By Christina Behrendt (ILO), Mira Bierbaum (ILO), Tomoo Okubo (UNICEF), Shahra Razavi (ILO), David Stewart (UNICEF), Natalia Winder-Rossi (UNICEF) and Veronika Wodsak (ILO)
Today, we are in the midst of a dangerous two-speed recovery — the ‘’great divergence’’ as Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund, refers to it — which risks pushing many developing countries further behind advanced economies, and scarring the lives of millions of unprotected workers and their families, women, and children. The COVID-19 pandemic in conjunction with increased conflict and the current and future impacts of the climate crisis has led to, and will continue to drive, massive disruptions in labour markets and incomes, while progress on poverty reduction, human development and gender equality has been set back. The crisis also revealed large gaps in social protection systems. It is astonishing to think that in the third decade of the twenty-first century, more than half of the global population have no social protection to fall back on when they need it, if they slide into poverty, get sick, have a child, lose their job or income, or when they are old. Only one in four children have access to social protection and thus their prospects of thriving and living a prosperous life can be severely curtailed. The squandered lives and enormous social costs this implies are simply unacceptable. Moreover, the pandemic highlighted that we are facing a care crisis, with unprecedented impacts on children, women and caregivers. In this sense, social protection systems in many countries are not effectively and systematically responding to the needs of women, girls, persons with disabilities or migrants, or addressing critical needs in fragile and displacement contexts. All of this will make it very difficult to ensure that the core of the 2030 Agenda for Sustainable Development, leaving no one behind, is fulfilled.
Yet, a hopeful sign in the pandemic has been the crucial role that social protection has played, evident in the unprecedented policy response worldwide with social protection and jobs measures pursued by virtually all countries and territories, albeit with staggering inequalities in countries’ response capacity. Undoubtedly, without this massive and rapid expansion of social protection, based on strong political will and commitment, the human and socio-economic toll of the crisis would have been much greater. While all these extra measures have been incredibly valuable, they were also mostly temporary, and there is little sign of increased long-term investment in social spending to the extent that will be required to build back better after the COVID-19 crisis. Many countries now find themselves at a crossroads with regard to the future orientation of their national social protection strategies and systems. Going forward, without strategies to build and finance sustainable social protection systems, create decent jobs, and formalize enterprises and employment, these programmes will remain just that: temporary and unsustainable.
What we need then are integrated policy and financing solutions that can create millions of decent jobs, especially in the green, care and digital sectors, while extending social protection to the 4.1 billion people deprived of their human right to social security. Only such integrated solutions have the potential to reverse the rising tide of poverty, reduce growing inequalities, promote gender equality, foster social inclusion and deter the mistrust and intolerance that risks tearing our societies apart. This idea is at the core of the United Nations (UN) Secretary-General’s Global Accelerator on Jobs and Social Protection for Just Transitions that envisages a ‘high road’ to decent work and universal social protection. Pursuing such an integrated policy course, anchored in country- and context-specific solutions, joined-up system-wide technical support and adequate financing, both domestic and international, will ensure a renewed social contract and better preparedness for future crises. The creation of a window on jobs and social protection for a just transition under the UN Joint SDG Fund is also being currently discussed to operationalize the Global Accelerator.
Achieving universal social protection and the role of the Global Accelerator were at the heart of the discussions and committed actions at the Global Forum for a Human-Centred Recovery, convened by the International Labour Organization during 22-24 February 2022. It was very encouraging to see renewed commitment in favour of building universal social protection systems. We heard this commitment from many governments, employers and workers organizations and other partners that attended the forum, as well as the Food and Agriculture Organization of the United Nations (FAO), UNICEF and the World Bank. The vision of universal social protection, including expanding universal child benefits as a critical entry point for expansion, is resonating widely today. Everybody has seen, in very concrete ways, how social protection can serve as a lifeline, providing income security and access to health care and other critical social services, such as nutrition and education, for millions of people, while also contributing to local economic development and ensuring the continuity of businesses. For many governments, international organizations and other stakeholders, it became clear that narrowly targeted safety nets are not sufficient when much broader groups of people are vulnerable and need support. Speakers also recognized risks beyond the pandemic, such as conflict and climate change, and emphasized the importance of scaling up our collective efforts to ensure that social protection systems are risk informed and able to effectively address multiple challenges, including in fragile and humanitarian contexts.
Making universal social protection a reality requires urgent and significant investment globally – concretely, US$77.9 billion per year are required to ensure a social protection floor in low-income countries for instance. While the financing gap may seem challenging, the crisis has shown what we can do if stirred. Approximately US$19 trillion was mobilised in the global fiscal stimulus response, driven by strong political will. In the current climate where countries are facing increasing fiscal pressures, equally strong political commitment will be needed. Filling the financing gap will require countries to safeguard and reinforce existing sources of financing and identify new and innovative ones. International experience shows that countries can draw on different strategies to create fiscal space, including increasing tax revenues (including on incomes and wealth); expanding social security coverage and contributory revenues; eliminating illicit financial flows; reallocating public expenditures and enhancing the quality of spending; using fiscal and central bank foreign exchange reserves; managing debt by borrowing and restructuring existing debt; adopting a more accommodating macroeconomic framework; and increasing Official Development Assistance. The financing pillar of the Global Accelerator aims to build on this experience to effectively redress the financing gap for social protection, starting with a group of high-ambition pathfinder countries that are ready to build universal social protection systems. There are also important debates on innovative sources of financing, including taxes on international financial transactions and carbon emissions or exploring the feasibility of a Global Fund for Universal Social Protection.
In light of these emerging new initiatives that are rapidly evolving to address the urgent need to fill the global financing gap in social protection, the USP2030 Working Group on Financing Social Protection has been established. We are excited to have a wide range of members interested already, including governments, international financial institutions, civil society and development agencies, to come together under this new platform. This will be a key forum to exchange and reflect, build consensus and provide inputs to these international initiatives on financing social protection, with a view to bringing country and constituency perspectives to bear in shaping these agendas and a focus on a strong voice for countries, responsibility and participation. We look forward, as a group, to contribute to the global discussions and advance the sustainable and equitable financing of universal social protection.
This is the fourth blog post in the USP2030 blog series. It was first published on 11 March 2022 on socialprotection.org