Asia and Pacific's 'Missing Middle' lacks social protection
Social protection systems in many fast-growing middle-income
countries in Asia and the Pacific are failing to support large numbers
of poor and vulnerable people, leaving them exposed to risks and
unexpected difficulties such as unemployment, ill health, and natural
disasters, a new Asian Development Bank (ADB) study noted.
"There are many vulnerable groups, including women and informal
sector workers, who can't access unemployment, health or other social
insurance but are also not poor enough to be eligible for social
assistance such as cash transfers," said a Director in ADB's Regional
and Sustainable Development Department, Bart Édes.
"Government social protection programs need to be expanded to cover
this unprotected 'missing middle,' who are at risk of falling into
poverty in case of an economic, environmental, or health shock of some
kind."
The study, which analysed government programs providing social
insurance, social assistance, and labour market support in 35 countries
across Asia and the Pacific, showed varied spending patterns across
income groups and sub-regions.
A few countries - Japan, the Republic of Korea, Mongolia, and
Uzbekistan - have Social Protection Indexes that are higher than 0.200,
meaning that they are already investing 8% of their gross domestic
product (GDP) on social protection programs.
However, spending in most middle-income countries, including Armenia,
Fiji, India, Indonesia, Pakistan, the Philippines, and Samoa, remains
below 3% of GDP.
The study noted that because social insurance tends to dominate
government social protection spending, benefits accrue
disproportionately to men and non-poor. Poor and disadvantaged persons,
particularly those working in the informal sector, benefit less because
they lack access to social insurance. They are instead targeted by
social assistance programs that in many countries are fragmented and
provide inadequate transfers.
Relatively little is being spent on labour market programs such as
cash-for-work and skills development. This needs to be addressed amidst
rising youth unemployment, critical skills gaps, and the
disproportionate number of women who are unable to enter the formal
labour market.
Areas for government attention include employment guarantee schemes
to construct or rebuild basic infrastructure, skills development, and
technical and vocational education and training.
Countries at various stages of development need to set their own
targets, taking into account available public resources. However,
governments need to accelerate the review and reform of pension schemes
in view of the region's huge informal sector and rapid aging. Preventive
social protection programs such as micro-insurance schemes to cushion
the impact of variable weather patterns and natural disasters should
also be explored, the study said.
Expanding social protection coverage needs mobilisation of additional
public revenue which can be secured by broadening the tax base,
improving tax collection, and improving public expenditure management.
Governments should also encourage private firms to contribute more to
social insurance programs.
After many years of high growth, the Asia and Pacific region is in an
excellent position to invest in better social protection systems that
are attuned to the needs of its people.
The new Social Protection Index was prepared by ADB and development
partners; the Organisation for Economic Cooperation and Development
(OECD); the OECD Korea Policy Centre and the International Labour
Organisation. It provides detailed information on the extent of social
protection public expenditure, population coverage, and the impact on
specific groups, including the poor and women.
It allows governments to assess the effectiveness of programs, and
provides guidance for improvements to social protection systems. |
