World lacks adequate social protection net

Over 70 percent of the world's population lacks proper social protection, states a new report by the International Labour Organization. It also warns of the trend's negative impact on economic stability and development.

Deutsche Welle, 3 June 2014

When people become unemployed or ill, or simply too old to continue working, they should have the right to claim social security, but many still lack such protection, according to the International Labour Organization (ILO), a UN agency. In its World Social Protection Report 2014-15, the ILO gives an overview of social security coverage around the world. One of its key findings: only 27 percent of the global population enjoys access to comprehensive social security.

"We're focusing not only on income benefits, but also on services and noncash benefits," said Christina Behrendt, one of the authors of the World Social Protection Report.

A driver of economic growth

The report notes that the level of social protection is largely determined by the general economic situation of the country in question. At the same time, a country's economic development is influenced by its social protection system.

"We have observed that many developing and newly industrialized countries that have invested in social security have made positive steps forward," Behrendt told DW. "There we see that investments of this kind have a very, very positive effect on economic development."

China has made great improvements
to its national pension system

China is close to achieving universal pension coverage, while Brazil has accelerated the expansion of social protection benefits to support low-income families, according to the report. In India, the Mahatma Gandhi National Rural Employment Guarantee Act has managed to secure jobs for millions of people in rural areas by providing at least 100 days of guaranteed wage employment in a financial year. All this, say the report's authors, strengthens the domestic market and the local economy.

So one needs to "turn the question upside down and ask if poor countries can afford not to invest in social security," said Behrendt

Social security on the decline in Europe

In Europe, meanwhile, cuts are being made to social protection as part of fiscal consolidation measures. "Especially in southern Europe, we are seeing an increase in poverty and social exclusion among children," said Behrendt.

International poverty-relief organization Oxfam has also warned about the consequences of social spending cutbacks in Europe. "I find the news coming out of countries like Greece particularly alarming - that child mortality has greatly increased because people can no longer access certain medical services," said Tobias Hauschild, a development finance expert at Oxfam Germany. "This is a return to rudimentary social security systems and rudimentary health and education systems, which exacerbates social inequality."

Widening gap between rich and poor

Economic instability led to social
 unrest in Argentina in the early years
of this millennium

Oxfam recently conducted an analysis of the social protection systems in the G20 group of leading industrial nations. In most of them, the gap between rich and poor is growing too.

"This is a worldwide trend," said Hauschild, adding that despite a few exceptions among the G20 - such as the narrowing rich-poor gap in South Korea and some Latin American countries - the situation remains serious in countries such as Brazil, Argentina and Mexico.

According to Hauschild, not only the G20 but also the G7 - the seven wealthiest major developed nations - will need to examine the issue of social protection more closely, as well as the question of social stability. The ILO's report also warns of negative consequences for global political and economic stability if nothing is done to improve the situation.

Hauschild said he hopes that the World Social Protection Report will have an impact, pointing out that new global development goals are to be set at the UN summit in September 2015.

"Now is the start of the so-called hot phase, in which an agreement on new objectives needs to be reached," said Hauschild. "For this reason, the report has appeared at the right time."

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