What’s next for Social Protection: A Global Fund for Social Protection

Social protection gaps left individuals and societies vulnerable to health, social and economic impacts of COVID-19. A Global Fund for Social Protection could accelerate progress in building social protection floors worldwide and strengthen crisis resilience decisively.

Social Protection has been an essential tool to face the pandemic and to mitigate its health, social and economic impact on individuals and societies. So far, 209 countries adopted 1,568 social protection measures in response to COVID-19 – 54 % of these measures were new emergency programs and 46% adjustments of pre-existing contributory and non-contributory social protection programs (ILO, 16/11/2020). Mozambique, for example, adapted its national cash transfer program to provide higher levels of benefits to its 600,000 beneficiaries, and extended transfers to one million additional individuals as a temporary emergency assistance.

Despite the impressive number and scale of responses, many programs have failed to protect all people in need, especially those formerly not integrated into the social protection system, as for instance workers in the informal sector (ILO, 2020a; CGAP, 2020). Overall, performance of the programmes varies strongly and points to the secret of success: “We have seen, once again, that countries that already had well-designed social protection systems in place were able to rapidly guarantee access to much needed health care and ensure income security through sickness benefits, unemployment benefits and social assistance” (Valérie Schmitt, 2020).

Large gaps in social protection floors

Among those left without income opportunities and without adequate social protection, hunger and extreme poverty are rising dramatically. It is expected that the COVID-19 pandemic will cause between 83 and 132 million more people to suffer from hunger this year (FAO et al., 2020).

Social protection gaps are not exclusively, but still strongly related to financial gaps. The International Labour Organization estimates that around US$77.9 billion would be required in 2020 alone, if social protection floors in all low-income countries were to be completed at once (ILO, 9/2020b).

While financing social protection is primarily the responsibility of national governments, it is evident that in some low-income countries international support is required until domestic fiscal capacity increases, and international tax justice improves. While the financing gap for low-income countries represents 15.9% of their GDP, related to the Global GDP it is only 0.25%.

Reaching the furthest behind first

Astonishingly, international funding for social protection is still extremely low, despite the vast scientific evidence on the effectiveness of investing in social protection to tackle extreme poverty. International aid only covers about 3% of the social protection sector financing gap in low-income countries (Manuel et al., 2020).

The COVID-19 crisis has revealed the willingness of many countries to make unprecedented financial efforts to provide protection. A Global Fund for Social Protection could now strengthen these national initiatives, as well as up-scale well-functioning forms of international cooperation. It could contribute to transform current emergency programmes into coherent elements of sustainable social protection systems able to respond also to future crises. There is the need to act as a global community and push decisively towards the goal of universal social protection, starting from those left furthest behind.

Lessons from other Global Funds

The proposal to pool funds globally for high priority issues is far from new. Many times, it has been the instrument of choice to engage for common goals and coordinated progress in various specific sectors, as for example in Health (Global Fund for AIDS, Tuberculosis and Malaria), Education (Education cannot wait), and Climate (Green Climate Fund) as well as related to the cross-sectoral Agenda 2030 (Joint SDG Fund).

There are important lessons to learn from earlier experiences of Global Funds. Among them is the observation that Global Funds were able to mobilise political commitment on national and on international level. Global Funds came with a stronger focus on data, results and joint learning and have led to more effective collective donor effort (Manuel and Manuel, 2018). In the context of social protection, donor coordination is particularly important, as social protection systems need to be integrated and coherent: “Fragmented aid and associated advice embodies the risk that systems become or remain un-coordinated and fragmented” (Michael Cichon, 2020).

Earlier experiences of Global Funds also have caused strong criticism, mainly around their narrow, vertical focus of intervention, donor dominance and additional bureaucracy. Therefore, specific design features – mandate, governance structure and procedures – are extremely important.

Mandate of a Global Fund for Social Protection

In the proposal of the Global Coalition for Social Protection Floors the mandate of a Global Fund for Social Protection differs explicitly from a narrow focus of intervention. It is described as “supporting national governments in their efforts to build up and strengthen their universal and rights-based social protection systems, based on national dialogues with social partners and civil society” (GCSPF 2020). In essence the aim is to provide for:

  1. Technical support to introduce or complete social protection floors and to develop countries’ preparedness to sustain and expand social protection in times of crises.  
  1. Co-financing of social protection floor benefits, in cases where low-income countries would require a prohibitive high share of their current total tax revenue to do so.   
  1. Support during crises to strengthen responsiveness of social protection systems.  

A Global Fund for Social Protection is important, not only to mobilise additional international finance, but also to leverage domestic resources and to support policy and technical coherence for efficient and accountable building of national social protection systems: “Essential elements for sustainable system building are an inclusive national social dialogue, legislation to ensure social protection becomes a right, and reliable allocations in the national budget. The Mandate of a Global Fund for Social Protection is to play a catalytic role to strengthen these elements” (Gabriel Fernandez, 2020).

Governance features

Consequently, the governance structure of a Global Fund for Social Protection needs to put country ownership first, as agreed upon in the Paris Declaration on Aid Effectiveness. “It is solely up to the recipient countries to decide on the concrete shape of their national social protection floors – even if they are temporarily co-financed by international donors. Therefore, the decision-making structures of the Fund must be designed in such a way that no decisions can be taken against the will of the recipient countries” (Markus Kaltenborn, 2020).

The second priority feature is to institutionalize participation of social partners and civil society. “Social Partners and civil society have an important role as part of the national social dialogue, in the design, implementation and monitoring of social protection, to sustain political will for long term allocation of public spending and to hold governments accountable. They consequently also have a role to play within the international governance structure of a Global Fund for Social Protection” (Sulistri Afrileston, 2020). 

Towards social protection floors worldwide

The international community of nations has long committed to ensure the human right of all people to social protection. In this Decade of Action to deliver on the 2030 Agenda, commitments must be translated into tangible results. “This is not only required by global solidarity, but there is also a legal obligation in this regard, derived from fundamental human rights (…).” (Kaltenborn, 2020).

To build solid protection floors, which we can rely on even in times of crisis, requires determined and courageous steps towards more national and international solidarity. “Present levels of inequality of standards of living and injustice are not sustainable in a globalizing world. In a world with global markets, global health crisis, global migration, global financial and economic crises and a looming climate disaster, the solidarity between people cannot stop at national borders. The Fund is only a tiny contribution, but perhaps a visible indication of that understanding” (Michael Cichon, 2020).

This blog post is published as part of the activities to promote and disseminate the results and key discussions of the global e-Conference ‘Turning the COVID-19 crisis into an opportunity: What’s next for social protection?’, held in October 2020. The blog summarises the key messages from the e-Conference’s Side Event on A Global Fund for Social Protection. The session was moderated by Alison Tate, Director of Economic and Social Policy of International Trade Union Confederation (ITUC), and joined by speakers Valérie Schmitt, Deputy Director of International Labour Organization (ILO); Gabriel Fernandez, Social Protection Specialist of Africa Platform for Social Protection (APSP); Markus Kaltenborn, Professor of Law of Ruhr University Bochum; Sulistri Afrileston, Deputy President of the Confederation of Indonesia Prosperous Trade Union KSBSI, member of ITUC;  Michael Cichon, Professor emeritus of Social Protection of Maastricht Graduate School of Governance at the United Nations University in Maastricht (UNU MERIT); Marcus Manuel, Senior Research Associate of Overseas Development Institute (ODI). You can watch the full session here.

References:

CGAP (2020). Relief for Informal Workers: Falling through the Cracks in COVID-19, Covid-19 Briefing, Accessible: Relief for Informal Workers: Falling through the Cracks in COVID-19 (cgap.org)

FAO et al. (2020). The Report on the State of Food Security and Nutrition in the World, Accessible:   SOFI2020_EN_web.pdf (reliefweb.int)

GCSPF (2020). Global Fund for Social protection. Concept note, Accessible: Global Financing Mechanism for Social Protection.doc

ILO (9/2020a). Extending social protection to informal workers in the COVID-19 crisis: country responses and policy considerations, Social Protection Spotlight, Accessible: https://www.social-protection.org/gimi/RessourcePDF.action?id=56833 

ILO (9/2020b). Financing gaps in social protection: Global estimates and strategies for developing countries in light of the COVID-19 crisis and beyond, Social Protection Spotlight, Accessible: RessourcePDF.action (social-protection.org)

ILO (16/11/2020). Social Protection Monitor, International Labour Organization, Accessible: ILO | Social Protection Platform | (social-protection.org)

Kaltenborn, M. (2020). “Social Protection Floors as an investment in the future”, International Journal of Public Law and Policy (IJPLAP), vol. 7 (2020), forthcoming

Manuel, M. et al. (2020). Financing the reduction of extreme poverty post-Covid-19, ODI Briefing Note, Accessible: reducing_poverty_post_covid_final.pdf (odi.org)

Manuel, M. and Manuel, C. (2018). Achieving equal access to justice for all by 2030. Lessons from global funds, ODI working paper 537, Accessible: 12307.pdf (odi.org)

By Nicola Wiebe.

Source: socialprotection.org.