Opening remarks by ADB Vice-President Bambang Susantono at the Asia-Pacific Social Protection Week on 2 August 2016 in Manila, Philippines.
- 2.2 billion in Asia-Pacific work in the informal sector, where social protection coverage is absent.
- The "missing middle" miss out on cash transfers, pension programs, benefits, and insurance.
- Financing gaps need to be closed to ensure the goal of "leaving no one behind" is achieved in Asia-Pacific.
Good morning everyone.
On behalf of the Asian Development Bank and the partner organizers of the AsiaPacific Social Protection Week, I welcome you to ADB headquarters. More than 200 social protection experts and advocates are joining this program—from governments, NGOs, development agencies, academe, and the members of stakeholders.
For those traveling to Manila from abroad, MABUHAY! May you enjoy the great hospitality and warmth of the Filipino people during your visit.
To those of you who joined yesterday’s visit to Philippine Government offices with responsibility for managing social protection programs, I hope you found your tour informative and enlightening. Over the past several years, the Philippines has substantially expanded its public health insurance and conditional cash transfer programs, providing emerging experiences from which other countries can draw lessons and inspiration. ADB is proud to have partnered in providing significant technical assistance and financing to national social assistance and labor market programs in this country.
The region's "missing middle" lacks social protection
Social protection has been high on the agendas of policy makers in developing Asia and the Pacific since the economic and financial crisis almost a decade ago. In Asia and the Pacific, the plight of what we call “the missing middle” has become one of the most pressing social issues demanding government attention. An enormous group of 2.2 billion – accounting for nearly 3/5ths of this vast region’s population – are not among the extreme poor, but work in the informal sector, an area where social protection coverage is largely absent. Those struggling in the “missing middle” generally miss out on state-provided cash transfers targeting the poor, they are not part of any contributory pension program, and can only dream about sick leave and maternity benefits, and accident or unemployment insurance.
The experiences of social protection leaders in Asia and the Pacific have made it clear that governments not only can afford greater investment in social protection, but that failure to construct durable social protection floors will take a large social toll when the next inevitable crisis unfolds.
Asian and Pacific states have contributed to the international consensus that social protection systems must be expanded to cover everyone. This consensus has been affirmed by the landmark ILO recommendation on Social Protection Floors (2012), as well as by the Sustainable Development Goals and Addis Ababa Action Agenda on finance development.
"Developing Asia continues to lead the world with its high rates of economic growth yet, too few people see the benefits of such growth and miss out on opportunities that others enjoy."
Challenges to governments
In addition to the social protection needs of the missing middle, I wish to highlight 5 challenges that confront governments in the region:
First: Low levels of government investment in social protection. Average central government expenditures on social protection in developing Asia is only 4.3% of GDP, and even lower – 2.3% of GDP – in the Pacific. However, within the region there are countries such as Maldives Mongolia Uzbekistan), and Vietnam which have higher social protection expenditure than average of 25 countries in Asia.
Second: A growing elderly population. The population of over 60 year-olds in Asia is growing fast and is expected to reach 845 million by 2030. This represents an additional 337 million older people by 2030, Asia will be home to 60% of the world’s older people. Most elderly in developing countries in the region do not have an adequate pension or health insurance.
Third: Labor mobility. As the region has become more connected through growing trade, transport links, the internet, and direct investment, workers have increasingly crossed borders to work. Yet social protection does not travel with workers. There are few examples of social protection programs that feature "flexicurity" or portability of benefits. Access to most social protection programs are still tied to the current physical location of beneficiaries, as policy and programs have not kept up with the more mobile world in which we are all living today.
Fourth: Fragmented social protection programs. Some Asian countries have a high number of national social protection programs that may lead to duplication of beneficiaries, inefficiencies in service delivery, and high administrative costs. For example, Armenia has 81 programs, Bangladesh (30), Indonesia (38), Pakistan (36), Philippines (40), Thailand (32) and Uzbekistan (35); and
Fifth: Lack of capacity to implement and monitor social protection programs. Many countries still do not have appropriate systems, tools, and trained personnel to effectively monitor, evaluate, and report on social protection expenditures, beneficiaries, and impact. This means that government officials do not receive sufficient information to inform policy decisions and program design.
While challenges abound, so do innovation and exciting developments that present opportunities to improve the provision of social protection. Let me mention just 4 promising developments that in my opinion need to be upscaled:
First, information and communication technology (ICT) has made it possible to reduce the administrative costs of delivering social protection and improving program efficiency. The use of biometrics, smart cards, and e-kiosks are dramatically changing how governments provide social protection, enhancing the transparency, increasing responsiveness, and timeliness of benefits delivery. For example, payment mechanisms have improved in cash transfer programs in Pakistan and Philippines; and so too the delivery of food stamp program in Mongolia through use of smart cards.
Second, new, comprehensive national identification systems have substantially improved the basis for identifying eligible beneficiaries, tracking benefits, and reducing leakages, minimizing errors of exclusion and inclusion. One example is India’s Aadhaar which is now expanding its services to include social protection programs; and Mongolia which is looking into linking its social welfare programs to the national identification system.
Third, increased awareness by governments of the need to prepare for a fast-aging population has opened the door for knowledge sharing on approaches that enable the elderly to continue contributing to society and live with dignity, while receiving needed government support. ADB is now actively promoting dialogue among countries on our "graying region" (including People’s Republic of China, Indonesia, Sri Lanka, Thailand and Vietnam), and financing projects to help governments better serve the needs of an older population.
"Comprehensive social protection systems will ... ensure that all move upward together, that people can count on help should things take a turn for the worse, and that people have a basic means of support."
Fourth, governments are making greater efforts to strengthen the abilities of its jobless, underemployed, and inadequately skilled youth. After rapid and sustained growth through the latter half of the 20th century, the number of young people aged (15-24) years in Asia is projected to decline from 718 million in 2015 to 711 million in 2030 and 619 million in 2060. Still, this region will be home to more youth than any other global region for decades to come. To fully benefit from this great natural resource, countries must ramp up training and technical skills to prepare workers for the labor market and to improve overall economic competitiveness.
I do hope that both big challenges and these four major developments will be discussed in sessions over the coming days.
Inclusive economic growth requires social protection
Developing Asia continues to lead the world with its high rates of economic growth. Yet, too few people see the benefits of such growth and they miss out on opportunities that others enjoy. Comprehensive social protection systems will contribute to the region’s inclusive growth. They will ensure also that all move upward together, that people can count on help should things take a turn for the worse, and that people have a basic means of support if they cannot work or are retired. Providing social protection is one of most direct ways of making sure that people are included in progress, poverty and inequality are reduced, and social cohesion is nurtured.
I mentioned earlier that developing countries in the region invest relatively little in social protection, resulting in inadequate coverage and benefits to tackle poverty and vulnerability. Financing gaps in social protection need to be closed in order to ensure that the key global development goal of "leaving no one behind" is actually achieved in Asia and the Pacific.
I encourage all of you to participate actively in the discussions ahead, sharing your ideas, experiences, and insights. Please ask questions and express your views to help create a true learning event that provides valuable inputs into the work of all participants. The regional drive toward more sustainable, efficient, and equitable social protection systems in Asia the Pacific continues from here.
I wish you all a pleasant and stimulating morning, and a fruitful week ahead.