Eduardo KlienHelpAge International

Social Protection Floor Initiative

Hong Kong, June 2010

Social Cash Transfer as a Tool for Social Protection

Outline

• Why are Social Cash Transfers (SCT) important?

• Indications of impact

• What triggers decision-makers in adapting SCT?

Why are they important in the scope of the SPF-I?

• Social fairness• Inequalities create instability

• China’s commitment to social harmony implies redistribution of wealth. SCT is a way

• Economic reasoning• Direct contribution to growth and development of local markets

• Healthier and more educated workforce

• Political common-sense• Design of schemes needs to consider political support

• Universal approaches gain more support and are less vulnerable to corruption

Evidence of measurable improvement

• Education

- Enrolment & attendance duration in Mexico, Brazil,

Nicaragua, Zambia, Bangladesh

• Health & Nutrition - Increase in height, weight and improvement in

nutrition in Colombia, Chile, Malawi, South Africa

Evidence in poverty reduction

South Africa Social Transfers

Source: UNDESA, 2009

One type of SCT: Social Pensions

• The challenge of ageing

• 350 million older people lack income security

• In Asia only 1 out of 5 reach old age with

some formal pension

Trends in Ageing Dynamic pyramids, change every 5 years

Japan Bangladesh South Africa

Ageing

• 700 billion by 2050 in Asia (50% of total)

• Growth of older old - 1 out of 2 Japanese born today will live up to 100 years

• Feminisation of old age - 67 men for every 100 women in developing countries

• Poverty in old age - Generally larger proportion than non-olds. More vulnerable

How are Social Pensions distributed?

Brazil

Food Health Utilities & Fuel

Other household Gifts & savings Transport

Source: UNDESA, 2009

How are Social Pensions distributed?

Source: UNDESA, 2009

Zambia

Food Animals Clothes Agriculture School Other

Are Social Pensions affordable?

• Nepal – less than 1% of GDP

• Vietnam – 0.12% of GDP

• Thailand – 0.5% of GDP

• Zambia – Pilot in Kolomo – if expanded it

would cost 0.5% GNI

Key determinant

Political willPolitical will

Political willPolitical will

Social Pensions in the last 3 years(In Asia)

• Philippines – Approval of a means-tested pension scheme for 1.7 million

• Vietnam – Reduction of age of entry to 80 years and increase in the amount (200%) – Decree 67

• Nepal – Reduction of age of entry from 75 to 70 years and increase in amount

• Thailand – Increase in coverage from 1.8 to 5.4 million older people

What triggers decision-makers?Governments are the decision-makers

• Motivations vary: • Understanding of social pensions as a tool for development• Political pressure depending on contexts • political opportunity• Commitment to fairness

It helps:• Research on specific contexts

• Evidence of positive impact helps decision making• Building scenarios of affordability through microsimulation can dissipate fears of insolvency

• Building capacities• Targeted processes, mainly at government levels• Necessary involvement of Ministries of Finance, Planning and Social welfare. • Not prescriptive training but building and understanding of options mechanisms

• Involving civil society• As a force to support and influence• Cannot work isolated from governments

• Voice of rights, depending on contexts • Use of the media

• To expand social acceptance and social pressure

• To share experiences form elsewhere

• To provide a voice form the demand side

• Building Alliances

• Networks, academics, sectors within government, political parties

Thank You