$500b investment needs per year for social protection measures: ILO
GENEVA, Nov 26, 2019 (BSS) – More than US$500 billion global investment is needed per year if the countries want to adopt a basic set of social protection measures – known as a social protection floor – by 2030, said a new ILO report.
According to the report, measuring financing gaps in social protection for achieving SDG target 1.3: Global estimates and strategies for developing countries, spending on coverage needs to be increased dramatically to achieve universal coverage of a basic set of social protection measures.
This would include: Cash transfers to children; Maternity benefits for mothers with newborns; Disability benefits; and Old age social pensions.
Based on a research carried out in 134 countries, the findings showed that at current level, social protection covers only 8.5 per cent of children and 15.3 per cent of elderly persons in low-income countries.
In contrast, 35 per cent of children and 90 percent of elderly persons are covered in the upper-middle income countries.
“We firmly believe that universal social protection can be a target which can be achieved through massive investments, including through international development aid to low income countries,” said Valerie Schmitt, Deputy Director of ILO’s Social Protection Department.
Social protection plays a central role to reach the targets set out in the UN Sustainable Development Goals (SDGs), by 2030, including those for poverty, gender equality, decent work and economic growth, among others.
Many middle- or upper-middle-income countries have the domestic capacity to generate the resources to finance a universal social protection floor, said the report’s authors.
However, substantial amounts of overseas development aid will be needed to bridge the financing gap in the 28 low-income countries covered in the research, to achieve universal coverage by 2030.
According to the report the low-income countries would need to spend 5.6 per cent (US$27 billion per year) of their Gross Domestic Product (GDP) to close the financing gap.
The lower middle-income countries would need to earmark 1.9 per cent of GDP (US$ 136 billion per year), whereas the upper-middle income countries would need to spend 1.4 per cent of their GDP (US$ 365 billion per year).
Policy options to create the necessary financing presented in the report include, among others, increasing tax revenue, extending social security coverage and contributions, increasing official development assistance (ODA) with priority given to low-income countries, and eliminating illicit financing flows.
“Promoting the extension of contributory social insurance coverage to workers in the informal economy, in countries where social insurance is still underdeveloped, would create additional revenues of 1.2 per cent of the GDP of these countries,” said Fabio Duran-Valverde, Head of the Public Finance, Actuarial and Statistics Unit.
The ILO is hosting a Global Social Protection Week in Geneva, On November 25-28 November 2019, with the aim of charting a way towards achieving social protection for all.
Participants will contribute to a roadmap for the future of social protection, within the framework of the ILO Centenary Declaration for the Future of Work.