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p. 7 of 17 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

Social Protection Strategy : II. Overview of Social Protection

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E. The Experience of ADB and Other Aid Agencies

31. In response to the critical need to address vulnerability in development, following the experience of poverty reduction programs in the regions where they operate, multilateral and bilateral aid agencies produced different definitions of social protection. The World Bank definition of social protection is based on social risk management; the Inter-American Development Bank (IADB) emphasizes social protection as a means to address macroeconomic and catastrophic shocks; the United Kingdom Department for International Development (DFID) uses a rights-based approach to define social protection, with an emphasis on promoting integrated livelihoods. ILO, which is the senior agency dealing with social protection topics, maintains a structured view of social security based mostly on social insurance and labor standards.

32. ILO was founded in 1919 to promote social justice and ensure effective social protection systems among its member countries, provide social and economic security, implement fundamental labor rights, increase work opportunities, and strengthen social dialogue. The definition of social security and the focus of ILO’s work have changed often during the last eight decades. ILO has recently adopted as its strategic objective to enhance coverage and effectiveness of social protection for all, by focusing on income security with an emphasis on the poor, identifying cost-effective and equitable ways by which social protection can be extended to all groups, and shifting from a state-led focus to emphasis on provision of social protection to the informal sector.⁹ However, social protection is still conceived mainly in terms of labor and social insurance. ILO provides technical assistance primarily in the fields of social security systems, social protection administration and expansion of coverage, social expenditure management, labor relations, vocational training, employment policy, labor administration, labor law and industrial working conditions, management development, cooperatives, labor statistics, and occupational safety and health. From this perspective, ILO should be a partner in any social protection initiative.

33. The World Bank focus uses social risk management as the conceptual framework for its Social Protection Strategy Paper, consistent with its Comprehensive Development Framework and Poverty Reduction Strategy Papers (PRSPs). Social protection is defined as public interventions oriented to human capital to (i) help individuals, households, and communities better manage risk; and (ii) provide support to the incapacitated poor.¹⁰ The concept of social risk management asserts that all individuals, households, and communities are vulnerable to multiple risks from different sources, whether they are natural (such as earthquakes, floods, and illness) or manmade (such as unemployment, environmental degradation, and war). Poor people are typically more exposed to risk and have inferior access to effective risk management instruments than people with greater assets. Dealing with risks involves recognizing their sources and economic characteristics, for example, whether they affect individuals in an unrelated manner or simultaneously. The most appropriate combination of risk management strategies (prevention, mitigation, or coping) and arrangements (informal, market-based, or publicly provided or mandated) in any given situation depends on the type of risk and on the direct and opportunity costs and effectiveness of the available instruments. On the organizational side, the World Bank has established its Social Protection Department under its Human Development Network, with units in most of the World Bank’s human development regional divisions. The World Bank Board of Directors endorsed its comprehensive Social Protection Strategy on 7 September 2000.

34. IADB defines social protection as prevention and compensation systems to reduce the impacts of shocks on the Latin American poor.¹¹ The definition owes much to the needs and economic history of the region, after the macroeconomic and structural crisis of the 1980s and 1990s (debt crisis and structural adjustment shocks) and frequent natural disasters (hurricanes such as Mitch in 1998, earthquakes like the ones in Mexico in 1985 and Colombia in 1994, and floods and droughts resulting from El Niño). The key objectives of the IADB social protection strategy are to (i) guarantee minimum consumption levels and access to basic services for those permanently unable to provide for themselves (i.e., the aged and disabled); (ii) strengthen the asset base of the poor to reduce their vulnerability to shocks; (iii) ensure continued investment in human capital during periods of crisis in order to avoid irreversible long-term consequences for children; and (iv) provide security to the poor to improve their economic choices and allow them to take entrepreneurial risks and earning capacity.

35. To achieve the International Development Goal of halving poverty by 2015, DFID emphasizes requirements of economic growth, equity, and security.12 DFID supports a rights-based approach to poverty reduction. Decent living standards, access to services and security are part of the fabric of rights of poor people. These rights are enshrined in national laws, international agreements and covenants, including Core Labor Standards, and form the basis on which development organizations formulate their policies. Participation in the formulation of such policies by poor people is an equally important part of a rights-based approach. And the issue of security, in a broad sense, is central among poor people’s priorities. DFID has worked extensively on the notion of sustaining livelihoods to promote opportunities for all citizens and reduce poverty. In this context, social protection refers to the public actions taken in response to levels of vulnerability, risk, and deprivation for those who fall temporarily or persistently under levels of livelihood deemed acceptable within a given polity or society.¹³

36. ADB has developed different types of social protection interventions over the years, either as stand-alone loans or as components of other loans where social protection is not the primary objective. Since 1985, where social protection projects were only about 1% of the total ADB lending, the portfolio has been expanding. In 1998–2000, it represented 13% of the total ADB lending volume. This significant increase is due to the support to safety nets interventions after the Asian crisis. The demand for rapid social support projects will hopefully not be necessary in the future—instead, ADB should concentrate on developing more comprehensive and effective social protection systems to assist DMCs to reduce poverty and vulnerability. The trend, however, reflects an important increase in lending in the sector. Social protection is an emerging sector that needs to be properly addressed. An analysis of the areas served shows that ADB has mostly invested in labor markets (39.5% of the social protection portfolio, by volume), followed by micro and area-based schemes to protect communities (27.5%), and child protection interventions (19.5%). Social insurance and social assistance had a lesser share of the portfolio (6.5% and 7% respectively, by volume).

37. As social protection took on a new urgency at ADB, the need for more effective coordination strategies became clear. In October 1998, an interdepartmental working group was formed to explore options for ADB’s future interventions in social protection.¹⁴ A framework for operations on social protection was developed in July 1999, after close consultations among departments, and was distributed and discussed with selected DMC governments, NGOs, and other aid agencies. The following drafts ended in a formal submission to the 57 ADB member countries in April 2001, and a consensus was reached on 13 September 2001, when the ADB Social Protection Strategy was approved.

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