UN DESA Department of Economic and Social AffairsUN DESA Department of Economic and Social Affairs

MOVING THE SOCIAL POLICYMOVING THE SOCIAL POLICY

AGENDA FORWARDAGENDA FORWARD

Isabel OrtizIsabel OrtizSenior Interregional AdvisorSenior Interregional Advisor

United Nations DESAUnited Nations DESA

UN Commission for Social Development UN Commission for Social Development New York, February 2007New York, February 2007

Development for whom? Development for whom?

Inequality has risen in the Inequality has risen in the last decades: last decades:

Within countries Within countries Among countriesAmong countries

Inequality keeps risingInequality keeps risingUNUWIDER 2006UNUWIDER 2006

The benefits of The benefits of globalization, as it is globalization, as it is managed/mismanaged, managed/mismanaged, go to a few companies go to a few companies and individuals, in a few and individuals, in a few countries.countries. This is a result of the This is a result of the choice of economic and choice of economic and social policiessocial policies

Business as usual not Business as usual not an optionan option

Business as Usual not an OptionBusiness as Usual not an Option Standard Policy Advise 1980s-90s: Standard Policy Advise 1980s-90s:

Caused poverty and increased inequality (adjustment Caused poverty and increased inequality (adjustment programs, severe financial crisis) programs, severe financial crisis)

Interrupted nation-building development processes Interrupted nation-building development processes Increased political instability and conflict Increased political instability and conflict It constrained growth in developing countries! It constrained growth in developing countries! Remains part of conventional development thinkingRemains part of conventional development thinking

Are attempts to redress it (ie. PRSPs) good enough? Are attempts to redress it (ie. PRSPs) good enough? General Issues: targeting and residualism, employment, choice of General Issues: targeting and residualism, employment, choice of

social protection instruments, participation, trade, finance…social protection instruments, participation, trade, finance…

What happens in non-IDA middle income countries where no What happens in non-IDA middle income countries where no

PRS?PRS?

Bringing Equity to the Development AgendaBringing Equity to the Development Agenda 1995 Copenhagen World Summit: “A society for all” – United Nations DESA 1995 Copenhagen World Summit: “A society for all” – United Nations DESA

mandate to implement it – work on: mandate to implement it – work on: Employment and Poverty ReductionEmployment and Poverty Reduction Social groups (persons with disabilities, youth, older persons…)Social groups (persons with disabilities, youth, older persons…)

2005 World Summit: 2005 World Summit: governments’ pledged governments’ pledged more ambitious National more ambitious National Development StrategiesDevelopment Strategies, backed by increased international support, backed by increased international support

2005: UNDESA, UNDP and World Bank reports on Equity 2005: UNDESA, UNDP and World Bank reports on Equity

DESA works on governments’ requests – Advisory services on demand DESA works on governments’ requests – Advisory services on demand

Since 2005, main focus on National Development StrategiesSince 2005, main focus on National Development Strategies

2006: United Nations Policy Notes to guide National Development Strategies, on 2006: United Nations Policy Notes to guide National Development Strategies, on critical areas Developed with Nobel Laureate Joseph Stiglitz, Jomo K. critical areas Developed with Nobel Laureate Joseph Stiglitz, Jomo K. Sundaram and other alternative economists/sector specialists, with inputs from Sundaram and other alternative economists/sector specialists, with inputs from UN agencies UN agencies

1980s-90s Standard Policy Advise:1980s-90s Standard Policy Advise: New Paradigm/Consensus:New Paradigm/Consensus:Growth (“priority”) through Growth (“priority”) through deregulation, free markets, supply deregulation, free markets, supply side economicsside economics, , minimalist minimalist governments, residual social policies.governments, residual social policies.

Growth and equity through active promotion of Growth and equity through active promotion of national development. Winning “policy space”. national development. Winning “policy space”. Social and economic development integrated => Social and economic development integrated => actually bringing equity and social issues to all actually bringing equity and social issues to all policy domains.policy domains.

Anti-inflationary measures as core Anti-inflationary measures as core monetary policymonetary policy

Employment-generating growth as a priority, Employment-generating growth as a priority, some authors tolerant to limited inflation some authors tolerant to limited inflation

Fiscal policies: Minimal direct Fiscal policies: Minimal direct taxation taxation

Taxation for development and redistributive Taxation for development and redistributive purposespurposes

Financial liberalization, open capital Financial liberalization, open capital accountsaccounts

Selective capital controls to avoid financial Selective capital controls to avoid financial volatility, making finance work for real economy volatility, making finance work for real economy growth (regional development banks etc)growth (regional development banks etc)

Cuts in public expenditures, Cuts in public expenditures, avoiding fiscal deficitsavoiding fiscal deficits

Public investment for development; need to Public investment for development; need to expand governments’ “fiscal space” expand governments’ “fiscal space”

Privatization of public assets Privatization of public assets services, minimalist government services, minimalist government (state as predatory, crowding out (state as predatory, crowding out private sector) private sector)

Building state capacity to promote Building state capacity to promote development, public investment, technology development, public investment, technology policy policy

Free tradeFree trade Free trade not priority, growth of domestic Free trade not priority, growth of domestic activities prior to (selective) trade liberalizationactivities prior to (selective) trade liberalization

Bringing Equity to the Development AgendaBringing Equity to the Development Agenda

1980s-90s Standard Policy Advise:1980s-90s Standard Policy Advise: New Paradigm/Consensus:New Paradigm/Consensus:Residual social policies (minimal, Residual social policies (minimal, targeted to the poor), safety netstargeted to the poor), safety nets

Universal policies (for all). Importance of Universal policies (for all). Importance of social policies for development, equity, domestic social policies for development, equity, domestic market, nation building, political stabilitymarket, nation building, political stability

Labor flexibility, productivityLabor flexibility, productivity Decent work agenda, distribution issues (ie. Decent work agenda, distribution issues (ie. wage policies); employment a result of adequate wage policies); employment a result of adequate macro, economic and social policiesmacro, economic and social policies

Commercialization of social servicesCommercialization of social services Expansion of coverage of services (health) Expansion of coverage of services (health) ensuring retention (education)ensuring retention (education)

Cost recovery mechanisms (fees for Cost recovery mechanisms (fees for services)services)

Avoidance of user fees, except for upper Avoidance of user fees, except for upper income groups in tertiary servicesincome groups in tertiary services

Social Protection: pension reformSocial Protection: pension reform Importance of expanding pension coverage Importance of expanding pension coverage (social pensions) and addressing community (social pensions) and addressing community needs needs

No interest for culture and values No interest for culture and values (intangible)(intangible)

Culture and values important for tackling Culture and values important for tackling exclusion and building social cohesionexclusion and building social cohesion

No attention at sources of conflict No attention at sources of conflict (“political”)(“political”)

Conflict preventionConflict prevention

Selective participatory processesSelective participatory processes National coalitions and social pacts/dialogueNational coalitions and social pacts/dialogue

Prerequisites: Prerequisites:

National Coalitions: Strategies not technocratic; require National Coalitions: Strategies not technocratic; require national alliances to be sustainable; social pacts national alliances to be sustainable; social pacts

Integrating economic and social policies Integrating economic and social policies

STEPS:STEPS: DiagnosisDiagnosis of social and economic issues for all social groups of social and economic issues for all social groups Policy Priorities to Policy Priorities to build countries that are socially inclusive, build countries that are socially inclusive,

employment generating, economically robust and politically stable:employment generating, economically robust and politically stable: Macroeconomic policiesMacroeconomic policies Sector priorities (i.e. energy, water…)Sector priorities (i.e. energy, water…) Social policies (i.e. decent work, social protection…) Social policies (i.e. decent work, social protection…)

BudgetBudget in a multiannual MTEF in a multiannual MTEF Implementation arrangementsImplementation arrangements MonitoringMonitoring mechanisms including mechanisms including

comparable poverty line comparable poverty line

indicators for each of the social groups – preferably in the form, of indicators for each of the social groups – preferably in the form, of National Action Plans for youth, elderly, indigenous populations, National Action Plans for youth, elderly, indigenous populations, disabled, etc (reality check: what happens to people?) disabled, etc (reality check: what happens to people?)

How to prepare an equitable National Development How to prepare an equitable National Development Strategy Strategy

Sector Priorities for Equity and Poverty Reduction ISector Priorities for Equity and Poverty Reduction I AreaArea Typical interventions with Typical interventions with

EQUITABLE/PROGRESSIVE EQUITABLE/PROGRESSIVE outcomesoutcomes

Typical interventions with Typical interventions with INEQUITABLE/REGRESSIVE INEQUITABLE/REGRESSIVE outcomesoutcomes

CultureCulture Multicultural activities, popular events Multicultural activities, popular events that foster social cohesionthat foster social cohesion

Subsidies to elitist events/ Subsidies to elitist events/ exclusive artexclusive art

EducationEducation Universal primary and secondary Universal primary and secondary education; programmes to ensure education; programmes to ensure access and retention of studentsaccess and retention of students

User fees in primary and User fees in primary and secondary educationsecondary education

Energy and Energy and MiningMining

Rural electrification; life-line tariffs Rural electrification; life-line tariffs (subsidized basic consumption for low (subsidized basic consumption for low income households)income households)

Large power plants, Untaxed Large power plants, Untaxed oil/mineral extraction oil/mineral extraction

FinanceFinance Regional rural banks, microfinance; Regional rural banks, microfinance; managing finance (current accounts, managing finance (current accounts, capital flight…)capital flight…)

Reform/rescue of banking system Reform/rescue of banking system (transfers to large banks); (transfers to large banks); subsidies to large private subsidies to large private enterprisesenterprises

HealthHealth Universal primary and secondary Universal primary and secondary health services, nutrition programmeshealth services, nutrition programmes

User fees, commercialization of User fees, commercialization of health, tertiary highly specialized health, tertiary highly specialized clinics (e.g. cardiology centres)clinics (e.g. cardiology centres)

HousingHousing Subsidized housing finance, upgrading Subsidized housing finance, upgrading of substandard housingof substandard housing

Housing finance for upper income Housing finance for upper income groupsgroups

IndustryIndustry Supporting competitive, employment-Supporting competitive, employment-generating domestic industries, SMEsgenerating domestic industries, SMEs

DeregulationDeregulation

LabourLabour Active and passive labour programmes Active and passive labour programmes Labour flexibilizationLabour flexibilization

Sector Priorities for Equity and Poverty Reduction IISector Priorities for Equity and Poverty Reduction II

AreaArea Typical interventions with Typical interventions with EQUITABLE/PROGRESSIVE EQUITABLE/PROGRESSIVE outcomesoutcomes

Typical interventions with Typical interventions with INEQUITABLE/REGRESSIVE INEQUITABLE/REGRESSIVE outcomesoutcomes

MacroeconomicsMacroeconomics Employment-sensitive monetary and Employment-sensitive monetary and fiscal policies, countercyclical policies, fiscal policies, countercyclical policies, direct taxationdirect taxation

Cyclical policies, indirect Cyclical policies, indirect taxation (VAT)taxation (VAT)

Public ExpendituresPublic Expenditures Pro-poor expendituresPro-poor expenditures Military spendingMilitary spending

Rural DevelopmentRural Development Secure access to land, water, markets, Secure access to land, water, markets, livestock, credit for smallholderslivestock, credit for smallholders

Large investments such as Large investments such as irrigation systems that benefit irrigation systems that benefit landownerslandowners

Social ProtectionSocial Protection Non-contributory pensions, cash Non-contributory pensions, cash transfers, social services, etc.; almost all transfers, social services, etc.; almost all SP are aimed at redistribution SP are aimed at redistribution

Private pension systemsPrivate pension systems

TourismTourism Small-scale local companiesSmall-scale local companies Poorly taxed luxury hotel chainsPoorly taxed luxury hotel chains

TradeTrade Linking employment-generating local Linking employment-generating local companies with export marketscompanies with export markets

Most bilateral free trade Most bilateral free trade agreementsagreements

Transport and Transport and InfrastructureInfrastructure

Rural roads, affordable public transport, Rural roads, affordable public transport, non-motorized transport for households non-motorized transport for households (bicycles, buffalos, etc)(bicycles, buffalos, etc)

Some large (and costly) Some large (and costly) infrastructure investmentsinfrastructure investments

Urban DevelopmentUrban Development Slum upgrading, accessible universal Slum upgrading, accessible universal design design

Large urban infrastructure Large urban infrastructure projects in wealthy areasprojects in wealthy areas

Water Water Rural water supply and sanitationRural water supply and sanitation Poorly negotiated privatizationsPoorly negotiated privatizations

National Social PoliciesNational Social Policies Reasons of social policy: Reasons of social policy:

Intrinsic:Intrinsic: Social justice Social justice

Instrumental: GInstrumental: Governments use it pragmatically to: overnments use it pragmatically to: Enhance human capital and productive employmentEnhance human capital and productive employment Boost domestic demand Boost domestic demand Secure political support of citizensSecure political support of citizens Prevent conflict, create stable cohesive societiesPrevent conflict, create stable cohesive societies

Social policies- issues: Social policies- issues: Universal vs. targeted policiesUniversal vs. targeted policies Importance of speed Importance of speed How to create employment?How to create employment? Expanding coverage of social services and protectionExpanding coverage of social services and protection Preventing conflict and building social cohesionPreventing conflict and building social cohesion AffordabilityAffordability Cross-border issues: Regional social policiesCross-border issues: Regional social policies International aid supporting equityInternational aid supporting equity

Universal vs. Targeted Social PoliciesUniversal vs. Targeted Social Policies

Residual approach 1980s-90s:Residual approach 1980s-90s: Public services only for the poorPublic services only for the poor Main reforms focused on privatizing/commercializing services for Main reforms focused on privatizing/commercializing services for middle and upper classes (health, pensions, education)middle and upper classes (health, pensions, education) In a context of fiscal austerity, cost recovery mechanisms such as In a context of fiscal austerity, cost recovery mechanisms such as fees for services were introducedfees for services were introduced

Problems of targeting:Problems of targeting: Expensive, at about 15% total programme costsExpensive, at about 15% total programme costs Complex to implement – not advised when poor large numbersComplex to implement – not advised when poor large numbers It backfired politically, middle classes had to pay for both expensive It backfired politically, middle classes had to pay for both expensive services and for the poorservices and for the poor Public services became of bad quality (and not accessible when fees)Public services became of bad quality (and not accessible when fees)

United Nations agencies defend UNIVERSAL services (= for all, including United Nations agencies defend UNIVERSAL services (= for all, including middle classes, as part of a country’s social contract) combined with middle classes, as part of a country’s social contract) combined with targeting to fast-track access of the poor. targeting to fast-track access of the poor.

Targeting is administratively complicated:Targeting is administratively complicated: Undercoverage of the “Success” Stories in the AmericasUndercoverage of the “Success” Stories in the Americas-Brazil: Bolsa Escola 73% of poor not reachedBrazil: Bolsa Escola 73% of poor not reached-Mexico Oportunidades 40% of poor not reachedMexico Oportunidades 40% of poor not reached-United States Food Stamps 50% of poor not reachedUnited States Food Stamps 50% of poor not reached

For For social servicessocial services, it is generally suggested:, it is generally suggested:

On the supply side:On the supply side: To increase budgetary allocations for social programmes to expand To increase budgetary allocations for social programmes to expand

coverage, aiming at universal provision.coverage, aiming at universal provision. To eliminate barriers to access for poor and excluded groups such as: To eliminate barriers to access for poor and excluded groups such as:

Fees for services and hidden fees such as school uniforms, Fees for services and hidden fees such as school uniforms, extracurricular activities, under-the-table payments, etc.extracurricular activities, under-the-table payments, etc.

Complicated or restrictive administrative procedures. Complicated or restrictive administrative procedures. Services provided in languages not spoken by the population.Services provided in languages not spoken by the population.

To address the differing needs of women and menTo address the differing needs of women and men To target inaccessible remote areas.To target inaccessible remote areas. To include minorities and special population groups, designing targeted To include minorities and special population groups, designing targeted

programmes if necessary.programmes if necessary. To improve the quality of services from a user-perspective.To improve the quality of services from a user-perspective.

On the demand side:On the demand side: To raise awareness and promote behavioural change.To raise awareness and promote behavioural change. To support demand for services (e.g. ensuring that people have To support demand for services (e.g. ensuring that people have

knowledge of them, using conditional cash transfers if necessary).knowledge of them, using conditional cash transfers if necessary).

Key Issues: Education and Health Social ServicesKey Issues: Education and Health Social Services

Most development programs tend to take a long time to show results (ie. Most development programs tend to take a long time to show results (ie. education). education). When a government intends to develop equitable social policies, When a government intends to develop equitable social policies, it may want to consider two different sets:it may want to consider two different sets:

Medium and long-term policiesMedium and long-term policies include most important initiatives such as include most important initiatives such as expanding coverage of education services, health and social security, expanding coverage of education services, health and social security, improved labour standards, adequate wage and employment policies, etcimproved labour standards, adequate wage and employment policies, etc

Short-term high-impact initiativesShort-term high-impact initiatives:: A set of fast high impact initiatives A set of fast high impact initiatives can assist governments address basic needs among the neediest can assist governments address basic needs among the neediest segments of the population. These programs may contain components segments of the population. These programs may contain components such as: such as: free school meal programmesfree school meal programmes nutrition, vitamin and micronutrient nutrition, vitamin and micronutrient supplements for mothers and children,supplements for mothers and children, upgrading programmes for upgrading programmes for substandard housing (water, substandard housing (water, household repairs), household repairs), social pensions for the elderly poor social pensions for the elderly poor or persons with disabilities.or persons with disabilities. Low cost (Zero Hunger 0.2%GDP, Low cost (Zero Hunger 0.2%GDP, rural pensions 1% GDP)rural pensions 1% GDP)

Speed MattersSpeed Matters

Examples: Examples: Fome Zero Brazil (2003)Fome Zero Brazil (2003)Hambre Urgente Argentina (03)Hambre Urgente Argentina (03)Bolivia Urgente (2006)Bolivia Urgente (2006)Pobreza O Nicaragua (2007)Pobreza O Nicaragua (2007)

Key Issues: Employment – Jobless growth, Labour FlexibilityKey Issues: Employment – Jobless growth, Labour Flexibility Growth does not necessarily Growth does not necessarily generate employment => It doesgenerate employment => It doesin China, but in most countriesin China, but in most countriesthe experience has been the experience has been ““Jobless Growth”Jobless Growth” In most developing countries, In most developing countries, particularly in Africa, the number particularly in Africa, the number of “working poor” has increased; of “working poor” has increased; labour reforms led to increased labour reforms led to increased informalization of the labour force, informalization of the labour force, predominantly in Latin America, predominantly in Latin America, Easter Europe and the former Easter Europe and the former Soviet Union. Soviet Union. In 1965, CEOs were paid 51 times In 1965, CEOs were paid 51 times as much as a minimum wage earner as much as a minimum wage earner in the United States; in 2005, this in the United States; in 2005, this had risen to about 821 timeshad risen to about 821 times Increased precariousness of Increased precariousness of work not only had negative impacts work not only had negative impacts on people selling their labour, it also on people selling their labour, it also reduced national tax bases reduced national tax bases and induced migration.and induced migration.

1980s-90s standard policy advise 1980s-90s standard policy advise fostered labour market reforms, as an fostered labour market reforms, as an investment incentive.investment incentive.

However, lHowever, labour flexibility not abour flexibility not accompanied by increased employmentaccompanied by increased employment

The strong welfare states of northern The strong welfare states of northern Europe (Denmark, Netherlands, Norway Europe (Denmark, Netherlands, Norway and Sweden), with employment rates as and Sweden), with employment rates as high as the US and the UK, demonstrate high as the US and the UK, demonstrate that employment is fully compatible with that employment is fully compatible with “rigid” labour markets, high social “rigid” labour markets, high social protection and collective bargaining. protection and collective bargaining.

Employment is not related to labour Employment is not related to labour market flexibility, but to economic market flexibility, but to economic policies that are effectively coordinated policies that are effectively coordinated with adequate social policies.with adequate social policies.

Generating DECENT employment must Generating DECENT employment must be first priority of a National be first priority of a National Development StrategyDevelopment Strategy

Key Issues: Employment IIKey Issues: Employment II HOW TO CREATE EMPLOYMENT? Employment is a result of: HOW TO CREATE EMPLOYMENT? Employment is a result of:

Promotion of growth through macroeconomic and sector policies Promotion of growth through macroeconomic and sector policies EEffects of expansive monetary and fiscal policy on aggregate demand; ffects of expansive monetary and fiscal policy on aggregate demand;

debate tight monetary policy does not generate employment.debate tight monetary policy does not generate employment. Adequate exchange rate policy combined with industrial policy stimulates Adequate exchange rate policy combined with industrial policy stimulates

output growth; gradual and sequential trade opening to support it output growth; gradual and sequential trade opening to support it

Adequate Labour Policies: Adequate Labour Policies: It is not only about generating employment, many It is not only about generating employment, many people work but cannot bring their families out of poverty, people work but cannot bring their families out of poverty, adequate salary and adequate salary and working conditions essentialworking conditions essential => => Decent work agenda.Decent work agenda.

Main labour policies:Main labour policies:Active labour market programmesActive labour market programmes•Direct employment generation (promoting SMEs, cooperatives, wage subsidies, public works, guaranteed job schemes).•Labour exchanges or employment services (job brokerage, counselling offices)•Skills development programmes (training and retraining of labour to enhance employability and productivity).•Special programmes for youth and persons with disabilities. Passive Labour market policiesPassive Labour market policies Unemployment insurance, income support policies. Labour regulations and standards such as adequate wage policies (minimum salaries, wage indexation, equal pay for work of equal value), job security provisions (recruitment/dismissal of employees), working conditions (occupational health and safety minimum age, maximum working hours and overtime, leave provisions), special protection for mothers, and antidiscrimination provisions to protect women and minorities.Social Pacts/Dialogue – Collective Bargaining Social Pacts/Dialogue – Collective Bargaining

Key Issues: Social Protection IKey Issues: Social Protection I Social protection programmes include:Social protection programmes include:

Social insuranceSocial insurance (old-age pensions, disability, etc) (old-age pensions, disability, etc) Social assistance Social assistance (programs for vulnerable groups like streetchildren, (programs for vulnerable groups like streetchildren,

battered women, etc).battered women, etc). Schemes to assist communities and the informal sectorSchemes to assist communities and the informal sector include include

agricultural insurance, food security programmes, social funds, disaster agricultural insurance, food security programmes, social funds, disaster prevention and management.prevention and management.

Because of the strong redistributive character of most social protection Because of the strong redistributive character of most social protection policies, they were not favoured by conventional approaches during the policies, they were not favoured by conventional approaches during the 1980s-90s (except pension reform projects).1980s-90s (except pension reform projects). In extreme cases like Bolivia, the In extreme cases like Bolivia, the Ministry of Social Security was closed down.Ministry of Social Security was closed down.

In the 1980s-90s, push for pension reforms, moving away from PAYGO public In the 1980s-90s, push for pension reforms, moving away from PAYGO public systems towards funded systems (privately managed, invested in capital systems towards funded systems (privately managed, invested in capital markets) (next slide)markets) (next slide)

Given the urgency to eradicate poverty, social protection, in particular social Given the urgency to eradicate poverty, social protection, in particular social transfers/pensions, are currently at the forefront of the social development transfers/pensions, are currently at the forefront of the social development agenda. agenda.

Key Issues: Social Protection II - PensionsKey Issues: Social Protection II - Pensions Multi-pillar Pension System

PILLAR I PILLAR II PILLAR IIIRedistributive Funded FundedPAYGO Voluntary

Funded pension systems (private pillars II-III)Funded pension systems (private pillars II-III)- Do not serve the poor or low income groups; pension - Do not serve the poor or low income groups; pension coverage did not expand.coverage did not expand.- Are expensive (transition costs) – ie. In Brazil, 7.3% GDP, - Are expensive (transition costs) – ie. In Brazil, 7.3% GDP,

as as compared to 1% of GDP public rural pensions for the poorcompared to 1% of GDP public rural pensions for the poor- Administrative costs of pension funds are very high, - Administrative costs of pension funds are very high,

makingmakingreturns on investments lowerreturns on investments lower. . - Financial risk left to pensioners; the state has to bail out - Financial risk left to pensioners; the state has to bail out companies and provide safety nets in case of crisis. companies and provide safety nets in case of crisis.

- By investing savings in capital markets, loss of resources to governments- By investing savings in capital markets, loss of resources to governments

Social Pensions (public, pillar I):Social Pensions (public, pillar I):- - Have high impact on poverty reduction (ILO: 35%Have high impact on poverty reduction (ILO: 35%to 40% reduction)to 40% reduction)- Older people spend their pensions supporting - Older people spend their pensions supporting household, important for food securityhousehold, important for food security- Ideal to expand coverage- Ideal to expand coverage- Monetizes rural economies- Monetizes rural economies- Countries like Brazil, Argentina, South Africa, - Countries like Brazil, Argentina, South Africa, Namibia, Zambia, have introduced non-contributory Namibia, Zambia, have introduced non-contributory pension schemes as an instrument to fight povertypension schemes as an instrument to fight poverty. . - Increased donor support, relatively easy to - Increased donor support, relatively easy to implement through budgetary supportimplement through budgetary support

How older poor spend pension cash

transfer

Preventing Conflict and Building Social Cohesion IPreventing Conflict and Building Social Cohesion I

Most national and sector strategies, done by Most national and sector strategies, done by economists and sector specialists => blind to economists and sector specialists => blind to conflict matters, designed ignoring sources of conflict matters, designed ignoring sources of tension as it is perceived as “political” beyond tension as it is perceived as “political” beyond the development domain. Business as usual no the development domain. Business as usual no longer possible. longer possible.

Early warning:Early warning: Conflict prevention starts by Conflict prevention starts by detecting its probability. detecting its probability. Tackling potential causes of conflictTackling potential causes of conflict:: National Development Strategies are the National Development Strategies are the perfect setting to prioritize interventions to perfect setting to prioritize interventions to deal with the internal sources of tension deal with the internal sources of tension identified, before conflict takes violent forms, identified, before conflict takes violent forms, for instance:for instance: where male youth unemployment a factor = where male youth unemployment a factor = youth employment programsyouth employment programs where ethnic prejudice and myth-creation a where ethnic prejudice and myth-creation a factor = programs for changing valuesfactor = programs for changing values where inequality a factor = equitable policies as where inequality a factor = equitable policies as described earlierdescribed earlier

Early Warning: Risk Screening Early Warning: Risk Screening Indicators:Indicators: History of earlier conflictsHistory of earlier conflicts High prevalence of poverty High prevalence of poverty and inequality, elite and inequality, elite capture of benefitscapture of benefits Dependency on a primaryDependency on a primary export (ie. natural resources)export (ie. natural resources) Political instability and Political instability and non-responsive non-responsive governmentsgovernments Denial of political and Denial of political and civil rightscivil rights Militarization and smallMilitarization and small arms proliferationarms proliferation Ethnic dominanceEthnic dominance Conflicts in neighbouring Conflicts in neighbouring statesstates High male youth High male youth unemploymentunemployment Culture of violence, myth-Culture of violence, myth- making, public perceptions.making, public perceptions.

Building Social Cohesion/ Integration Building Social Cohesion/ Integration

Values, culture => intangible, not favoured by development aid (preferred Values, culture => intangible, not favoured by development aid (preferred investments, less sensitive). investments, less sensitive). Changing values, building social trust and cohesion is back in the development Changing values, building social trust and cohesion is back in the development agenda agenda Essential to fight discrimination (women, ethnic, caste, persons with disabilities…)Essential to fight discrimination (women, ethnic, caste, persons with disabilities…) Tolerance, respect for diversity, non-violence, solidarity, trust in society, Tolerance, respect for diversity, non-violence, solidarity, trust in society, contribution to the community, are beliefs and behaviours that can be taught.contribution to the community, are beliefs and behaviours that can be taught.

Tackling Prejudice and Building Social Trust:Tackling Prejudice and Building Social Trust:1.1. Understand the existing cultural values. Understand the existing cultural values.2.2. Have clear objectives on the values that need to be altered for social Have clear objectives on the values that need to be altered for social progress.progress.3.3. Gain support from the local structures including religious leaders; a Gain support from the local structures including religious leaders; a technique is providing solid scientific evidence of the benefits from other technique is providing solid scientific evidence of the benefits from other countries, putting aside emotions and value judgments. countries, putting aside emotions and value judgments. 4.4. Support allies and “drivers of change”; encourage local level groups and Support allies and “drivers of change”; encourage local level groups and organizations in dialogue.organizations in dialogue.5.5. Design adequate programs such as: Design adequate programs such as: Multicultural educationMulticultural education Media programsMedia programs Public information campaignsPublic information campaigns Investing in popular culture (above all, avoiding myth-making)Investing in popular culture (above all, avoiding myth-making) Empowering people and supporting associationsEmpowering people and supporting associations

Empowerment and Social MobilizationEmpowerment and Social Mobilization Organizing excluded groups to fight for their rights:Organizing excluded groups to fight for their rights: social development social development

would not have happened in most countries without the fight of unions and would not have happened in most countries without the fight of unions and civil rights groupscivil rights groups

Empowering people and promoting associations: Empowering people and promoting associations: Excluded people tend to internalize inferiority and repress their voice, Excluded people tend to internalize inferiority and repress their voice,

may lead to violent conflictmay lead to violent conflict When people associate and share their problems, the result is often When people associate and share their problems, the result is often

increased encouragement, capacity for self-advocacy, ability to increased encouragement, capacity for self-advocacy, ability to organize, to create positive change for their communities. organize, to create positive change for their communities.

Associations help communities to defend their interests, and can be Associations help communities to defend their interests, and can be linked to microfinance, cooperatives and other local development linked to microfinance, cooperatives and other local development programmes.programmes.

As people's associations sometimes stand up against powerful local As people's associations sometimes stand up against powerful local interest groups, need to protect them from extortion and intimidation.interest groups, need to protect them from extortion and intimidation.

Not only local level: Not only local level: National Economic and Social CouncilsNational Economic and Social Councils good good practice to practice to institutionalize participation of representative stakeholders in institutionalize participation of representative stakeholders in a society to: a society to: monitor public policies, assessing social impacts monitor public policies, assessing social impacts provide alternative proposals for employment-generating economic growth provide alternative proposals for employment-generating economic growth

and social justiceand social justice Empowerment and social mobilization are intrinsically linked to the broader Empowerment and social mobilization are intrinsically linked to the broader

agenda of good governance. agenda of good governance.

Are Social Policies Affordable?Are Social Policies Affordable? Social Ministries suffer from “second class” stigma, need to secure budgetary Social Ministries suffer from “second class” stigma, need to secure budgetary

allocationsallocations Often expenditures for poverty reduction and social policy are declined (“cannot be Often expenditures for poverty reduction and social policy are declined (“cannot be

afforded”) because of:afforded”) because of: a loss in potential investment/GDP due to a supposed equity/ efficiency trade-a loss in potential investment/GDP due to a supposed equity/ efficiency trade-

off, andoff, and the assumption that large social needs will create unmanageable fiscal deficitsthe assumption that large social needs will create unmanageable fiscal deficits

Counterarguments: Counterarguments: Social development not a cost but an important investment.Social development not a cost but an important investment. Investing in people enhances their productivity and thus growth;Investing in people enhances their productivity and thus growth; raising the raising the

incomes of the poor encourages domestic demand therefore growth.incomes of the poor encourages domestic demand therefore growth. A significant proportion of national budgets is spent on non-productive A significant proportion of national budgets is spent on non-productive

activities, such as the military, or activities with very low returns. => activities, such as the military, or activities with very low returns. => Public Public Expenditure ReviewsExpenditure Reviews good tools to bring transparency. good tools to bring transparency.

Ultimately, affordability depends on a society’s willingness to finance social Ultimately, affordability depends on a society’s willingness to finance social policies through taxes and contributions. Affordability is at the core of the policies through taxes and contributions. Affordability is at the core of the social contract between governments and citizens: how much a society is social contract between governments and citizens: how much a society is willing to redistribute, and how. willing to redistribute, and how.

Countries at the same level of economic development differ significantly in Countries at the same level of economic development differ significantly in their social spending – OECD countries spend between 15-35%GDP on health, their social spending – OECD countries spend between 15-35%GDP on health, education and social protection alone (compare to 4% in S. Asia)education and social protection alone (compare to 4% in S. Asia)

In developing countries, social policies have to grow with the fiscal space In developing countries, social policies have to grow with the fiscal space made available by increasing GDP or aid.made available by increasing GDP or aid.

Global and Regional Social PoliciesGlobal and Regional Social Policies Urgent need for global social policies, to counterbalance economic globalization Urgent need for global social policies, to counterbalance economic globalization

=> but difficult agreements. Regional social policies are an easier form of => but difficult agreements. Regional social policies are an easier form of transnational social policytransnational social policy

Examples of regional social policies:Examples of regional social policies: Regional social redistribution mechanismsRegional social redistribution mechanisms e.g. to target depressed areas or e.g. to target depressed areas or

to redress inequalities. to redress inequalities. Regional regulations e.g.Regional regulations e.g. regulation of private social services and utilities regulation of private social services and utilities

(water, electricity); regional formations are in a stronger position to negotiate (water, electricity); regional formations are in a stronger position to negotiate with private providers to ensure access, affordability and quality standards.with private providers to ensure access, affordability and quality standards.

Regional mechanisms that give citizens a voice to challenge rights abuse: Regional mechanisms that give citizens a voice to challenge rights abuse: e.g. te.g. the EU’s European Court of Justice or the Council of Europe’s Court of he EU’s European Court of Justice or the Council of Europe’s Court of Human Rights Human Rights

Regional cross-border investments aRegional cross-border investments addressing different social policy ddressing different social policy common priorities, for instance, the production of cheaper generic common priorities, for instance, the production of cheaper generic pharmaceuticals at regional level to benefit from economies of scale, or pharmaceuticals at regional level to benefit from economies of scale, or common programs to avoidcommon programs to avoid cross-border spread of diseases (e.g. malaria, cross-border spread of diseases (e.g. malaria, SARS, avian flu)SARS, avian flu)

Regional technical co-operation in social policyRegional technical co-operation in social policy

Financing: Global and regional fundsFinancing: Global and regional funds

Examples: - ALBA, the Examples: - ALBA, the Latinamerican Bolivarian Latinamerican Bolivarian Alternative for the Americas 2007Alternative for the Americas 2007- Southern Africa SADC Regional - Southern Africa SADC Regional

Social Policy 2006Social Policy 2006

2002 Monterrey; 2005 World Summit: donors recommit increased aid to 2002 Monterrey; 2005 World Summit: donors recommit increased aid to

support Millennium Development Goalssupport Millennium Development Goals = > Supporting committed governments with equitable National = > Supporting committed governments with equitable National

Development Strategies with increased aid, aligned and harmonized, Development Strategies with increased aid, aligned and harmonized, particularly with general budget supportparticularly with general budget support (GBS), moving away from (GBS), moving away from projects.projects.

CRITICAL ISSUES:CRITICAL ISSUES: It is essential that It is essential that new instruments of aid like SWAps and GBSnew instruments of aid like SWAps and GBS be used as instruments be used as instruments

of redistribution and social justice, this is, that they reach people, and are not utilized to of redistribution and social justice, this is, that they reach people, and are not utilized to sustain institutions (e.g. a Ministry) or development processes (e.g. completion of an sustain institutions (e.g. a Ministry) or development processes (e.g. completion of an MTEF), or are simply used as fast disbursing mechanisms of donors aid. MTEF), or are simply used as fast disbursing mechanisms of donors aid.

Some GBS donors like the European Union believe in linking disbursements to Some GBS donors like the European Union believe in linking disbursements to outcomesoutcomes – this could include attainments in respect of effective impacts on excluded – this could include attainments in respect of effective impacts on excluded groups.groups.

Social transfers (e.g. social pensions) become particularly attractive from the point of Social transfers (e.g. social pensions) become particularly attractive from the point of view of direct and quick impacts on low-income households; governments can finance view of direct and quick impacts on low-income households; governments can finance social transfers through both GBS and SWAps.social transfers through both GBS and SWAps.

Civil society activities at the national and local levels must be expanded, funded Civil society activities at the national and local levels must be expanded, funded through special funds.through special funds.

International Redistribution and Social JusticeInternational Redistribution and Social Justice

Thank youThank you

United Nations Department for Economic United Nations Department for Economic and Social Affairsand Social Affairs

http://www.un.org/esa/http://www.un.org/esa/

Email: ortizi@un.orgEmail: ortizi@un.org