A global safety net
In October 2011, a high-level panel headed by the former president of Chile, Michelle Bachelet, delivered a ground-breaking report to UN Secretary-General Ban Ki-moon, arguing that everyone around the globe should receive a living income, guaranteed through transfers in cash or in kind, such as pensions for the elderly and persons with disabilities, child benefits, income support benefits and/or employment guarantees, and services for the unemployed and working poor. Martin Hirsch, a member of that panel, explains why this proposal for a more socially responsible globalisation can work.
The Bachelet report on the social protection floor, which was submitted in October 2011 to the UN secretary-general, features a number of innovations as compared to previous work on the same subject.
First of all, it breaks with the idea that social protection is the ultimate stage of development—a privilege of the rich countries. It shows that countries with low per capita income can establish customised social protection floors which can be improved gradually over time.
Next, it shows that social protection is not a hindrance to growth. Emerging countries have in fact been able to achieve and sustain high growth rates while at the same time broadening social protection and expanding the share of wealth they devote to programmes aimed at the population at large. Such is the case, for example, in Brazil, which in recent years has reduced poverty and lessened inequalities while still maintaining a high rate of growth.
The proposal relies on numerous examples of mechanisms allowing social protection to be tailored to countries where the informal economy plays a major role, but where solving that problem need not be a prerequisite.
The report has also succeeded in making social protection an international challenge, which is something new. It is in the interest of the international community as a whole to see the level of social protection rise throughout the world; some reasons for this are controlling pandemics, reducing migratory imbalances and achieving economic stability. Embraced in the G20’s final declaration in Cannes, for the first time the social protection floor made its way into an international forum that, until now, had focused its work almost exclusively on the economic and financial dimensions of globalisation.
The social protection floor, states the report, is a crisis prevention instrument. It is also a necessary perspective for achieving and extending the millennium development goals. It factors in the prospects for aging: by 2050, 80% of people over 60 years of age will be living in poor or emerging countries.
While the Bachelet report recommends that each country devote domestic resources to funding the social protection floor, it acknowledges that international solidarity can hasten the process in the poorest countries by topping up their own efforts. In this regard, it reiterates that social protection comprises not just insurance schemes, but elements of supply as well. It is useless to have health insurance if there are no hospitals, doctors or drugs available to the entire population.
Likewise, the issue of conditional cash transfers is one that can be found in a variety of forms in countries with very different levels of protection. In Brazil, it is the Bolsa Família, which ties family allowances to children’s schooling and to preventive health programmes. But in a country like France as well, a condition for family allowances is pre- and postnatal monitoring, and there has been debate over the advisability of suspending allowances as a sanction for school truancy.
In many countries, due to the linkage between social benefits and earned income means, care must be taken not to create disincentives to work. It is not easy to institute a minimum income—a condition of the fight against extreme poverty—without running the risk of creating inactivity traps. In South Africa, creating the minimum pension for the elderly had repercussions on the activity of the children and grandchildren of those receiving the pensions. In France, a far-reaching reform was carried out recently to avoid having a return to work result in a drop or a stagnation of income. Making work pay is a concern that is common to all countries.
The way in which the Bachelet report was prepared removed a number of major obstacles; but everyone knows that the road ahead is long and arduous, hence the report recommends several valuable tools.
The report proposes experimental methods to demonstrate the effectiveness of social protection programmes and allow for their gradual extension on the basis of validated outcomes. For example, preventive health programmes for schoolchildren influence truancy, scholastic outcomes and salary levels, with a “return on investment” for the economy of any country that implements them.
Another tool put forward is the use of new technologies that can deliver cash transfers either to cell phones or through biometric recognition of the beneficiaries of such aid. It also urges involving civil society, alongside national governments, to tailor social protection to the cultural and social characteristics of each country and not impose it artificially.
It is important to ensure that, following the conceptual progress made in 1991, the issue of social protection remains on the international agenda. This means monitoring the progress that each country makes as well as the impact on how people live.
Hirsch, Martin (2011), Sécu objectif monde: le défi universel de la protection sociale, Éditions Stock, Paris.
The UN Millenium Development Goals
©OECD Yearbook 2012
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