The poor need social protection most

ADB
Sri Wening Handayani

A family in rural Lao PDR. Supplied

In our July blog poll, we asked our readers to tell us who needs government social protection systems most in developing Asia, a region that is still seeing economic expansion and population growth but which—for the most part—has few pension, health, and other social assistance schemes.

Over half (51%) of the respondents said the poor need social protection the most in the region. This may seem obvious given that 1.4 billion people in Asia are estimated to live on less than $2 a day. Data from ADB’s Social Protection Indicators show that about half of Asia’s population lacks basic social protection. And even where it exists for the poorest of the poor, it usually provides inadequate benefits, and poor targeting means it sometimes ends up in the pockets of the wrong people – those not living in poverty and technically not needing as much assistance.

But as well as those living below national poverty lines, we must also take into account those just above them. They may even be defined as middle class if their income, for example, is even slightly above the $2/day threshold commonly used to define poverty. The fact is that they are highly vulnerable to slipping back into poverty if there is a sudden death or illness in the family, bad weather wipes out a home or crops, or if they lose their job. This is particularly the case for those who don’t have a job in the public sector or formal private sector, and so are not eligible for any kind of health, unemployment, or insurance help.

The poor, however, are just one of the marginalized and disadvantaged groups that need social protection to reduce their vulnerable status.

In our survey, 31% of participants believe the elderly are most at risk from the lack of social protection programs in developing Asia. The population is aging in most countries and coverage by social protection programs for the elderly is skewed in favor of (relatively) better-off households that can afford to make contributions to pension plans, and very poor households that gain some access to other social assistance. Extending coverage of existing elderly programs to include the ‘missing middle’ households is particularly difficult for countries with a large rural sector or urban informal sector. Another challenge is coming up with sustainable financing solutions for both contributory and non-contributory pensions.

So far, progress on social protection reaching a bigger chunk of the elderly has been uneven, with the People’s Republic of China (PRC), Mongolia, Nepal, Thailand and Viet Nam among the leaders, while lower middle-income countries such as Cambodia, Lao PDR, Myanmar, and few Pacific island states have been left behind.

12% of ADB blog readers think the youth should be prioritized for labor market protection programs in the region. While the population in most Asian countries is indeed aging, India, Pakistan and the Philippines still have relatively young populations and stand to benefit from this economic boost – if they can figure out how to nurture it. For instance, many young Asians are unemployed and/or are employed in the informal sector. Labor market protection measures should thus include youth skills development matched with employers’ demands. If the youth lacks access to the skills they need to find decent jobs in the formal sector, even those ‘young’ countries will lose their demographic dividend.

Finally, for 8% of respondents, social protection programs must do more to care for the sick. Universal health coverage, once considered a pipe dream for developing Asia, is now a reasonable medium-term aspiration for the PRC, Indonesia, and Thailand. Boosting health insurance clearly makes a huge difference for families that can’t afford out-of-pocket payments, and we have witnessed for instance in Indonesia or Viet Nam that universal health coverage promotes better quality of services and greater health equity.

We ran the poll during the month of July ahead of the Asia Pacific Social Protection Week from 2-5 August 2016 at ADB headquarters in Manila. The event is bringing together key experts in government, think tanks, civil society and the private sector to discuss current and emerging issues on social protection.