|e-GCSPF # 53 - May 2021|
|What is social protection?|
|What is a social protection floor?|
|What would a Global Social Protection Fund do?|
|Why is a fund needed?|
|Why support this proposal at this moment?|
|Many countries have in fact expanded social protection programmes during the pandemic – is there really a need for a Global Fund?|
|How can we know that the money will be used for the intended purpose?|
|Social protection is a responsibility of national governments. Is a Global Fund needed?
|2.||SPECIFIC QUESTIONS FOR DECISION MAKERS
|Why is it important that political leaders support this proposal?|
|Why create a new bureaucracy? We already have too many International organisations, whose mandates are often overlapping|
|What lessons can be drawn from other Global Funds?|
|Please don’t create a new vertical fund!|
|How to ensure that the Global Fund for Social Protection complement, but not compete with, existing initiatives in this area?|
|For donor countries: what is the best argument for ensuring social protection support to a developing country through a Global Fund rather than through bilateral programmes?
|3.||SPECIFIC QUESTIONS TO DEVELOPMENT PRACTITIONERS AND ORGANISATIONS
|Why so much focus on social protection – there are other important issues to focus on during and after the pandemic, such as health, food security, and inequality|
|Would social protection floors always be implemented by governments, or could there be parallel implementation systems?|
|How should the Global Fund be governed?|
|What is the role of the Global Fund for Social Protection in the face of humanitarian crises?|
Social protection consists of public policies and programmes that provide financial and in-kind support to individuals or households – including through the provision of income support and essential services. Social protection aims to help people cope with shocks, reduce and prevent poverty and vulnerability throughout people’s life-course and ensure income security to people who are facing contingencies such as unemployment, sickness, unpaid care work, maternity, widowhood and old age.
Social protection is a right enshrined in several international legal instruments, such as the Universal Declaration of Human Rights, the International Covenant for Economic, Social and Cultural Rights and the International Covenant on the Rights of the Child. The documents adopted by regional organisations also attach great importance to this human right.1 International labour standards set out a number of basic principles for the design of social protection systems.
Social Protection Floors are a set of minimum guarantees, endorsed in ILO recommendation 202 (2012) which provide for
(a) access to a nationally defined set of goods and services, constituting essential health care, including maternity care, that meets the criteria of availability, accessibility, acceptability and quality;
(b) basic income security for children, at least at a nationally defined minimum level, providing access to nutrition, education, care and any other necessary goods and services;
(c) basic income security, at least at a nationally defined minimum level, for persons in active age who are unable to earn sufficient income, in particular in cases of sickness, unemployment, maternity and disability; and
(d) basic income security, at least at a nationally defined minimum level, for older persons.
Goal 1 target 3 of the Sustainable Development Goals contains a specific commitment to universal social protection floors. SDG 1.3 provides for all countries to “implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.” Regional instruments also reflect the concept of social protection floors.2
A Global Social Protection Fund would ensure the necessary technical and financial support to enable all countries to put in place national social protection floors for all residents (including the undocumented, stateless, migrants and refugees), and develop the capacity of their national social protection systems to be resilient to and to respond to crises.
The key principle of the Global Social Protection Fund is that of solidarity between all countries both in the provision of funding and that of advisory and technical support. The Fund will enable and catalyze from global inputs the requirements for social protection system development. It will leverage coordination of national actors and bring about consistency and synergies of international support from all regions.
Any financial support would be accompanied by technical and advisory support for social protection system development. This can include putting in place accountable, transparent and participative public finance management modalities which are a key dimension of a sustainably financed social protection policy.
It will also include engaging with and providing financial, advisory and technical support to civil society to bridge knowledge gaps and to help them perform their multiple roles in the planning, implementation and monitoring of social protection systems and thus support inclusive system building and enable universal implementation of social protection in their country.
The current pandemic and economic crises have both spotlighted the urgency for and put to test social protection structures and systems around the world. Governments have scrambled to ramp up and respond to the dynamic expansion of the virus, putting in place social and economic measures to meet the health, economic, educational, and social needs that have resulted from the crisis. Those with systems in place have done best in their response to Covid 19.
This crisis has illustrated the relatively limited capacity for some countries – particularly low-income countries – to respond to the social and economic consequences of COVID-19, despite the proven impact of the extension of social protection responses to the crisis. Countries with underdeveloped social protection systems may have limited fiscal space to expand social spending. Financing constraints have meant they have not developed social protection systems enough to support social and economic development and create resilient systems to protect against future crises.
Astonishingly, international funding for social protection is still extremely low, despite the universal right to social protection and the vast scientific evidence on the effectiveness of investing in social protection to prevent and reduce poverty.3
The ILO has estimated that the amount needed to finance social protection floors in the world’s lowest income countries would amount to around 78 billion USD. While this is just a fraction of a percent (0,25%) of global GDP, it represents around 15% of those countries’ collective GDP, which is an unsurmountable burden without support.
International solidarity, global cooperation, peer learning and pooled expertise and funding is urgently required to bridge the gaps in social protection systems to realize their universal guarantees for all.
The pandemic has brutally revealed the case for expanding social protection. Indeed, social protection has been identified by many international organisations, governments and stakeholders as a key element of “building back better” from this pandemic. The importance of income support and essential services including healthcare were highlighted alongside the massive job loss and health demands of this crisis. The crisis has also demonstrated the uneven capacity of governments to enact and finance emergency measures to deliver income and health support to vulnerable people, as well as to continue to stimulate aggregate demand.
While the proposal for a Global Fund has existed for nearly a decade, there is renewed political momentum due to the crisis. A number of governments, including France, social partners and civil society organisations accross the world4 have signaled their support for the Global Fund. The French government convened an experts’ conference in 2020 to discuss the potential of the fund, and stakeholders have raised the Fund on the agenda of a number of international fora, including the World Economic Forum, the World Social Forum, the UN Commission for Social Development, the High-level Policitcal Forum (HLPF) and the G20. The UN Special rapporteur for Extreme Poverty and Human Rights, Olivier De Schutter will present a report to the UN Human Rights Council on the possible governance and funding modalities of the Fund in June 2021.
Despite the increase and scale of social protection responses taken since the pandemic, the measures taken are uneven between countries and in many cases, merely temporary. Temporary measures are insufficient in creating the kind of resilience needed to embed social protection systems and to protect different population groups in future crises. In a study of emergency responses between April and September 2020 in 126 low- and middle-income countries it was found that:
Overall, performance of emergency programmes varied strongly, depending on the pre-existence of social protection systems, institutions and procedures. Building sustainable and rights-based social protection system worldwide is a high priority for crisis preparedness.
The Fund will support the building of national social protection systems, in line with the International Covenant for Economic, Social and Cultural Rights as well as international labour standards including ILO Convention 102 and Recommendation 202. The GFSP’s expenditure will be publicly accountable and subject to regular external audits and evaluations.
The Global Coalition for Social Protection Floors is fully supportive of sound financial management, transparency and accountability and recommends full and effective engagement of social partners, civil society organisations and other relevant organisations in all phases, including planning of social protection reforms, implementation and monitoring.
Indeed, social protection is primarily a responsibility of national governments as set out in ILO recommendation 202. Accordingly, governments can expand the fiscal space for social protection through various methods such as domestic resource mobilization, budget reprioritization and fighting illicit financial flows.
However, major financing gaps for social protection persist with challenges for some governments to invest in adequate national social protection systems. And alongside the national responsibility, there is also a need for and duty of international solidarity. Through the Fund, this solidarity will take the form of sharing of financial resources as well as knowledge and experiences, to the mutual benefit of the participating countries.
The fund will have a catalytic role in kick starting financing of social protection systems. This kick-starting role will take the form of technical and advisory assistance and co-financing of social protection systems: i.e. joint financial contribution of governments and the fund.
Additionally, to ensure governments’ commitment to domestic resource mobilization and investment in social protection, necessary for sustainable social protection systems, the fund will work in a coordinated manner with international fora, including the Addis Tax Initiative and the Platform for Collaboration on Tax.
Social Protection is a human right. The gap is still large between those that can claim this right and those that are denied it. Decisive action is required by national governments and the international community.
Political will is needed to implement the universal right to social protection. The Global Fund is an expression of that will. The finance and all the evidence needed is in the hands of decision makers. It is time to give social protection a high-profile, political forum where all stakeholders can be involved.
International aid only covers about 3% of the social protection sector financing gap in low-income countries (Manuel et al., 2020) and social protection currently makes uponly a small portion of Official Development Assistance.
Social protection gaps leave 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 be a key element in a global effort to “build back better” and strengthen crisis resilience.
As a mechanism of global governance, the Fund would transcend national politics and the geopolitical interests tied to bilateral aid and decrease the fragmentation of aid.
The international financial architecture does not provide global support for social protection. Key agencies are required to work according to their mandates: The ILO is setting standards and provides advisory support and technical advice but lacks a large scale funding mechanism. The World Food Programme mandate is on humanitarian contexts and short-term funding cycles. UNICEF’s mandate is to focus mainly on children. UNDP supports development and the WHO is focused on health, etc. Nevertheless, external and donor government institutions fund many types of social protection programmes, often without coordination, reinforcing fragmentation and partial coverage. Despite knowledge that the right to social protection is being denied to billions, building systems to ensure statutory mechanisms are in place for the right to social protection for all is under-developed and underfunded.
Given the cross-cutting nature of social protection, the Global Fund will support existing forms of cooperation between donors and partner countries. The Global Fund for Social Protection will lead to a consolidation of existing financing mechanisms and enable domestic financing over the long term.
Many times, pooling funds globally for high priority issues has been the instrument of choice to engage for common goals and coordinated progress in various specific sectors. Examples include health (the Global Fund for AIDS, Tuberculosis and Malaria), education (Global Partnership for Education and Education Cannot Wait), and climate (Green Climate Fund) as well as the cross-sectoral Agenda 2030 (Joint SDG Fund).
There are important lessons to learn from the earlier experiences of global funds. Among them is the observation that global funds were able to mobilize 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.5
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).6
Earlier experiences of global funds also have been subject to strong criticism relating to donor dominance and additional bureaucracy. Therefore, specific design features – mandate, governance structure and procedures – are extremely important. See question on governance below.
Source: Marcus Manuel, webinar 7 October 2020.
Some global funds have been criticized for having a narrow, “vertical” focus on interventions that operate in silos rather than being integrated in national systems. That is particularly the case with the Global Fund against HIV-AIDS, Malaria and Tuberculosis, which, as its name indicates, targets specific diseases instead of supporting health systems holistically.
However, as social protection is by definition a horizontal set of policies to address a broad range of rights and needs, it is a good basis for creating a global fund that will adopt a holistic approach to each country’s national plans for right based social protection to deliver universal social security guarantees, including floors, that all countries are signed up to.
(Existing initiatives are in particular the coordination made through SPIAC-B (Social Protection Inter-Agency Cooperation Board), USP2030 (Universal Social Protection 2030 Partnership), and the ILO Flagship Programme on “Building Social Protection for All”)
A number of initiatives at the international level to support the expansion of social protection are already in place, including USP 2030 and SPIAC-B. However, these initiatives mainly seek to ensure the coordination of policy positions and activities between different international institutions, rather than coordinating advisory and technicola support and financing. The Global Fund for Social Protection would thus be distinctly different from existing international initiatives as it would allow for joining up financial, advisory and technical resources from different international-level institutions with the aim of supporting joined up and universal social protection expansion.
As a global fund would support better coordination of support towards social protection, it would be more efficient than existing bilateral ODA, as the risk of duplication will be minimised, and standards and requirements will be coordinated/unified. Harmonization is a core principle of aid effectiveness. A global fund would also be able to make long term commitments in a way that bilateral agencies may not be able to. The pooling of several, therefore bigger, sources of funding can be expected to result in greater impact that countries can show for in their ODA’s effectiveness.
Social protection is a human right currently denied to billions. Its purpose is to prevent and reduce poverty throughout the life course and it is key to health, food security, and reducing inequality.
Social protection has been proven to be a very effective means of combating hunger and poverty, supporting skills development, education and employment, resilience and overall economic performance. Secure income protects against life-course risks as well as exogenous shocks, gives autonomy and dignity and promotes inclusive economic development. Secure income enables access to essential services, such as health care, education, water and housing.
Social protection for all distributes wealth and supports gender equality for all age groups as well as inclusive and socially cohesive societies.
Governments are the duty bearers for delivering on the right to social protection, in line with international human rights instruments and ILO standards. The Global Fund should focus support on building national systems. However, there might be situations of failing states, where local non-governmental and even external actors might have to take an important role. The end objective of the fund should however always remain to build national social protection systems embedded in law. It is also possible that governments choose to involve local civil society organisations for the provision of social protection services, within their national systems.
The governance must be based on the principles of the relevant ILO labour standards and recommendations, in particular Convention 102 on Social Security, Recommendation R202 on Social Protection Floors and R204 on Formalising the Informal Economy, as well as on the principles of development effectiveness (Paris Declaration, Busan Partnership agreement, Global Partnership for Effective Development Co-operation).
1. Democratic country ownership: Social protection floors are specific. The decision as to how their universal reach is to be accomplished is the responsibility of the governments who must answer to their rights holders, their inhabitants. Building on existing structures in each country is best for the administrative implementation of these programmes as it will contribute to strengthening domestic structures.
2. Representation and inclusivity: All stakeholders, including donors, governments and civil society need to be adequately represented in the highest decision-making body of the organisation. Civil society represents rights holders, to include trade unions and informal workers organisations, women, people with disabilities, minorities, older persons, refugees and displaced persons, migrants and those living in poverty.
3. Accountability and transparency: Accountability extends to all people who are to be covered by social protection. This must be ensured by representation, as well as effective control and monitoring procedures, including internal and external audits, evaluation and complaint & redress mechanisms. Public oversight of the management of funds will be achieved through multi-stakeholder bodies and accountable reporting. Transparency is the key to realise effective and participatory monitoring and accountability.
As it is a human right, social protection must be available to all people at all times. This means also during all shocks, whether household level shocks or large scale. The Global Fund must aspire to this if it is to realise people’s right to social protection. Public social protection systems must be able to flex in and out to meet additional caseloads in response to widespread shocks.
This means fundamentally, that delivering social protection, even during humanitarian shocks must be part of the basic social protection floor and so the Global Fund must help countries build in shock responsiveness as part of all social protection systems.
We recognise that not all countries have the capacity for this at this time, and we recognise too, that particularly in cases of conflict or state fragility, this will be difficult. The Global Fund will contribute to this in the following ways:
The funding for this shock responsiveness needs to be established through a separate allocation of the Global Fund for Social Protection which will provide for scaling up social protection during crises.
2 See e.g. the African Union, Agenda 2063 “The Africa We Want” (2015), p. 55; see also Art. 3 c) and e) of the Protocol to the African Charter on Human and Peoples' Rights on the Rights of Citizens to Social Protection and Social Security (2021).
3 In 2019 total ODA (all donors) amounted to 192,15 billion USD. Of this only 2,26 billion was spent on Social protection (OECD-DAC, CRS code 16010)
6 Michael Cichon, ‘Turning the COVID-19 crisis into an opportunity: What’s next for social protection, side event on A Global Fund for Social Protection’, October 2020, https://www.youtube.com/watch?v=wxxL10lMy6Q
The US Coalition of the GCSPF sent a letter and a briefing on “Expanding social protection: benefits for workers, businesses, and communities” to the US government to support the global fund at both the G7 and G20.
May 7, 2021
Mr. Jake Sullivan, National Security Adviser
The White House
1600 Pennsylvania Ave N.W.
Washington, D.C. 20500
Dear Mr. Sullivan:
We, the undersigned organizations, urge the United States government to endorse the establishment of a Global Social Protection Fund during the next G7 and G20 summits. Both provide a critical opportunity for the world’s largest economies to come together and coordinate a response to the pandemic and to meet future challenges.
Less than a third of the global population has access to comprehensive social protection systems. This leaves two-thirds of the world’s population unprotected in times of need, and from national or global economic shocks, such as that caused by the COVID-19 pandemic.
The current pandemic has demonstrated the value of policies such as income or unemployment support, allowing companies to retain workers and provide income for workers. Social protection systems also safeguard worker health and safety. Essentially, social protection systems offer flexibility and adaptability, allowing for workers and businesses to better withstand disruptions and changes to the economy.
The value of social protection systems, however, goes beyond times of crisis, providing broader economic benefits such as enabling greater workforce participation and allowing for entrepreneurial risk.
We believe that the United States government has a key role to play in promoting social protection systems – actively contributing to, exercising critical oversight of, and ensuring transparency with their development. We urge the U.S. government to join the French government in championing a Global Social Protection Fund based in multilateral and regional development banks. The U.S. government should also direct its own development assistance towards the creation of social protection programs in key developing countries.
The attached briefer provides a summary of our recommendations for creating social protection programs in the world’s poorest countries and certain priority middle income countries.
The U.S. government, supported by business, civil society and the labor community, can expand social protection to the world’s most vulnerable at a reasonable cost.
We hope to meet with an interagency team from the National Security Council (NSC), U.S. Agency for International Development (USAID), the State Department and the Department of Labor (DOL) to discuss how to build greater support for social protection programs.
American Apparel and Footwear Association
Fair Labor Association
Fontheim International, LLC
Human Rights Watch
May 7, 2021
Why support a global fund for social protection and increased funding for social protection programs?
Despite the benefits of social protection, less than a third of the world’s population are covered by comprehensive social protection systems and less than half have access to at least one social protection benefit. This leaves the vast majority of the world’s people unprotected in times of need, or from national or global economic shocks.
Expanding social protection is economically feasible for the vast majority of countries, and so governments need to work to ensure adequate social spending[iv]. However major financing gaps exist for the world’s poorest countries[v], inhibiting the extension of social protection systems. The International Labor Organization (ILO) has estimated that the amount needed to finance social protection floors in the world’s lowest income countries would amount to around 78 billion USD[vi]. This amount represents around 16% of the collective GDP of the world’s lowest income countries, yet at the global level it represents less than 0.25% of the world’s GDP –highlighting the potential of global cooperation to support the financing of social protection.
What is the role of business?
While governments have the primary responsibility in setting up social protection systems, businesses also play an important role. Businesses already play a significant role by ensuring key social protections for workers in their supply chains. Businesses, along with governments and others, have provided ad hoc assistance to their workers in response to the pandemic. In addition, businesses significantly contribute to social protection financing, as social protection systems tend to be funded through a combination of social security contributions (generally funded through a mix of employer and worker contributions) and through taxation – which together can ensure a solid financing base for social protection.
Experience also shows that in countries with weak systems of social protection, businesses can also play a crucial and catalytic role by speaking up for the business case for setting up social protection and providing a positive signal to governments to set up social protection. Finally, businesses can raise public awareness on the importance of social protection and help generate broad public and political support for social protection reforms.
At the global level:
In the US government:
What is social protection?
Social protection is an internationally recognized human right. It provides critical support to people who are facing situations such as unemployment, sickness, maternity, widowhood or old age. Social protection policies include income support and essential services. In the US, social safety net programs is another term used to describe these same social protection programs that provide a “net” or protection for vulnerable and poor families.
What are the benefits?
Social protection has broad benefits for people and their communities. It supports and raises people’s incomes and living standards and prevents poverty, social insecurity and social exclusion. It has also been shown to reduce inequalities and promote social cohesion.
Social protection moreover has broad benefits for businesses and the wider economy. Investment in social protection and essential services – such as health, education and care services – has been shown to have positive effects on skills, employability, productivity and overall firm-level performance[i]. Formal childcare and elder care arrangements also remove barriers for women to enter and remain in the labor market. In countries where adequate social protection systems exist, enterprises are more resilient to shocks, and this in turn reduces reputational and other risks. Setting up publicly organized social protection systems helps to ensure a fair floor of competition between companies, since social protection is afforded to all workers and not only to those in businesses with privately organized insurance schemes and benefits. Expanding social protection to all, including income support to small businesses owners and the self-employed, can also support entrepreneurship by reducing personal financial risks associated with setting up a business. Expanding social protection can moreover support the transition from the informal to formal economy by reducing the financial desperation that forces people to enter into informal, unregulated work arrangements.
During crises, social protection can also play a critical role in maintaining jobs, ensuring occupational health and safety protections and supporting workers’ incomes. The COVID-19 pandemic has illustrated how a number of countries have successfully managed to put in place temporary unemployment schemes and other income support measures that allowed companies to retain their workers and provided job and income security to the workers themselves. The current health pandemic underscores the importance of building and maintaining strong social protection systems that can provide the health care needs for families in the home and protections like personal protective equipment to keep workers safe in their workplaces.
There are also wider macroeconomic benefits to social protection, including increased overall employment and tax revenue, as well as strengthened aggregate demand. Studies have also shown that during the 2008 financial crisis, countries that had effective social protection systems were able to respond to the crisis better because such benefits cushioned consumption and prevented crises from getting worse; the cost of spending on social protection was typically half the economic cost of rising unemployment that could have happened[ii]. In short, ensuring access to social protection is an investment that empowers people to adjust to changes and disruptions in the economy and in the labor market, and social protection systems act as automatic social and economic stabilizers. They help stimulate the economy in times of crisis and beyond and help support a transition to a more inclusive and sustainable economy.
Social protection is fundamental to mitigating the impact of climate change on working families. Climate change and the policies intended to mitigate it have a significant impact on people’s direct environments, lives, jobs, incomes and communities all across the globe. Estimates show that over 100 million people could be pushed into extreme poverty as a result of climate change by 2030. Investments in a strong social protection program could reduce this number drastically to 20 million. The phase-out of high-carbon industries requires a just transition1 process where workers at risk of losing their jobs receive social protection as well as other support to maintain their income and access to other well-paying jobs. Environmental and socio-economic risks are strongly interconnected and ensuring adequate universal social protection is an essential component of the just transition to a sustainable, zero-carbon economy.
Because of the numerous benefits of social protection, there is broad international consensus on the need to extend it, as underlined by international labor standards[iii], UN Sustainable Development Goals Target 1.3, the Global Partnership for Universal Social Protection, and the International Labor Organization’s Centenary Declaration. The 2020 ITUC Global Poll of the general public in 16 countries shows near universal public support for social protection.
[i] European Commission (2013) Evidence on Demographic and Social Trends, Social Policies’ Contribution to Inclusion, Employment and the Economy; ILO (2019) To what extent is social protection associated with better firm level performance?
[ii] Australian Government: Department of Foreign Affairs and Trade (2014) Social protection and growth: Research synthesis. Social protection and growth: Research synthesis.
[iii] There are a number of international labor standards in the area of social protection, which set out key design principles: most notably ILO Convention 102 on Social Security and ILO Recommendation 202 on Social Protection Floors.
|e-GCSPF # 52 - May 2021|
Over 200 civil society organizations and trade unions unite to call for a Global Fund for Social Protection to protect the most vulnerable during COVID-19 and beyond.
The programme Improving Synergies Between Social Protection and Public Finance Management provides medium-term support to multiple countries aiming to strengthen their social protection systems at a national level and ensure sustainable financing. The programme aims to support countries in their efforts towards achieving universal social protection coverage.
This initiative is implemented jointly by the ILO, Unicef, and the GCSPF.