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| [PHOTO: Mistagrrr / Flickr / CC BY 2.0] |
Manila: Social protection systems
in most Asian countries fall far short of meeting the needs of the poor and
vulnerable even though better safety nets can be affordable for poorer
countries, says a new study from Independent Evaluation at the Asian
Development Bank.
Despite high economic growth in much of the
region, public spending on social protection in Asia and the Pacific is lower
than in any part of the world except for sub-Saharan Africa.
Recent economic and financial crises, food and
fuel emergencies, and the rapidly increasing frequency of natural disasters
have starkly exposed the inadequacy of the region’s national social protection
systems to guarantee a minimum level of subsistence and meet people’s basic
needs.
The evaluation study—Asian Development Bank:
Social Protection Strategy—finds convincing evidence that social protection
programs, and especially well-designed safety nets that transfer resources to
the poor, can reduce the depth and severity of poverty and inequality.
“Governments around the world tend to scramble
to adopt social protection programs in times of crisis,” says the Director
General of Independent Evaluation Vinod Thomas. “But comprehensive systems
built in stable years are much more effective in coping with the human impact
of future economic or political crises or natural disasters.”
Widening wealth gaps are also drawing
attention to the need for greater social protection in Asia, where income
disparities over the past two decades have widened in 11 countries that account
for more than four-fifths of the region’s population.
All countries spend on the poor in some form
or another, although there are considerable country variations in the levels
and effectiveness of the spending. Concerns over the cost of universal social
protection are deterring some countries, but well-targeted safety nets are not
prohibitively expensive, says the study.
In the Philippines, for example, the
government’s conditional cash transfer program to uproot extreme poverty costs
less than 0.5% of the country’s gross domestic product, yet reaches 15 million
people.
The program makes regular cash payments to
mothers conditional on their children attending school and public health
clinics. After just three years of implementation, evaluation findings show
positive results on elementary education school enrollment and beneficiary
households spending more on the health and education of their children.
While safety nets, and particularly
conditional cash transfers, can reduce poverty, some countries still prefer to
retain food and fuel subsidies for their social programs. In India, the
government distributes food, fuel, and fertilizer instead of cash, but these
subsidies are vulnerable to misuse and leakage. In addition, such subsidies
generally cost more, benefit the better-off relative to the poor and are
politically difficult to unwind.
Rapid social and demographic changes are
highlighting the need for affordable pensions, health insurance, and childcare.
Governments across the region are trying to respond to these challenges. As
such, social protection needs to be higher on their development agenda.
“While Asia has traditionally relied on the
extended family to provide protection, this is proving inadequate and
declining,” says the study’s principal author Joanne Asquith.
The Asian Development Bank’s experience in
helping countries build comprehensive social protection systems—which began in
response to the Asian financial crisis—suggests that governments are generally
reluctant to borrow for social protection except in times of crisis. Indeed,
lending surged during the global economic crisis of 2008–2010, but then sharply
declined.
Says Asquith: “Social protection systems are
not best built by providing a one-off response to a crisis, but that’s when
political support for social protection is usually highest.”
“Development partners need to step up their
engagement with governments to sustain political support for social protection
in stable years,” she says.
Because social protection is an integral part
of ADB’s strategy to reduce poverty and promote inclusive growth, the study
recommends that ADB, in partnership with others, strengthen its support for
this area.
ADB’s portfolio of loans for social protection
projects and programs totaled $2.2 billion between 2002 and 2011.