Extending Social security in East and SouthEast Asia

Extending Social security in East and South-East Asia: the 2 dimensions. . . Valerie Schmitt, Jo Hyung Kyu, Celine Felix 14 September 2010 Decent Work for All ASIAN DECENT WORK DECADE 2006 -

Structure • Social security, social protection floor • ILO promotes the right to social security • The problem: a major coverage gap • How to extend social security? • What is the situation and what do we do at country and regional level?

Social security Social protection A series of public measures ; statutory / compulsory nature It also includes private measures or non statutory regimes, provided that the contributions to these schemes are not wholly determined by market forces (i. e. , redistribution) ; voluntary nature A human right (Universal Declaration of HR, article 22) Protection against financial consequences of nine contingencies : -Sickness, maternity, employment injury, unemployment, invalidity, old age, death of the breadwinner + Access to health care + Family benefits NB: « assurance de personnes » ; NOT insurance of goods / means of production … The ILO does not include Access to Education Schemes financed through contributions and taxes: -Statutory contributory social insurance -Targeted tax-financed social assistance -Universal coverage schemes Schemes financed through contributions or donations: -Certain types of private insurance -Certain types of micro-insurance -Donor-funded safety nets … Delivery: State or parastatal institutions; private entities with public mandate Delivery: Private sector, churches, NGOs …

Social security Social protection Civil servants Armed forces Private sector employees Informal economy ILO SECSOC used to work here Compulsory & contributory social insurance Voluntary private insurance (ex: pension fund) Partial contributory schemes Voluntary private insurance (ex: Micro-Health Ins. With STEP it extended its work to strategies for Informal economy and the linkages between statutory and non statutory schemes Poor and near poor Social assistance Universal access to health care Assistance from private donors, charity …

Types of Social security schemes Contributory schemes : The contributions made by beneficiaries (& employer) determine entitlement to benefits -Statutory social insurance scheme -National provident funds (lump sum to beneficiaries when particular contingencies occur, typically old age, invalidity or death) Partially contributory schemes (subsidized contributions) Universal schemes for all residents (ex: guarantee access to health care) or for specific categories of the population (ex: minimum income to the elderly above a certain age or children below a certain age). Generally tax-financed, but may require a co-payment (ex: user fees for health care) Social assistance (means tested) schemes (ex: Conditional cash transfers provide cash to families subject to the condition that they fulfil specific “behavioural” requirements; Employment guarantee schemes ensure access to a certain number of workdays a year to poor households …)

Social protection floor • A set of basic social rights, services and facilities that each member of society should enjoy • A SPF should consist of: Availability of essential services: -Housing, WATSAN, -Education/skills, -Health care supply, -Food/Nutrition, … Accessibility of these services through basic transfers in cash or in kind: -Subsidized health insurance / health cards, -Scholarships & school buses, -Minimum income support to families (family/child benefits), the working poor (cash transfers and PWPs) and the elderly (minimum pensions) … • Notion of availability and accessibility – both work hand in hand

Social security Social protection floor Social security Social protection Civil servants Armed forces Private sector employees Informal economy Poor and near poor O T H PF T RIG nd S a S S SP Floor Availability of essential services: -Housing, WATSAN, -Education/skills, -Health care supply, -Food/Nutrition, … Compulsory & contributory social insurance Voluntary private insurance (ex: pension fund) Partial contributory schemes Voluntary private insurance (ex: Micro-Health Ins. Basic transfers in cash or in kind: Social assistance Universal access to health care Assistance from private donors, charity …

Structure • Social security, social protection floor • ILO promotes the right to social security • The problem: a major coverage gap • How to extend social security? • What is the situation and what do we do at country and regional level?

ILO promotes the right to SS • Social security is a human right – Universal Declaration of Human Rights, and the International, article 22 – Covenant on Economic, Social and Cultural Rights (ICESCR), article 9 • Achieving the right to social security demands the establishment of non-contributory (for example, taxfinanced) schemes, or other social assistance measures to provide support to those individuals and groups who are unable to make sufficient contributions for their own protection • Many other arguments… social and economic stabilizer; productivity at enterprise level; impact of redistribution on consumption & domestic markets; etc. … and a basic set of social protection is affordable! political decision

2008 2009 C 102, minimum standards 89 th ILC 96 th ILC 97 th ILC Social security, a new consensus ILO Declaration on social Justice for a fair globalization Adoption of the Global jobs pact, which includes the Social protection floor “countries that do Realization of the right to social security part of ILO mandate Declaration of Philadelphia Extension of social security part of ILO mandate 2003 2001 Preamble of ILO Constitution 1952 1919 1944 ILO promotes the right to SS 91 th ILC Global campaign for the extension of social security for all not yet have extensive social security are requested to build adequate social protection for all, drawing on a basic social protection floor” Part of UN CEB 9 joint initiatives

ILO promotes the right to SS • Social security conventions and recommendations are the main tools through which the ILO promotes right to social security • « Flagship Convention » Social Security (Minimum Standards) Convention, 1952 (No. 102) – Defines nine areas of social security: medical care, sickness, unemployment, old age, employment injury, maternity, invalidity, survivors, and benefits for families with children – Sets minimum standards for each of these branches • Other up-to-date conventions – – Employment Injury Benefits Convention, 1964 (No. 121); Invalidity, Old-Age and Survivors’ Benefits Convention, 1967 (No. 128); Medical Care and Sickness Benefits Convention, 1969 (No. 130); Employment Promotion and Protection against Unemployment Convention, 1988 (No. 168); – and Maternity Protection Convention, 2000 (No. 183). – In addition, the Equality of Treatment (Social Security) Convention, 1962 (No. 118), makes provision for the equality of treatment between national and non -national workers with regard to coverage by the branches of social security

Structure • Social security, social protection floor • ILO promotes the right to social security • The problem: a major coverage gap • How to extend social security? • What is the situation and what do we do at country and regional level?

Coverage & resource gap • Only about 20 per cent of the world’s working-age population (and their families) have effective access to comprehensive social protection • Three dimensions of coverage (& gap) – Scope. Number and type of social security branches to which the population of the country has access – Extent. Percentage of persons covered within the whole population for each branch – Level. Adequacy of coverage by a specific branch of social security – Distinction between legal and effective coverage (often lower : enforcement issues and resource gap) • Limited coverage linked with a resource gap: countries especially in Asia do not invest enough in social security – However a basic SPF (universal pension, child benefit, basic HC, employment guarantee scheme) is affordable (in selected Asian countries: between 4 and 8% of GDP)

SOURCE: (ILO, 2010)World Social Security Report Providing coverage in the time of crisis and beyond Preliminary version, 15 March 2010 Coverage & resource gap Percentage of population legally covered by social health protection Some exceptions such as UCS in Thailand

Coverage & resource gap Legal and effective coverage for old age pensions Effective coverage

Coverage & resource gap How much do countries invest in social security? In Asia the benefits of growth have not been equitably shared 5. 3% of GDP

Structure • Social security, social protection floor • ILO promotes the right to social security • The problem: a major coverage gap • How to extend social security? • What is the situation and what do we do at country and regional level?

How to extend social security? The Social Security Staircase 100% full coverage Vertical dimension (higher levels of benefits for those who can contribute) Voluntary private insurance Intermediate coverage Partially contributory & linked schemes Statutory contributory social insurance Basic benefits / social protection floor for all. Basic Non contributory for the poor; other groups may contribute … coverage Poor and Informal Private sector Civil servants near poor economy employees Armed forces Horizontal dimension (SPF & schemes for informal economy)

How to extend social security? The social protection floor initiative • SPF-I = one of the 9 UN CEB initiatives (April 2009) to face the crisis and accelerate recovery – Lead agencies: ILO and WHO • At global level: – – – A SPF Advisory Group headed by Mrs Bachelet A manual & strategic framework developed jointly SPF success stories A flagship Global SPF Report under preparation Knowledge sharing through the GESS platform • At country level: establishment of SPF team … 1 st lead by the ILO = SPF team in Thailand – SPF success stories, Development Cooperation Seminar (DCS) on the SPF in October, SPF assessment to be conducted jointly

How to extend social security? The social protection floor in Asia India: RSBY, NREGA Cambodia: CARD’s SP strategy for the poor and the vulnerable with clear reference to the SPF … including HEFs, CBHIs, Food distribution, Cash transfers, PWPs… China: minimum living standard guarantee program; new rural corporative medical care (NRCMC); health insurance for urban uninsured residents (HIUR); rural old-age pension Lao: extension of SHP for all Thailand: UC scheme, minimum pension scheme (500 THB) Vietnam: 10 years Social protection strategy

Structure • Social security, social protection floor • ILO promotes the right to social security • The problem: a major coverage gap • How to extend social security? • What is the situation and what do we do at country and regional level?

Situation in Thailand 76% population * maternity, invalidity, death, Extension of 5 sickness and old age benefits to Informal benefits Economy* (article 40) UCS since 2001 (health) and 500 Bath scheme (pension) since 2009… Social assistance Poor and near poor Informal economy Provident fund system -Govt P Fund -Private school teachers WF Workmen’s Compensation Fund (WCF) -Social Security Fund (SSF) -Non contr. pension sch. -CS Medical Benefit Sch. Private sector employees Civil servants Armed forces • Challenges to extend coverage to IE workers (+/- 60 people joined) • Fragmentation of social security schemes • Inequalities have increased over past years … Capitation amount under UCS = 2, 200 THB/capita whereas under CSMBS = 12, 100 THB/capita

ILO’s implication in Thailand Vertical dimension Advice / extension of social security to IE workers? Technical assistance: (1) Financial Management of the Thai Health Care System (EU project) – finished 2009 (2) Actuarial Valuation of the Old-Age Pension Branch of Social Security Scheme (KIHASA) - ongoing Facilitation of SPF Team - ongoing Policy advice on: (1) Pension reform (M. Cichon) – July 2009 (2) 10 years of implementation of UCS – planned in 2011 Horizontal dimension

Situation in Cambodia 80% population Scattered CBHI schemes NSSF -Only work injury -Health insurance under study Scattered social assistance programs: Health Equity funds and others Poor and near poor Informal economy Private sector employees NSSF-C -Only pensions -Health insurance under study Civil servants Armed forces • CARD’s National Social Protection Strategy for the Poor and Vulnerable • CBHI very limited coverage (100, 000 people) • NSSF and NSSF-C provide very limited scope of coverage

ILO’s projects in Cambodia Vertical dimension Feasibility studies of Social health insurance for private sector and civil servants through the ILO-EU project Nothing for IE workers… Support to MIS for NSSF work injury scheme NSPS: drafting (reference to the social protection floor); documenting the process (SPF Success story); costing of the strategy (ILO-EU project) Horizontal dimension

Situation in Viet Nam Vertical dimension 75% population Voluntary scheme for SME and IEco (35, 000 people!) Voluntary subsidized HI 11 million people covered Some social assistance (1. 23% population) Poor and Informal near poor economy Mandatory Social Insurance old-age pensions, disability, health, sickness and unemployment insurance 9. 4 million workers i. e. 18 per cent of the total workforce Mandatory Health insurance 30 million people covered State owned enterprises, public and private sector Horizontal dimension • National Social Protection Strategy for the ten coming years (2011 -20). . Objectives: Universal health insurance by 2014; increase coverage of informal economy; social protection floor for all …

ILO’s projects & plans in Viet Nam Vertical dimension Role of SPF Advisory group? ? ILO plan : Piloting (STEP expertise) Implementation of Unemployment Insurance through 2 projects (800, 000 US$, 1 UN fund & ILO-Japan) ILO plan: Support to the implementation of the national social protection strategy & the development of a Social protection floor (Resource Gap) Horizontal dimension

Situation & ILO’s plan in Indonesia 83% population Jamsostek pilot project (400, 000 p. covered) Jamsostek Taspen Asabri Jamsostek Askes Own hospitals Jamkesmas (76. 4 million p. covered) CCTs / UCT; Rice for the poor; Scholarships; Community Empowt prog. Poor and near poor Informal economy Private sector Civil servants employees Armed forces • National social protection strategy for the ten coming years • Objective of universal HC coverage by 2014 (already 46% in 2009) • Fragmentation of Social assistance ; challenges for IEconomy ILO plan: Support to the implementation of the national social protection strategy & Indonesian Jobs Pact through policy work, piloting, capacity building and increasing coordination (Resource gap)

Situation & ILO’s project in Lao PDR 88% population SSO (8 benefits) Health Equity Funds Poor and near poor SASS Scattered CBHI schemes Informal economy Private sector employees Civil servants Armed forces • 7 th Social Economic Development Plan (NSEDP) includes extension of social security for all by the year 2020 • Merger of SSO-SASS and CBHI-HEF merger of the 4 schemes ILO New project : 1. Support Lao PDR’s efforts towards the extension of social health protection, even if at a modest basic level, to the whole population … 2. Pave the way for the future implementation of more comprehensive social protection benefits for all the population by supporting the continuous development of social security schemes (4 Mo. US$, 3 years; waiting for Luxembourg’s approval)

Regional Level Activities • Support / promotion of UI / EI schemes (ILO-Japan ASEAN project + Feasibility in Malaysia and Philippines) • Synergies // SP Floor teams: Thailand, Cambodia, Viet Nam …Willingness in Lao PDR and Indonesia • Two regional training on (1) SPF; (2) Quantitative tools and methods • Two awareness raising tools (schools, private enterprises) • Knowledge sharing: GESS platform; ROAP website

Develop synergies with: • Active Market Labour Policies & LED • CSR & French multinationals • HIV-AIDS • Green Jobs Research, workshops, joint projects?