Social Protection: A Key Instrument for Inclusive Growth

Three questions will be answered during the live chat: What is the current state of social protection systems and programs in Asia and the Pacific region? How can countries expand and strengthen social protection to cover its poor and vulnerable populations? Why are social protection programs important in times of disasters?

Date: 18 July 2013

Transcript

Sean Crowley: Hello and welcome to ADB’s live chat “Social Protection and Inclusive Growth”. I’m Sean Crowley from ADB’s Department of External Relations. I’m joined today by Sri Wening Handayani, Principal Social Development Specialist at ADB and her colleague Michelle Domingo-Palacpac, a Senior Social Development Officer here at the Bank.

Hi to both of you!

Michelle Domingo: Hi, Michelle here.

Sri Wening Handayani: Hi. This is Sri.

Sean Crowley: So, to kick off, here's a question already sent to us. ADB is advocating significant increases in spending on social protection. Where can cash-strapped governments, realistically find the funding?

Sri Wening Handayani: Thanks for the question. Well, this is true that designing efficient, effective and fiscally sustainable social protection systems and programs is a challenge for developing countries. However, countries can create fiscal space for financing social protection or other social sector as well as improve the effectiveness and efficiency of existing social protection programs.

Sri Wening Handayani: For example, some ways of doing this include expanding the tax base and increase tax collection.

Michelle Domingo: To add to that, we should also note that while social protection programs entail cost for the Government in the short-run, these programs contribute to economic gains like increases in productivity in the long-run.

Jeff M.: Hi there. I'm a graduate student doing my thesis on social protection in Asia. Can you tell me what sort of social protection programs is ADB involved in? And in which countries?

Michelle Domingo: ADB supports different forms of social protection - some in social assistance like Conditional Cash Transfers (in the Philippines and Pakistan); in social insurance supporting pension reforms and some labor market program intervention for skills development

Lau: I believe in social protection. I believe it is a good way to drive inclusive growth. However, I also have the impression that it may not be sustainable -- unless, as we drive social protection, we are simultaneously helping the poor help themselves. For example, by helping them create a sustainable livelihood so that they may save up and buy insurance from accidental death on their own. How good are we doing in terms of coordinating these efforts? Do you plan your social protection projects in the larger context of helping the poor help themselves?

Michelle Domingo: Social protection covers various interventions, social assistance is the category that directly addresses the most vulnerable and poor, however as what has been done in the case of the Philippines for example, social assistance programs is linked to the overall poverty reduction strategy. This means linking the beneficiary families to livelihood programs, skills development so they are able to have opportunities to increase their income.

Manoranjan Pegu, Public Services International: Does social protection include workers and laborers working in inhuman conditions in ADB projects? Do you think that the current AM mechanisms is apt to address Occupational health and safety issues and inhuman work conditions of workers? Can labor unions be included in the drafting of Safeguard Mechanisms?

Sri Wening Handayani: Thank you very much for this good question. ADB's Social Protection Strategy 2001 includes protection of workers. Our infrastructure projects address the protection of workers through the compliance of internationally recognized core labor standards and/or applicable national labor laws and regulations. On the Safeguard Mechanism question, we will pass this along to our Safeguard Unit.

Christine I.: With corruption rampant in developing countries, what can be done (by ADB or other groups) to ensure that the poor and the vulnerable are protected?

Sean Crowley: ADB's recent report also talks about the need to broaden coverage of social protection spending to cater to groups currently missing out (the missing middle). What practical steps can governments take to expand coverage and improve targeting to reach those who are currently without support?

Michelle Domingo: On corruption, increasing transparency can be integrated in the design of social programs to reduce opportunities for corruption. There are some examples that can be learned from experiences of countries in Asia and the Pacific, for example, using IT in improving payment systems, and targeting. Putting in place good monitoring systems can also help increase transparency. ADB and also other NGOs have been involved in supporting policies and programs to improve governance.

Sri Wening Handayani: The missing middle captures those that are not too poor to benefit from social assistance programs. Given the huge informal sector in the Asia and Pacific region, majority are poor and vulnerable. There is a need to expand coverage of social insurance programs to cover also those working in the informal sector.

Lau: Thank you, I am happy to learn that your social protection projects fall under the larger umbrella of poverty reduction. You mentioned that investment in social protection projects result in increase in productivity in the long-run. Can you give a ballpark figure for both the size of investment and timing of return of investment? A good reference point from the region will help.

Sri Wening Handayani: Thanks for the question Lau. But in our study on social protection index, we don't have figures on the size of investment and timing of return of investment.

Monching: Who is better in providing social protection - government or private sector? Shouldn't the private sector take this over from the government as it will be more efficient?

Michelle Domingo: Government and private sector both have important roles to play in expanding social protection. Private sector can reduce the burden for the Government to finance social protection by helping improve coverage of social insurance programs which can cover pensions, sickness, disability benefits, unemployment insurance.

Chloe Marie: How can social protection programs provide coverage for disaster relief? How do you identify the potential/intended beneficiaries?

Sri Wening Handayani: This is a critical challenge to social protection. Asia and the Pacific is more affected by natural disasters than any other region of the world (accounting for about half of the total global economic losses during 1992-2001). Disaster relief is usually in a form of social assistance that includes temporary emergency programs designed to reduce the effect of sudden and severe shocks. Usually, the beneficiaries are easily identified because they are the ones who are directly affected by disasters.

Teresa: In ASEAN, which countries have better social protection and which have the worst? What kind or level of protection do the better off enjoy and what do those who are worst off lack?

Sri Wening Handayani: All ASEAN countries have some form of social protection programs. The dominant social protection program is social insurance or contributory scheme. The finding in the social protection index show that as the richer the country, the more they spend on social protection programs. There is also some good practices in ASEAN on social assistance programs. For example, Indonesia and the Philippines have provided conditional cash transfers for the poor while Viet Nam has a social pension program for the elderly and Thailand has universal health insurance program.

Jeff M.: Thanks Michelle. The SPI report claims that the poor receive more benefits, relative to poverty line spending, than the non-poor for social assistance programs only. How does that square with ADB's anti-poverty mandate?

Michelle Domingo: Since social assistance programs directly target the most vulnerable and poor population, benefits accrue more to the poor. The gap is in social insurance which benefits more the non-poor as this is in most cases tied to formal employment. The huge number of poor that are found in the informal sector are not covered. ADB supports building up social protection systems as part of its inclusive growth agenda to also address poverty reduction.

Mitch: There is the view that poor people receiving money from the government, such as through cash transfer programs, will develop the tendency to depend on it and live at its expense or ask for alms and favors for the rest of their lives thereby depriving them the urgency to be self-sufficient. What is your view on this? Can we guard against such tendencies in implementing projects such as the cash transfer program?

Sri Wening Handayani: Thanks Mitch. We don't think that this assumption is valid. Most of the cash transfers given to the poor are quite small and they cannot live based on that cash transfer only. In the design of the conditional cash transfer programs there is a graduation strategy when they reach the above minimum poverty level they will cease to be beneficiaries of the program.

Duc Long: Is ADB advocating tax increases, considering that the report indicates that governments need to mobilize more public revenue to give them the fiscal space for more social protection spending?

Michelle Domingo: Taxes are important in revenue generation in all countries, developing and developed countries are the same in this aspect. The expansion of the tax base is a requisite condition for all countries; however, this is not the only source for creating additional fiscal space. The government also has the opportunity to review its subsidy programs, rationalize its highly fragmented social protection programs (with some countries having more than 25 programs in place), and replace programs that are not effective with more efficient forms of social protection. The private sector should also be tapped to provide more in terms of its share for increasing social protection coverage for their employees.

Josh D.: What kind of social protection does a poor family have to expect from their government? How much is enough?

Sri Wening Handayani: Thanks for your question Josh. Well, there is no one-size-fits-all approach. It will depend on the historical legacy of the country as well as the financial and institutional capacity to design and implement social protection programs. In Asia and the Pacific region, most of the poor get social assistance from governments such as cash transfers, health assistance, scholarships etc.

Madison Pond: The report talks about the disaggregation of the SPI by poor and the non-poor. What defines these two groups?

Michelle Domingo: The poor and non-poor categories in the SPI report are defined based on national poverty lines. The beneficiary with per capita expenditure or income above the national poverty line is considered as "non-poor", and below this the "poor".

Guest: As many populations age, how can governments in developing countries provide social protection given the tremendous financial burden they face in relation to affordability of pension schemes?

Michelle Domingo: Countries in developing Asia and the Pacific are in a good position to strengthen their social protection systems. Investments to improve social insurance programs such as contributory pension schemes can be done in partnership with the private sector to free up Government resources. Government can focus on improving non-contributory pension schemes which can address the needs of those not covered by contributory schemes. Another area where investment has been little in this region is on labor market programs. Skills development, training and retraining programs help improve access to jobs -- which would not entail too much cost for the Government.

Ma Mu: Some CCT [conditional cash transfer] programs fail when there is a change in leadership in the country. Is there a way to get around this, or at least minimize the chances that CCT programs will fail because of political reasons?

Sri Wening Handayani: Good question Ma Mu but I am not aware of any CCT program that failed because of change in leadership in the country. For instance, most countries in Latin America e.g., Brazil, Mexico, Peru etc., they have been implementing the CCT programs for about 10-20 years already under many different administrations. Good monitoring and impact evaluation will ensure continuity of the program.

Lau: In the Philippines, flooding occurrences are fairly predictable. We know how many typhoons enter our country each year, and how many make landfall and where. This makes planning for social protection programs on flooding fairly predictable as well. Assuming that planning can be easily done, the problem that remains is implementation. What do you think are the main barriers for implementing these types of programs?

Michelle Domingo: A common problem across developing countries is the lack of institutional capacity to carry out well designed programs. So this is not just about the availability of financing. Successful programs are designed with investments on institutional capacity building for more effective delivery. Also, implementation of these programs should be linked to national development programs and not implemented in silos.

Sean Crowley: We'll be winding up this live chat in a few minutes, so if you have any final questions, please ask then now!

Lau: What social protection programs are now being implemented by ADB with regards to disaster relief?

Michelle Domingo: One area that ADB is supporting on disaster relief is preventive social protection programs such as micro-insurance for small holders, and weather-indexed based crop insurance that is being piloted in Bangladesh.

Sean Crowley: Thank you very much to all of you who have contributed and participated today. We have gone over time, so we'd like to invite you to send any further questions to scrowley@adb.org or contact us via Facebook or twitter. Until the next chat!

Michelle Domingo: Thanks for all your question and interest on social protection.

Sri Wening Handayani: Thank you and goodbye.

Sri Wening Handayani
Sri Wening Handayani, Principal Social Development Specialist serves as the focal point for social analysis and social protection in Regional Sustainable Development Department of ADB. She promotes knowledge on social dimensions and social protection, and supports external relations and coordination with development partners. She has been instrumental in numerous publications including the recently published Social Protection Index: Assessing Results for Asia and the Pacific (2013), Handbook on Poverty and Social Analysis (2012), Social Protection for Older Persons: Social Pensions in Asia (2012); The Revised Social Protection Index: Methodology and Handbook (2011). She has a PhD in sociology from the University of Missouri.
Michelle Domingo-Palacpac
Michelle Domingo-Palacpac, Senior Social Development Officer, supports ADB's initiatives in promoting inclusive growth by strengthening the knowledge base on social protection in the Asia and Pacific region. Prior to joining the social protection team in 2013, she was involved in the regional program on the Millennium Development Goals with UNESCAP and UNDP. She was consultant for Child Fund developing projects at the community/village levels of the tsunami-stricken and conflict –affected areas in Indonesia and Afghanistan. Michelle holds an undergraduate degree in Economics, a Master in Development Economics and is currently pursuing her doctorate in Public Policy and Administration at the University of the Philippines.