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By Makereta Komai, PACNEWS Editor in Manila
The Asian Development Bank (ADB) says investing in human capital and social protection is key to addressing poverty and reducing inequalities in the Asia-Pacific region.
Despite tremendous progress in economic and social development, over 830 million people still live between US$1.90 and US$3.20 a day and 300 million are still exposed to extreme poverty.
“Inequalities within and across countries remain high. Large groups of people continue to struggle for adequate income, decent living conditions, and access to health care and essential services, said ADB Vice President, Bambang Susantoro, while addressing 300 delegates attending the Asia Pacific Social Protection Week at the ADB headquarters in Manila Monday.
“More needs to be done to help break inter-generational cycles of poverty, enhance growth through investment in human capital, increase productivity, and reduce vulnerability to risks.
Susantoro urged ADB member countries to develop nationally appropriate social protection measures for the poor and vulnerable.
“It is encouraging to see the positive momentum and response in our region. More and more governments, in collaboration with development partners, are placing social protection at the core of their development agenda.
ADB’s latest Social Protection Indicator reports, released in July this year, show significant progress in expanding social protection across the Asia and Pacific region. Many of ADB’s developing member countries are reforming, strengthening, and expanding social protection policies and programs to support the poor and vulnerable.
“Spending on social protection in Asia has increased moderately from 4% to 5.3% of GDP while in the Pacific spending has increased from 4% in 2005 to 6% in 2015.
ADB defines social protection programmes as covering social assistance, social insurance and active labour market programmes.
In the Pacific, social insurance refers to contributory schemes to help people respond to help people respond to common risks such as illness, old age and unemployment.
“Social insurance dominated spending on social protection in the Pacific, with average spending of 3.4% of GDP and 3.0% of GDP per capita. Social insurance expenditure was largely taken up by old-age pensions (for persons aged 60 and above), equivalent to 2.8% of aggregate GDP.
The dominant policy programmes in social assistance were welfare assistance comprising cash transfers for vulnerable groups, with expenditure at 1.1% of GDP and assistance to the elderly (persons aged 60 and above), with expenditure at 0.7% of GDP per capita. Spending on child welfare, disability assistance, and health assistance was below 0.2% of GDP, according to the ADB Social Protection Indicator for the Pacific launched in July this year.
“Some of ADB’s developing member countries have rapidly scaled-up social assistance schemes that empower families to invest in human capital and break the cycle of inter-generational poverty.
Susantoro used the example of the Philippines' conditional cash transfer programme (Pantawid Pamilyang Pilipino Programme), which has expanded significantly since its inception in 2008. Coverage has increased from over 300,000 poor households in 2008 to 4.4 million households in 2017. The programme has been instrumental in reducing poverty, keeping children in school, and encouraging healthy behaviours among children and women.
Some countries are investing in youth employment, which will help harness the potential of human capital in terms of wealth and savings, leading to large economic and social gains.
Despite considerable progress, social protection systems in the region are still limited.
“Around half of the population has no social protection support. Many countries still face great challenges in creating the sustainable financing needed for their social protection programmes.
One aspect of the limitation is manifest in the “missing middle” who lack social protection.
“They represent 2.2 billion people who do not qualify as extreme poor. Rather, they are primarily employed in the informal sector, and have minimal protection against unemployment, illness, disability and old age. This issue remains a major challenge, and there has been limited progress to date, said Susantoro.
To address the low level of government investment in social protection, many countries will have to revise their policies and open new fiscal space.
“Potential sources of revenue mobilisation for these countries include improving tax collection, reallocating energy subsidies, and employing natural resource taxes.
Governments, civil society, and other development partners need to immediately start long-term fiscal and financial planning for implementing the social protection agenda. Countries should also create national policy dialogues for designing national social protection systems; conduct budget and revenue reviews; and support capacity building for social protection planning, administration, and implementation, said the top ADB executive.
He said governments must also ensure social protection for older persons and systems, services and financing are in place to support young people when they leave school and enter the workforce.
“Some countries have successfully introduced universal health care insurance that includes support for the elderly. Others are starting to develop long term care systems and services. More countries must prepare and adapt to these changing demographic realities.
“I also welcome innovative responses such as the new initiative by the Government of Indonesia to introduce a pre-employment card, a scheme to help youth enter the labour market. The pre-employment card holders will get access to vocational training and competency certifications, and an incentive upon completing the training and certification, said Susantoro.
Social protection coverage must also promote inclusiveness.
“Social assistance is the main social protection instrument that supports the poor and vulnerable in the region. However, its effectiveness is often limited due to system fragmentation, partial coverage, and limited size of benefits. It often leaves disadvantaged women and children without protection against the multiple risks to which they are exposed throughout their lives.
People who work in the informal sector, persons with disabilities, and those living with HIV are also being left behind as they do not yet have access to adequate social protection such as health coverage, said Susantoro.
The four day conference brings together around 300 social protection experts and advocates from governments, NGOs, development agencies, academe, and the media to share knowledge on emerging challenges and opportunities that will affect the future of social protection in the region .
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