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Social Protection Strategy : IV. Operational Implications
B. Operational Implications for ADB
76. Within ADB operations, social protection issues arise in seven contexts:
(i) country poverty analysis and programming strategies, (ii) ADB
project activities, (iii) safeguards, (iv) staffing and staff skills, (v) operational
assignments and responsibilities, (vi) strategic partnerships, and (vii) monitoring
progress.
1. ADB country poverty analysis and country strategy and
program
77. The decision on whether ADB should assist a specific DMC to address
social protection priorities will require an assessment of social protection
issues and priorities in the context of the country poverty analysis, to be
reflected in the country strategy and program. The assessments should be
brief and concise, attending to the objective of prioritizing which interventions,
if any, maybe necessary for a specific DMC. Given the variety of reform
priorities and possible interventions (labor markets, social insurance, social
assistance, area-based schemes, and child protection), the ADB Social Protection
Strategy recommends prioritizing investments based on ADB’s
goals19 of reducing poverty, promoting country focus and ownership,
enhancing strategic alliances and partnerships, and having a long-term
approach. This is summarized below:
- Country Needs. The country needs assessment will include a vulnerability
profile and labor market analysis, and will conclude with a
rational prioritization of the country’s top social protection needs,
based on quantitative evidence. The summary vulnerability and risk
profile will identify the main causes of vulnerability and social risks,
and quantify affected populations by age group, geographical area,
and other relevant criteria. A summary labor market analysis will
critically review the capacity of the labor market to absorb new entrants
and recommend ways to ensure efficient and inclusive development
patterns. Such an analysis is a key element in the poverty assessment’s
strategic link to economic growth.
- Available Resources. The resources available for social protection
programs will be assessed in a social expenditure review as part of
the country governance assessment,20 in coordination with the ILO,
IMF, World Bank, and aid assistance organizations. Social expenditure
reviews evaluate the capacity of current support programs in
assessing the effectivity of current allocations to reduce poverty and
vulnerability, including distribution issues. Many existing social protection
systems and programs are underbudgeted or their benefits
mistargeted to upper-/middle-income groups; the level of resources available for social protection will influence a country’s social
protection choices.
- Existing Institutions. The efficiency and coverage
of existing social protection programs, and the possible roles,
and risks involved, in using public and market-based and civil
society/NGO mechanisms will be evaluated to assess the feasibility
of new social protection programs.
- Political Economy of Reform. Social protection
strategies are complex undertakings in which some groups may benefit
more than others— reforms should be articulated in an integrated
manner and discussed with all relevant stakeholders.
78. ADB operations may appropriately include social protection lending
and nonlending activities to serve country-specific needs. The proposed
social protection policies should complement one another and help countries
to meet their international commitments for poverty reduction and
social development (e.g., International Development Goals, Basic Social
Services 20:20,21 and UN conventions and laws).
2. Strategic guiding principles for ADB
social protection activities
79. ADB interventions in social protection should be selective. If any social
protection intervention (labor markets, social insurance, social assistance,
micro and area-based schemes, or child protection) has been
identified as a priority in a DMC, the project should ensure the following:
- Adequate Coverage. Formal social protection systems should be built
with the ultimate objective of ensuring effective protection for the
majority of the population so poverty and vulnerability are effectively
reduced; this is a top priority in Asia and the Pacific as most citizens
are excluded from any formal social protection system.
- Targeting Vulnerable Population Groups and Gender Issues. Where
allocated public funds are limited and country needs are large, public
programs will likely be unable to provide adequate coverage; resources
should thus be targeted to those most in need. Priority vulnerable
groups will have been identified and prioritized in the country’s vulnerability
profile. Given the status of women in the region, gender development, including positive discrimination policies, deserve
particular attention to ensure inclusive societies.
- Sustainability and Good Governance. Sound financial management,
good governance; and adequate institutional arrangements are
essential to secure effective administration and minimize charges and
impacts on the budget. Evaluating the distribution impacts and costeffectiveness
of interventions will further assist in determining priorities
and economic and social benefits.
- Integrated Approach. Establishing or consulting existing National
Commissions for Social Protection is the best institutional mechanism
to ensure consistency across programs, appropriate prioritization of
in-country social protection needs, and adequate sequencing of
reforms.
80. The principles described in the earlier sections are also applicable to
social protection components in loans where social protection is not the
direct objective of the loan.
81. Examples of ADB’s role in technical assistance and lending programs
for the priority social protection interventions include
- aligning current social protection programs to ensure that available
resources serve priority needs;
- assisting governments to improve labor market operations to reduce
poverty, facilitate human development, address gender inequalities,
remove obstacles to job creation, improve productivity, and create an
environment enabling economic activity;
- continuing to support direct interventions that contribute to the elimination
of violations of the Core Labor Standards;
- expanding the role of microfinance to include new objectives such as
microinsurance and reinsurance;
- promoting the development of social funds;
- designing projects that empower communities and develop disaster
preparedness programs to secure less vulnerable and more self-reliant
communities; and
- increasing child protection programs either as stand-alone projects
or components of basic education and health projects.
82. Social insurance and social assistance are areas where the ADB has
lesser expertise and, if any, interventions should be developed in close collaboration
with strategic development partners. Such assistance might
include
- rethinking pension reform programs and insurance/nonbanking financial
services, to ensure that, in addition to market-based mechanisms
and sustainability aspects, pension reform programs are designed to
balance equity considerations, addressing issues such as expansion
of coverage and provision of adequate benefits to the population; and
- ensuring adequate distribution impacts in the reform of social assistance
programs.
3. Collateral issues and safeguards
83. Social protection issues also emerge as important collateral issues in
lending where social protection is not the direct objective of the loan.
Incorporating social protection dimensions in such cases and where feasible,
will extend the reach of social protection concerns.
84. The existing ADB social impact assessments, mandated by Management
and the Board since 1991 (Operations Manual OM 47: Incorporation
of Social Dimensions into Bank Operations) will continue to ensure that
vulnerable groups are not negatively affected by an ADB intervention. Specific
social protection issues include the following:
- vulnerable groups that maybe negatively affected by an ADB intervention
must be adequately compensated and mitigation measures put
in place to avoid creating further poverty (e.g., in case of public or
private sector restructuring, workers, particularly low-income workers,
should not be unfairly disadvantaged, regardless of race, skills,
gender, age, or religious and political beliefs)22 ; mitigation measures
should always aim to adequately balance social objectives and economic
sustainability; and
- (a) in the design and formulation of its loans, ADB will comply with
the internationally recognized core labor standards;
- (b) take all necessary and appropriate steps to ensure that for ADBfinanced
procurement of goods and services, contractors, subcontractors
and consultants will comply with the country’s labor legislation
(e.g., minimum wages, safe working conditions, and social security
contributions, etc.) as well as with the Core Labor Standards; and
- As part of its regular loan reviews, ADB will monitor that (i) and (ii) are
complied with.
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- SECM62-00: The Long Term Strategic Framework of the Asian Development Bank (2001–
2015). 2001.
- R2299-00: ADB Governance Strategy, 2000. This was endorsed by the ADB Board of Directors
on 1 December 2000, and included in the Medium-Term Agenda and Governance
Action Plan 2000–2004.
- The United Nations’ initiative to allocate 20% of budgetary expenditures to basic social
services.
- Other typical examples are loans dealing with shifts toward market-determined pricing of
energy, water, telecommunications, and housing. Ideally such development interventions
should take place after appropriate regulatory institutions have been created and safety
nets established. Often, however, interim measures may have to be adopted to ease the
effects on households (e.g., tiered pricing of utilities, or exemptions from user charges).
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