateral
arrangements.
THANK YOU!
Social Protection Discussion Paper
Tailoring Social Protection to Small Island Developing States
Lessons Learned from the Caribbean
Weblink: http://documents.worldbank.org/curated/en/2013/08/18086868/
www.worldbank.org – Topics – Labor and Social Protection –
Publications – Discussion Papers – General Social Protection
Contact: awilliams5@worldbank.org