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Income poverty has fallen in Asia and the Pacific as millions of people have benefited from the extraordinary economic gains of the past two decades but progress has been highly uneven, leaving one in three Asians poor and vulnerable to economic, social and environmental risks.
During 1996–2008, ADB provided $2.3 billion in loans to help developing member countries (DMCs) increase their social protection programs so that those on the lower rungs of the economic ladder could also benefit from the region’s growth.
Reducing poverty and vulnerability
Developing and expanding social protection for the poor benefits all of society by fostering inclusive economic growth, reducing inequality and improving security and political stability. Well-designed and cost-effective social protection is also critical for achieving the MDGs and contributes to greater human capital thus boosting competitiveness in a globalized world. Without such social protection vulnerable families can suffer lost educational opportunities, reduced health care, and lack of employment – damage that can spill over to future generations.
All countries in Asia and the Pacific have some sort of social protection schemes but most support only small segments of the population and exclude the majority. Through loans, technical assistance, and dialogue ADB helps the governments of DMCs to design, deliver, and evaluate better social protection programs and policies. Examples of recent initiatives include emergency food assistance to Cambodia's most vulnerable, support for public sector pension reform in Pakistan, and conditional cash transfers in the Philippines. ADB has projects that span a wide variety of themes within social protection, including contributory pensions, conditional cash transfers, and social health insurance.
ADB provides crucial support to DMCs for conducting policy and institutional reform to expand and enhance social protection programs. ADB supported India, Indonesia, Mongolia, Viet Nam and Pakistan in strengthening their formal contributory social insurance systems.
Social protection is central to ADB's inclusive growth agenda. ADB defines social protection as a “set of policies and programs designed to reduce poverty and vulnerability by promoting efficient labor markets, diminishing people’s exposure to risks, and enhancing their capacity to protect themselves against hazards and interruption/loss of income.”
Three major elements comprise ADB’s social protection strategy:
Labor market policies and programs designed to promote employment, the efficient operation of labor markets, and worker protection.
Social insurance programs to cushion the risks associated with unemployment, catastrophic out-of-pocket health costs, disability, work injury, and the growing ranks of the elderly.
Social assistance and welfare service programs for the most vulnerable with no means of support, including single mothers, the homeless, or physically or mentally challenged people.
The policies and programs of ADB’s Social Protection Strategy aim to help people in the region break the cycle of poverty, enhance growth through investment in human capital, increase productivity, and reduce their vulnerability to risk.
Strategy 2020, ADB’s long-term strategic framework, recognizes inclusive growth is essential to provide all people with a chance to benefit from economic growth. It also states that Asia and the Pacific must promote greater access to opportunities by expanding human capacities, especially for the disadvantaged, through investments in education, health, and basic social protection.
Social protection from crises
Social protection systems not only protect people during times of economic crisis, but represent an investment in future growth. The global economic and financial crisis of 2008 exposed the magnitude of human and development costs associated with inadequate social protection policies and programs.
In the midst of the economic and financial crisis, ADB provided assistance to many DMCs. Bangladesh received $645 million to help expand social safety net programs to cover millions who were hurt by the crisis such as households dependent on remittances, laid off factory workers, women forced into low-paying and insecure jobs, and young people joining the labor market at a time of shrinking job opportunities.
In 2009, ADB approved loans for social protection measures in Mongolia, the Philippines, the Peoples' Republic of China and Viet Nam worth more than $1.1 billion. Between 1996 and 2008, ADB provided 20 full social protection loans and 90 loans with social protection components, plus technical assistance projects totaling $66.43 million.
ADB’s social protection initiatives are strengthened by development cooperation forged with international partners and workers’ organizations such as the International Labour Organization and global union federations, including Public Services International (PSI) Asia Pacific Regional Organization, and the Organization for Economic Co-operation and Development.
ADB intends to be involved in the design and implementation of innovative social assistance programs, such as conditional cash transfers, analytical work on aging and social protection, as well as work on measuring the effectiveness of social protection in the region.