Social Europe

politics, economy and employment & labour

  • Projects
    • Corporate Taxation in a Globalised Era
    • US Election 2020
    • The Transformation of Work
    • The Coronavirus Crisis and the Welfare State
    • Just Transition
    • Artificial intelligence, work and society
    • What is inequality?
    • Europe 2025
    • The Crisis Of Globalisation
  • Audiovisual
    • Audio Podcast
    • Video Podcasts
    • Social Europe Talk Videos
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Shop
  • Membership
  • Ads
  • Newsletter

The Global Fund for Social Protection: an idea whose time has come

by Olivier De Schutter on 17th November 2020 @DeSchutterO

TwitterFacebookLinkedIn

The pandemic has highlighted the fragility of social protection, especially in the developing world. A new global fund is needed—and it’s affordable.

social protection floors
Olivier De Schutter

The Covid-19 pandemic and the workplace closures adopted by governments to limit the spread of the virus have imposed an unprecedented ‘stress test’ on social-protection systems across the world. Hours worked worldwide decreased by 10.7 per cent worldwide in the second quarter, potentially translating into the loss of 305 million jobs. 

The most severely affected have been workers in the informal sector and in precarious, ‘non-standard’ forms of employment: respectively 1.6 billion and 0.4 billion workers globally and together three out of five. Because women are over-represented in the most affected categories—and because they shoulder most of the burden when families have to make up for the inability of public services, including healthcare, to support those in need—the crisis also represents a massive setback in progress towards gender equality.

Major limitations

Responding to this unprecedented economic and social crisis, governments have set up new cash-transfer schemes or extended existing ones—for instance, to cover informal workers or to loosen the conditionalities attached. They have increased support for workers who have lost their jobs or families facing destitution. And they have expanded cash-for-work programmes. By September, some 1,407 measures had been adopted by some 208 countries and territories, providing critical relief to individuals and families in need. While hugely important, these measures suffer, however, from two major limitations.

Get our latest articles straight to your inbox!

"Social Europe publishes thought-provoking articles on the big political and economic issues of our time analysed from a European viewpoint. Indispensable reading!"

Polly Toynbee

Columnist for The Guardian

Thank you very much for your interest! Now please check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

Powered by ConvertKit

First, many of the responses are short-term—temporary fixes, put in place for the lockdowns or, at best, until the economy starts recovering. Yet, when the member states of the International Labour Organization, together with the representatives of workers and employers, unanimously adopted Recommendation 202 on Social Protection Floors in June 2012, they pledged to ‘establish and maintain … social protection floors as a fundamental element of their national social security systems’. In line with the International Covenant on Economic, Social and Cultural Rights as well as with other ILO instruments, this entailed a commitment to put in place standing, rights-based, social protection floors, defining beneficiaries as rights-holders with entitlements they may claim. 

Short-term, charity-based measures, including cash transfers, can be vital in times of crisis. But they are not a substitute for permanent social protection floors. These ensure access to healthcare, guarantee basic income security for children, protect people from the risks of unemployment, sickness, maternity or disability and ensure older persons receive a pension guaranteeing an adequate standard of living.

Secondly, while governments worldwide have dedicated at least $12 trillion to speeding up the global recovery—including by investing in social protection—by far the most important contributions, in absolute terms or as a proportion of their gross domestic product, have come from rich countries. While the European Union has adopted a €750 billion recovery plan (equivalent to 6 per cent of its GDP) and Japan’s amounts to $1.1 trillion (22 per cent of GDP), the fiscal response of low-income, developing countries has been limited to 1.2 per cent of GDP on average.

Significant cut

Developing countries, and particularly low-income countries, face high external debts, aggravated today by capital flight depreciating their currencies. Many also face a significant cut in remittances, expected to be 20 per cent lower in 2020. Comprising in total $350 billion in 2018, such transfers are the most important source of income from abroad for these countries—greater than foreign direct investment, portfolio investment or official development assistance.   

Developing countries also have a limited capacity to mobilise domestic resources and are currently affected by the low prices of commodities on which their export revenues often depend. Hence they lack the fiscal room for manoeuvre to put in place social protection floors, effectively preventing their populations from falling into poverty.

Moreover, the 47 poorest and most vulnerable countries, most of which are in Africa, face an additional constraint: they are small and have poorly diversified economies. This exposes them to high risk from ‘covariate exogenous shocks’—whether economic, climatic or health-related, such shocks affect a large number of households or even entire communities and regions at once, resulting in massive additional burdens on whatever social protection systems exist.


We need your help! Please support our cause.


As you may know, Social Europe is an independent publisher. We aren't backed by a large publishing house, big advertising partners or a multi-million euro enterprise. For the longevity of Social Europe we depend on our loyal readers - we depend on you. Thank you very much for your support!

Become a Social Europe Member

Greater resilience

We need to support these countries’ efforts to put in place robust social protection floors, to ensure greater resilience in anticipation of future shocks. It is high time that we moved beyond emergency cash transfers when a crisis unfolds—which is like starting to recruit firefighters when a fire breaks out. Instead, we need to make standing, rights-based, social protection floors universal—like well-trained and well-equipped fire brigades, ready to intervene at all times.

International solidarity is essential. Already in 2011, the Report of the Social Protection Floor Advisory Group recommended that ‘donors provide predictable multi-year financial support for the strengthening of nationally defined and determined social protection floors in low-income countries within their own budgetary frameworks and respecting their ownership’. The 2012 Social Protection Floors Recommendation itself refers to international co-operation to complement efforts at domestic level. International human rights law also recognises a special responsibility for states in providing for international assistance and co-operation in the fulfillment of social rights in other states with limited resources. In 2012, in this spirit and building on these pledges, two independent United Nations human rights experts proposed a Global Fund for Social Protection, to support efforts of low-income countries seeking to guarantee social protection floors to their populations.

Social protection floors are affordable. ILO experts describe their cost as ‘negligible’ when set against the total incomes of donor countries. According to the most recent estimates, taking into account the pandemic, developing countries would need to invest an additional $1.2 trillion—equivalent to 3.8 per cent of their GDP—to provide the full range of entitlements associated with social protection floors. The financing gap for low-income countries is $78 billion or 15.9 per cent of their GDP. By way of comparison, in 2019, total official development assistance from members of the Organisation for Economic Co-operation and Development amounted to $152 billion, and $78 billion represents about 0.15 per cent of the wealth created in rich countries in 2019.

Financial incentive

This new international financing facility would not be a tool to ensure rich countries pay for social protection in poor countries. Donors would contribute matching funds, providing a financial incentive for poor countries to invest more in social protection—ensuring that domestic resource mobilisation gradually expands so that, in time, international support becomes unnecessary. Moreover, the new mechanism could provide an essential risk-insurance mechanism for low-income countries with poorly diversified economies—countries fearing liquidity problems in times of crisis would be strongly incentivised to invest in standing social protection schemes, to protect their populations over the life cycle.

The pandemic has led to numerous calls to ‘build back better’. Now comes the reality test. Strengthening the resilience of social protection systems across the world should become a political priority and international solidarity should be put at the service of this objective. The crisis is unprecedented and its human impacts huge—if we can at least learn its lessons, it shall not be entirely wasted.

See our series on the Coronavirus and the Welfare State

TwitterFacebookLinkedIn
Home ・ Society ・ The Global Fund for Social Protection: an idea whose time has come

Filed Under: Society Tagged With: coronavirus and welfare state

About Olivier De Schutter

Olivier De Schutter is the United Nations special rapporteur on extreme poverty and human rights.

Partner Ads

Most Popular Posts

sovereignty Brexit and the misunderstanding of sovereignty Peter Verovšek
globalisation of labour,deglobalisation The first global event in the history of humankind Branko Milanovic
centre-left, Democratic Party The Biden victory and the future of the centre-left EJ Dionne Jr
Covid 19 vaccine Designing vaccines for people, not profits Mariana Mazzucato, Henry Lishi Li and Els Torreele
eurozone recovery, recovery package, Financial Stability Review, BEAST Light in the tunnel or oncoming train? Adam Tooze

Other Social Europe Publications

US election 2020
Corporate taxation in a globalised era
The transformation of work
The coronavirus crisis and the welfare state
Whither Social Rights in (Post-)Brexit Europe?

Foundation for European Progressive Studies Advertisement

Read FEPS Covid Response Papers

In this moment, more than ever, policy-making requires support and ideas to design further responses that can meet the scale of the problem. FEPS contributes to this reflection with policy ideas, analysis of the different proposals and open reflections with the new FEPS Covid Response Papers series and the FEPS Covid Response Webinars. The latest FEPS Covid Response Paper by the Nobel laureate Joseph Stiglitz, 'Recovering from the pandemic: an appraisal of lessons learned', provides an overview of the failures and successes in dealing with Covid-19 and its economic aftermath. Among the authors: Lodewijk Asscher, László Andor, Estrella Durá, Daniela Gabor, Amandine Crespy, Alberto Botta, Francesco Corti, and many more.


CLICK HERE

Social Europe Publishing book

The Brexit endgame is upon us: deal or no deal, the transition period will end on January 1st. With a pandemic raging, for those countries most affected by Brexit the end of the transition could not come at a worse time. Yet, might the UK's withdrawal be a blessing in disguise? With its biggest veto player gone, might the European Pillar of Social Rights take centre stage? This book brings together leading experts in European politics and policy to examine social citizenship rights across the European continent in the wake of Brexit. Will member states see an enhanced social Europe or a race to the bottom?

'This book correctly emphasises the need to place the future of social rights in Europe front and centre in the post-Brexit debate, to move on from the economistic bias that has obscured our vision of a progressive social Europe.' Michael D Higgins, president of Ireland


MORE INFO

Hans Böckler Stiftung Advertisement

Renewing labour relations in the German meat industry: an end to 'organised irresponsibility'?

Over the course of 2020, repeated outbreaks of Covid-19 in a number of large German meat-processing plants led to renewed public concern about the longstanding labour abuses in this industry. New legislation providing for enhanced inspection on health and safety, together with a ban on contract work and limitations on the use of temporary agency employees, holds out the prospect of a profound change in employment practices and labour relations in the meat industry. Changes in the law are not sufficient, on their own, to ensure decent working conditions, however. There is also a need to re-establish the previously high level of collective-bargaining coverage in the industry, underpinned by an industry-wide collective agreement extended by law to cover the entire sector.


FREE DOWNLOAD

ETUI advertisement

Social policy in the European Union: state of play 2020

All chapters of Social policy in the EU: state of play 2020 consider the consequences of the unfolding public-health crisis. Contributors were asked not only to analyse key developments in the EU social agenda during 2019 but also to describe the initial Covid 19-driven EU and domestic policies between January and July 2020. The European Social Observatory (OSE) has again worked closely with the European Trade Union Institute (ETUI) and renowned scholars to draw up this edition. We aim to contribute to the debate among policy-makers, social stakeholders and the research community, while providing accessible information and analysis for practitioners and students of European integration. This year’s Bilan social complements the 20th-anniversary issue of the ETUI’s Benchmarking Working Europe, a state-of-the-art analysis of the impact of the pandemic on the world of work.


FREE DOWNLOAD

Eurofound advertisement

Industrial relations: developments 2015-2019

Eurofound has monitored and analysed developments in industrial relations systems at EU level and in EU member states for over 40 years. This new flagship report provides an overview of developments in industrial relations and social dialogue in the years immediately prior to the Covid-19 outbreak. Findings are placed in the context of the key developments in EU policy affecting employment, working conditions and social policy, and linked to the work done by social partners—as well as public authorities—at European and national levels.


CLICK FOR MORE INFO

About Social Europe

Our Mission

Article Submission

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Find Social Europe Content

Search Social Europe

Project Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

.EU Web Awards