Equity in MENA and Latin America from a comparison perspective – the

role of social protectionFabio Veras Soares

International Policy Centre for Inclusive Growth – IPC-IG

(www.ipc-undp.org)

Inequities in LAC and MENA Latin American countries are well known for their high level of inequalities.

Recent reforms of the social protection system have tried to curb poverty as wellas to address inequities of the social protection system and to facilitate access to social services.

MENA countries have much lower inequality but they are facing challenges withthe current design of their social protection programmes.

Recent reforms (or talk of) suggest that (some) countries in the MENA regionwant to learn more from LAC experience and adapt certain reforms to theircontext.

Source (Cedlas) https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCcQFjAB&url=http%3A%2F%2Fcedlas.econo.unlp.edu.ar%2Fdownload.php%3Ffile%3Darchivos_upload%2Fdoc_cedlas151.pdf&ei=lWqOVM7KIMz4UvDOgsgO&usg=AFQjCNEOrz59qWZjzooZZL6YLTDlQR0Cww&sig2=JhOdV9XHEQuId6E40WHMnw&bvm=bv.81828268,d.d24

Source (Cedlas) https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCcQFjAB&url=http%3A%2F%2Fcedlas.econo.unlp.edu.ar%2Fdownload.php%3Ffile%3Darchivos_upload%2Fdoc_cedlas151.pdf&ei=lWqOVM7KIMz4UvDOgsgO&usg=AFQjCNEOrz59qWZjzooZZL6YLTDlQR0Cww&sig2=JhOdV9XHEQuId6E40WHMnw&bvm=bv.81828268,d.d24

Source: ECLAC 2013 Social Panorama

Inequities in LAC and MENA ECLAC classifies countries in Latin America into three groups as per their

investments social policies (health and education) and in social protection:

Group I: higher level of per capita investment in social protection and social policies, high investment in social security and assistance, higher investment in health (similar as education) – Argentina, Brazil, Chile, Uruguay, Costa Rica and Panama.

Group II: medium level of per capita investment in social protection and social policies, medium level of investment in social security and assistance, lowinvestment in healh (half of level in education): Mexico, Colombia and Venezuela

Group III: low level of per capita investment in social protection and social policy, low investement in social security and assistance, low investment in healt (half of the level of education): Bolivia, Equador, El Salvador, Nicaragua, Paraguay, Peru and Dominican Republic

Source: ECLAC

Inequities in LAC and MENA MENA countries spend relatively more with social protection (or SSN) than LAC

countries…

However these expenditures tend to be less progressive due to their focus on fuel and food subsidies.

Excluding fuel and food subsidies there are somewhat similar level of investment, but with very different results….

Social security: sustainability issue, pay as you go system for formal sectorworkers and public servants, high reposition rates, almost no coverage of informal sector, and scattered schemes.

Social assistance: focus on food subsidies, categorical and geographical targetingand undercoverage of the poor and high levels of leakage.

World Bank (2012)

World Bank (2014): http://documents.worldbank.org/curated/en/2014/05/19487568/state-social-safety-nets-2014

Spending on SSN and Fuel Subsidies

Source: IMF 2011, Elaboration: Markus Loewe (2014)

0 2 4 6 8 10 12 14 16

Egypt

Algeria

Yemen

Jordan

Tunisia

Bahrain

Moroco

Syria

Oman

Mauritania

Pension schemes

Health system

Cash for work

Social assistance

Child allowances

Food subsidies

Energy subsidies

World Bank (2012) – MENA DEVELOPMENT REPORT - Inclusion and resilience :

Inequities in LAC and MENA Two key issues with SSN programmes: progressiveness of

the transfers and low coverage.

Exceptions: The Sadat Pension in Egypt, the Social Welfare Fund (SWF), PNAFN in Tunisia, Tayssirprogramme in Morocco… but some still suffer of problems of coverage: quotas, unclear targeting and categorical focus on the unable to work undermine coverage of poor and vulnerable children.

Inequities in LAC and MENA In comparison to other world regions, there is clear

underperformance in the Arab region social assistance and SSN programmes in terms of beneficiary incidence.

Exceptions: The Sadat Pension in Egypt, the Social Welfare Fund (SWF), PNAFN in Tunisia, Tayssirprogramme in Morocco… but some suffer still of problems of coverage: quotas, unclear targeting and categorical focus on the unable to work undermine coverage of poor and vulnerable children.

Inequities in LAC and MENA Example from the Yemen targeting assessment of the Social Welfare based on

the NSPMS data (based on Figures on the next slides).

Figure NSPMS (1) shows that programme age-pyramid resembles that of the target population.

However, Figure NSPMS (2) shows that the age-pyramid of the extreme poor and of the poor does differ from those of categories of the SWF shown in NSPMS (1) – children are more likely to be among the poor and extreme poor.

The adoption of the a Proxy Means Test (PMT) improved the SWF targeting of the inclusion of more households with children among beneficiaries. In Figure NSPMS (3), new SWF beneficiaries – who were subjected to the PMT – had more families with children. But NSPMS (3) age pyramid still differs a lot form age pyramid of the poor and extreme poor NSPMS (2).

It is necessary to expand social protection programmes for children in Yemen to improve their targeting.

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Yemen NSMPS (1): Age pyramid for SWF beneficiaries and SWF categories

(10) (8) (6) (4) (2) 0 2 4 6 8 10

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Female Male

SWF beneficiaires

(10) (8) (6) (4) (2) 0 2 4 6 8 10

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SWF categoriesSource: NSPMS Final report (http://www.ipc-undp.org/pub/html/TP08_Yemen_National_Social_Protection_Monitoring_Survey_2012_2013/#6)

17

Yemen NSMPS (2): Age pyramid for the extreme poor and the poor

Extreme Poor Poor

(10) (8) (6) (4) (2) 0 2 4 6 8 10

05

10152025303540455055606570758085

Female Male

(10) (8) (6) (4) (2) 0 2 4 6 8 10

05

10152025303540455055606570758085

Female Male

Source: NSPMS Final report (http://www.ipc-undp.org/pub/html/TP08_Yemen_National_Social_Protection_Monitoring_Survey_2012_2013/#6)

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Yemen NSPMS (3): Age pyramids – Old and New SWF beneficiary

Old SWF beneficiary New SWF beneficiary

(10) (8) (6) (4) (2) 0 2 4 6 8 10

05

10152025303540455055606570758085

Female Male

(10) (8) (6) (4) (2) 0 2 4 6 8 10

05

10152025303540455055606570758085

Female Male

Source: NSPMS Final report (http://www.ipc-undp.org/pub/html/TP08_Yemen_National_Social_Protection_Monitoring_Survey_2012_2013/#6)

Inequities in LAC and MENA

The key point of the experience of Latin American has been the extension of different social protection mechanisms in a coordinated way.

Expansion of the Social Protection programmes to coverfamilies with children.

Single registries or integrated databases have had a greatimpact on the improvement of the effectiviness of thesepolicies

MIS systems and regular monitoring and evaluation have provided the evidence to support these policies

Thanks