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p. 4 of 18 BACK | NEXT I. Introduction II. Overview of Social Protection A. Social Risks and Social Protection B. Characteristics of the Asia and Pacific Region C. The Components of Social Protection D. Social Protection Systems in the Asia and Pacific E. The Experience of ADB and Other Aid Agencies III. Priorities for Social Protection IV. Operational Implications V. Recommendation

Social Protection Strategy : II. Overview of Social Protection

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B. Characteristics of the Asia and Pacific Region

1. Asia is a largely young, rural, and poor continent: social protection programs and policies should be built to respond to Asia's needs. The Asia and Pacific region does not have adequate protection systems in place to reduce the impact of shocks on its population; as a result, risks will continue to have devastating implications for poverty, inequality, and the prospects of long-term growth. Social protection schemes should be planned on the basis of a thorough assessment of needs across the entire range and the costs of meeting them in the short, medium, and long term in a sustainable manner. Demographic trends have important implications for this process. The Asia and Pacific region is still experiencing the effects of the demographic explosion; the total population is 3.1 billion, of which 40 percent are children and youth. Figures 1 to 4 reflect the most pronounced general effects. The demographic transition has started in Asia with a progressive decrease in the number of infants and a progressive increase in the elderly. However, the major issue in the years 2000-2015 will be the predominance of children and the young new entrants into the labor market. In 2000, 30 percent of the population was below 14, which is projected to fall to 25 percent by 2015, still a remarkably high proportion. According to the international definition of children (0-18), this group comprised as much as 40 percent of the total population in 2000, and is expected to decline to 34 percent in 2015⁴. This has clear implications for education, health, population, child protection, and labor market policies for the realization of human potential and the creation of opportunities for self-reliance to transform the vicious cycle of poverty into a virtuous cycle of growth and human development.

2. In contrast to the developed regions and the industrialized countries in Asia, people over 65 comprise only about 5.5 percent of the total population of developing Asia. This percentage is expected to rise gradually to 7.2 percent by 2015 as fertility rates fall and life expectancy increases⁵. At present, older people in Asia reside primarily in rural areas, but with urbanization trends the percentage of older people living in rural areas is expected to decrease. Moreover, the decrease in the percentage of older persons living in extended families will leave more elderly living alone thus forcing them to look for assistance for housing and living standards from Governments and NGOs. Policy makers will need to plan for labor market and other social assistance and social insurance schemes. The considerable size of the workforce combined with decreasing fertility rates could indicate that the Asian countries will likely face serious old-age challenges in 25 to 30 years, as the dependency ratios will be negatively affected. However, old-age policies should not be precipitated but carefully evaluated; the fact that most of the population remain children and working age people allows many policy design options. Short-term priorities remain addressing the urgent social issues of supporting children and poverty reduction.

3. More than 60 percent of the population in Asia lives in rural areas. Most of the poverty in the region is also rural-based, although urban poverty is increasing. About 900 million people, 30 percent of the population of the Asia and Pacific region, are poor. More women than men live in poverty and poverty is increasingly a condition found among older persons. Social divisions of a class, caste, ethnic, or racial nature are often intensified by differing poverty levels; and recently arrived immigrants tend to be poorer than others. Further, the high levels of poverty in Asia constrain the expansion of traditional social protection instruments given that these products are not affordable or attractive to the poor. The priorities of the poor are sustaining their sources of livelihood; securing food, shelter, and clothing; avoiding natural disasters; and maintaining the health of the breadwinner–and not, for instance, old-age insurance.

4. The new century starts with profound changes. Globalization is shifting trade, capital, technology and information flows, changing values and social structures. The increased opportunities resulting from access to new ideas, goods, services, and technology are also accompanied by increasing risks. Interdependence may lead to possible economic shocks and downturns; if no social policies and safety nets are in place, countries may experience mounting unemployment, poverty, marginalization, and political conflict. Most of the political opposition to globalization is due to the absence of adequate transitional compensation systems, which makes implementation of reforms very difficult given that populations may have to pay the costs of reform in the short term. Globalization requires the development of effective social protection systems in both developed and developing countries. The world's forward-looking development agenda gives social protection a primary role to sustain growth and well-functioning markets.

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