The Covid-19 pandemic and its related shocks have revealed the value of public services and social protection floors. Institutions tasked with ending poverty like the World Bank are increasingly under pressure to support vital public services and play a key role in wider universal social protection (USP) discussions. The World Bank recently released its latest commitment to social protection: A Social Protection and Jobs Compass to “chart a course towards USP,” which provides guidance to Bank staff on jobs and social protection issues.
Following a limited consultation process, civil society were eager to respond to the Compass. Lena Simet of Human Rights Watch concluded that the Compass guidance note, “makes a strong commitment to USP. However, its guidance on how countries can get there is problematic.”
The Bretton Woods Institutions (BWIs) have long been challenged on their claims of being pro-poor in their approach to social protection. A wealth of evidence has highlighted the flaws of the targeted approaches to social protection preferred by the BWIs, such as Conditional Cash Transfers (CCTs), which have been shown to be ineffective at reaching the poorest – as the Bank itself acknowledged – prone to corruption, and less likely to protect human rights than universal schemes.
|Instead of simply dismissing public social insurance and potentially creating costly parallel structures, we call on the World Bank to support countries in adapting their social security systems to be more inclusive.
DR LAURA ALFERS, WIEGO
The International Trade Union Congress released a statement citing “considerable reservations”, about the Compass as it “prioritise[s] the extension of targeted, non-contributory social assistance at the expense of social security, especially pensions.” The Global Coalition for Social Protection Floors (GCSPF) also responded, echoing concerns about the Bank’s ‘universal’ approach, citing incompatibility with the Bank’s focus on privatised and voluntary schemes, and a “lack of references and alignment with human rights and international labour standards,” such as social security minimum standards of the International Labour Organisation (ILO) Convention 102 and Recommendation 202. GCSPF also highlighted that both private finance and voluntary private schemes, which rely on individuals to have savings and often are inaccessible to informal workers, are considered by the Bank to be alternatives to public social security. The Bank’s preference for privately schemes and targeted systems, which are methods to define eligibility for programmes between the poor, not only “fail to cover the majority of the population but also fail to reach the people living in dire situations, [it] also prevents States from developing their own social protection systems,” noted a September report by civil society organisations (CSOs) Action Against Hunger, Development Pathways and Act Church of Sweden titled Can a leopard change it’s spots?.
Dr Laura Alfers, of global network Women in Informal Employment: Globalizing and Organising (WIEGO) commented: “We welcome the commitment by the World Bank to Universal Social Protection. As informal workers remain largely excluded from social protection, it is encouraging that efforts to extend coverage to the ‘missing majority’ are central to the World Bank’s new strategy. However, we disagree with the promotion of voluntary savings schemes, which are presented as central tools to expand coverage to informal workers, and as ‘alternatives’ rather than complements to public social security. Instead of simply dismissing public social insurance and potentially creating costly parallel structures, we call on the World Bank to support countries in adapting their social security systems to be more inclusive.”
The World Bank’s influence over countries’ social protection spaces is significant; it describes itself as the largest funder of social protection, citing a portfolio of $29.5 billion across 71 countries. The Bank commits to the Global Partnership for Universal Social Protection to Achieve the Sustainable Development Goals (USP2030), a mission to achieve Sustainable Development Goal (SDG) 1.3.” Further to this, the Bank entered a global partnership with the ILO on achieving universal social protection in 2016.
USP2030 defines USP as “nationally defined system[s] of policies and programmes that provide equitable access to all people and protect them throughout their lives against poverty and risks to their livelihoods and well-being,” which can consist of “cash or in-kind benefits, contributory or non-contributory schemes, and programmes to enhance human capital, productive assets, and access to jobs…benefits/support for people of working age in case of maternity, disability, work injury or for those without jobs; and pensions for all older persons.” USP2030 also defines universal social protection as a human right.
UK-based CSO Development Pathways found that the BWIs not only do harm by prioritising poverty targeting, but have actively advocated for removing universal systems created by governments (see Observer Spring 2018). Both institutions tend to attach austerity-driven loan conditionalities focused on shrinking fiscal space and cutting public sector wage bills (see Observer Winter 2019), and national social protection systems are often the target of such cuts.
8 December 2022
Source: Bretton Woods Project.
Response from the Global Coalition for Social Protection Floors to the World Bank’s new Strategy for Social Protection.
With this statement, the Global Coalition for Social Protection Floors (GCSPF), representing more than 120 civil society organisations and trade unions from all over the world, intends to react to the World Bank’s new strategy for social protection, published under the title “Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for all”.
Recognising the human right to social security, as well as the central role that social protection plays in ensuring adequate standards of living, promoting inclusive and sustainable growth, enhancing resilience, and achieving the Sustainable Development Goal (SDGs), the GCSPF promotes the right of all people to social security and universal Social Protection Floors (SPF).
The GCSPF therefore welcomes the explicit commitment by the World Bank to Universal Social Protection (USP). We further appreciate the strategy’s systems approach to social protection, emphasising that comprehensive and effective coverage requires expansions of interconnected social insurance, social assistance, economic inclusion programmes, and care services. The recognition that social protection is not just an effective tool to fight poverty, but also vital to help people face a wider range of challenges and vulnerabilities throughout their lives, is likewise important. The emphasis that social protection, as well as tax systems, can reduce inequality is also crucial. While ambitious plans to expand coverage are necessary to close the large coverage gaps, the World Bank’s strategy rightly highlights the importance of ensuring the adequacy of benefits and the inclusion of marginalised and vulnerable groups that may face barriers to access. Given the widespread exclusion of informal workers from social protection systems, it is encouraging that efforts to extend coverage to the ‘missing majority’ are central to the World Bank’s new strategy.
The GCSPF also agrees that social spending is a necessary and effective investment in human development, as well as inclusive and sustainable growth. We hope that the new World Bank strategy represents a step up of support from International Financial Institutions on social protection, enabling in particular low-income countries to put in place adequate and comprehensive social protection systems in line with people’s rights. Increased investment in social protection is particularly important in the wake of the COVID-19 pandemic, which has decimated the incomes of the world’s poorest people and left low-income countries exposed to the current social, economic and ecological ‘polycrises’.
While the GCSPF appreciates the overall direction of the World Bank’s new social protection strategy, we have a number of serious concerns. Primarily, we are surprised by the lack of references and alignment with human rights and international labour standards. It thus appears as though the World Bank’s vision of universal social protection deviates from internationally agreed commitments and definitions, in particular social security minimum standards set out in ILO Convention 102 and Recommendation 202.
The GCSPF also disagrees with the role that private finance is accorded, as well as the promotion of voluntary private schemes, which are promoted as key mechanisms to expand coverage, in particular for informal workers, and presented as ‘alternatives’ rather than complements to public social security. Given the often low and volatile earnings of informal workers, and following the devastating impacts of the COVID-19 crisis, it is questionable whether individual savings accounts alone will offer much protection. The continued promotion of individualised and privatised approaches to social protection is all the more disappointing as the strategy recognises that the previous wave of pension privatisations in Latin America and Eastern Europe “did not lead to the expansion in coverage that early reformers envisioned, and the systems are also increasingly failing to deliver adequate pensions” (page 36). It is therefore crucial that the World Bank re-considers these efforts to individualise and privatise social protection and recognizes that the responsibility to realise the human right to social security cannot fall entirely on individuals but is instead a responsibility of governments. The GCSPF disagrees with the World Bank’s dismissive stance towards public social insurance systems and their ability to include informal workers, which certainly requires adaptations of systems but is clearly possible, as a number of countries are showing.
Even though the strategy is framed around universal social protection, it underplays existing efforts of governments to provide universal protection. The strategy claims that governments “have played a role in increasing access to risk management tools, but only in limited ways. [...]. First, they provide social assistance to a limited portion of the population who are either income-poor or vulnerable” (page 18). This ignores the fact that numerous countries across the income spectrum have made significant progress towards USP and introduced universal child benefits and social pensions.
While rightly emphasising the importance of reaching excluded and hard-to-reach groups, the strategy fails to recognise that universal programs tend to be the most effective way to reach all and leave no one behind. More generally, the strategy lacks a clearly articulated and credible pathway for the progression from largely poverty-targeted to universal systems. Therefore, we call on the World Bank to develop, through meaningful consultation, concrete action plans at national levels to move towards universality. It is concerning that in the recent past, the World Bank has discouraged or opposed the introduction of universal programs in many contexts. Moreover, we are worried that the World Bank is blurring the conceptual distinction between means-tested and universal benefits in an effort to reconcile the discrepancy between its endorsement of USP and its continued operational focus on narrowly targeted ‘safety nets’. While the strategy is less explicitly advocating for poverty-targeting than previous documents and refers to ‘progressive realization’ rather than “progressive universalism” the World Bank’s approach still fails to live up to the principles of social protection standards. Indeed, the persistent focus on poverty-targeting is evident in the promotion of ‘social registries’. While recognising significant challenges in their design and implementation, the strategy does not present convincing arguments or evidence that “dynamic inclusion” can overcome these challenges.
Despite welcoming the necessity of addressing unpaid care and domestic work, it is concerning that the World Bank appears to assume that the default provider of care services should be the private sector, with the state merely regulating or providing financing. Indeed, public care services are presented as if they were needed only in case of particular difficulties in the household. The GCSPF reiterates that care and education services should be publicly organised and accessible to all. The strategy could offer a more critical framing of the burden of unpaid domestic work, recognising the role of patriarchy, and that the impact of austerity on households is often cushioned by women absorbing both paid employment and domestic responsibilities simultaneously.
Finally, while appreciating the opportunities to engage with the World Bank during the development of the strategy, we regret that it was shared only in its final form, with no possibility to react to it. In addition, the finalised version did not take on board the comments provided by civil society in the process.
The strategy closes by stressing the importance of partnerships and collaboration between governments, donors, civil society, labour unions, and the private sector to achieve universal protection. As civil society, we intend to do our part by holding duty bearers to account, amplifying the voices of the people, and supporting the realisation of universal and rights-based social protection for all. We call on the World Bank to ensure the meaningful participation of civil society, unions and workers’ organisations in the operationalisation of the strategy at all levels.
(General Secretary of the International Trade Union Confederation, ITUC)
(UN Special Rapporteur on extreme poverty and human rights)
(Evangelical Lutheran Church in Tanzania – ELCT)
(Executive Director of the Global Initiative for Economic, Social and Cultural Rights)
(Project Officer, Church’s Auxiliary for Social Action)
(Director, the Africa Platform for Social Protection – APSP) guide you through different aspects of this new Global Fund explaining why we need the Fund and how it would work.
The Round Table “Winning the fight against poverty and inequality: a Social Protection Floor for Everyone” has been organised by the Friedrich-Ebert-Stiftung, Brot für die Welt and SOLIDAR in the framework of the Global Coalition for Social Protection Floors. This debate took place on 4th November 2015 in the European Parliament in Brussels.
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.