Regional: Enhancing ADB’s Support for Social Protection to Achieve the Sustainable Development Goals

Education / Education sector development - social protection initiatives - Technical and vocational education and training

Finance / Insurance and contractual savings

Health / Health insurance and subsidized health programs

Public sector management / Social protection initiatives

After the Asian financial crisis in 1997, social protection has become a key development priority for reducing poverty, vulnerability, and income inequality, as well as for promoting inclusive growth. The financial crisis of the 1990s led to an increased interest in social protection a trend that continued as a result of the global financial crisis in 2008, rising energy and food prices, and heightened risk of climate-related disasters. These global challenges coincided with increased levels of inequality both within and across countries, and greater constraints on governments to finance social expenditure while grappling with the challenges of youth unemployment and aging populations.

ADB's Midterm Review of Strategy 2020 and the Social Protection Operational Plan, 2014 2016 reconfirmed that social protection is an important instrument to reduce poverty and inequality and to improve the productive capacity of individuals, thereby contributing to inclusive, equitable, resilient, and sustainable economic growth in Asia and the Pacific. Social protection is the third pillar of ADB's inclusive economic growth agenda, and the lack of access to effective and sustainable social protection systems is a contributing factor to vulnerability in the region. ADB's forthcoming Strategy 2030 underlines the importance of social protection and identifies it as a key component in the operational priority to address remaining poverty and reduce inequalities. This is in line with the globally agreed SDGs, which have specific targets related to the expansion of social protection systems.

DMCs have taken steps to improve social protection programs, including expanding coverage and benefit size, but these remain inadequate. The initial ADB study on financing social protection to achieve SDG targets 1.3 and 8.5 revealed large financing gaps and the need for DMCs to increase their budget allocations on average by 5% of gross domestic product (GDP) for lower middle-income countries and by about 2% of GDP for upper middle-income countries to enable adequate social protection coverage and benefits. ADB's SPI has shown that DMCs spend on average less than 3.6% of their GDP for social protection, compared to target expenditure levels of 5.0%, to achieve the goals of basic social protection programs, including contributory social insurance (pension, health insurance, and other types of insurance) and noncontributory social assistance (cash and in-kind transfers), and active labor market programs such as targeted technical vocational programs and cash-for-work programs.

Financing constraints in DMCs are compounded by the fragmentation of social protection systems across line agencies within the DMCs. Their capacity to design, implement, monitor, and evaluate social protection programs tends to be limited. DMC governments increasingly recognize the need to improve the design and delivery of social protection to better target disadvantaged and marginalized groups. Innovations in social insurance, social assistance, and labor market programs are emerging, but adequate support for human resources and accountability procedures is lacking.

Monitoring and evaluation systems are also essential to provide information about how well programs are working so that improvements can be made over time. To provide governments with policy-relevant information on social protection systems, ADB and its partners developed the SPI in 2005 and will continue assessing social protection systems in Asia and Pacific through the SPI which provides information on 38 countries in the region up to 2020 as part of the implementation of the Social Protection Operational Plan.

The SDTG has implemented TA programs to strengthen DMCs' capacity to monitor country expenditure and beneficiaries of social protection, assess the use of information and communication technology for delivering social assistance, and evaluate the financial gaps for expanding social protection to achieve the SDGs. However, financing, capacity building, advocacy, and partnerships to support the development of social protection systems in DMCs are still insufficient. These factors result in limited investments in social protection programs in the DMCs, leading to low social protection coverage and benefits across Asia and the Pacific, and the persistence of poor and vulnerable populations, especially among women, in Asia and the Pacific.

Given the remaining challenges as well as opportunities with increasing DMC uptake of social protection, and lessons from previous TA projects implemented, the proposed TA will aim to develop ADB investments in social protection; cultivate leadership and knowledge in social protection; and continue to support the monitoring of social protection programming and spending in Asia and the Pacific with the SPI.

Capacity to design, implement, expand, and monitor social protection programs improved

Knowledge sharing and partnerships on social protection strengthened

ADB's SPI updated

1. Four funding proposals for Output 1: Capacity to design, implement, expand, and monitor social protection programs improved - have been approved.

- The request from ADB Central and West Asia Regional Department (CWRD) for Uzbekistan is intended to support the analysis around social protection and potential assistance in the areas of social insurance, social assistance, and labor market programs, for use in the preparation of the new country partnership strategy (2019-2023).

- The request from CWRD for Azerbaijan is aimed at supporting the work of the Ministry of Labor and Social Protection in the development of private pension schemes and the merger of the targeted social assistance and social allowances program, and is in line with the proposed country partnership strategy for 2019-2023.

- The request from CWRD for Pakistan is intended to support the assessment and further development of the design and implementation of the Benazir Income Support Programme.

- The request from East Asia Regional Department for PRC is to support the analysis and scoping for elderly care services and human resource requirements that will inform the design of a lending project currently being processed.