Building an economic floor under the poor
TheStar.com – opinion/editorialopinion
Published On Thu Nov 03 2011. By Carol Goar, Editorial Board
At the lowest point of the last recession, the United Nations called for the creation of a worldwide social protection floor to prevent the poor from falling into deeper deprivation.
It asked Michelle Bachelet, former president of Chile, to head a nine-member panel charged with turning the concept into a workable plan. And it appointed two UN agencies, the International Labour Organization and the World Health Organization, to do the legwork.
The panel has now completed its report, Social Protection Floor for a Fair and Inclusive Globalization. It intends to present it to the G20 leaders at their summit in Cannes this week, urging them to set floor levels of social protection for the vulnerable in their own countries and help the world’s neediest nations take the first steps.
The report comes an opportune time. As world leaders struggle to contain the Greek debt crisis, recapitalize Europe’s banks, keep credit flowing, stabilize global markets and head off another financial meltdown, almost no one is talking about the human cost of the upheaval. “People everywhere are anxious about the future, frustrated about the economy and upset with leaders,” UN Secretary-General Ban Ki-moon said. “Achieving social protection for all is critical to building fairer, more inclusive and more equitable societies.”
It is unlikely the plan will get a blanket endorsement from the G20. It runs counter to the direction of government policy in countries such as Canada, the United States, Britain and Japan. But it does have two strong backers — French President Nicolas Sarkozy, host of this week’s summit, and Brazilian President Dilma Rousseff have publicly welcomed the initiative.
A preliminary draft of the report was welcomed by the G20 labour ministers when they met in Paris in September.
Bachelet, who headed the Chilean government from 2006 to 2010, insists that establishing a floor level of social protection is feasible. She did it in her own country at a time of economic turbulence and political upheaval. She put in place free health care for seniors, free distribution of the “morning-after pill” to women and girls over 14, education and pension reform, comprehensive social services for preschool children from poor families, as well as two new subways lines in Santiago and pay-equity legislation. It didn’t bankrupt the treasury. Nor did it destroy her political career. She left office with an 84 per cent approval rating. (The Chilean constitution does not allow a president to serve two consecutive terms.)
“Extending social protection is a win-win investment that pays off both in the short term given its effects as a macroeconomic stabilizer, but also in the long term due to the impacts on human development and productivity,” the 60 year-old pediatrician said.
The report does not prescribe a one-size-fits-all approach or a universal standard. It recommends that each country move at its own pace, creating social floors that reflect its needs, priorities and fiscal capacity. But it does suggest four key principles:
• Build on what already exists. Plug holes, shore up weaknesses, coordinate disjointed health, housing, nutrition, education, employment and retirement support programs so people don’t fall through the cracks.
• Aim to move people from income support to opportunities for decent employment or entrepreneurship.
• Ensure that non-government groups are fully involved in setting the social protection floors and delivering the benefits and services.
• Anchor the process in sustainable domestic funding sources; revenues that will be there regardless of external circumstances. Otherwise, the floors will collapse, undermining public trust.
It is possible Bachelet’s report will be pushed aside by the European debt crisis or shelved for further study.
That would kill the hopes of the millions who haven’t recovered from the last recession and know they will hit hardest by the economic upheaval to come.
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