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Social Cash Transfer as a Tool for Social Protection Eduardo Klien HelpAge International Social Protection Floor Initiative Hong Kong, June 2010 Outline • Why are Social Cash Transfers (SCT) important? • Indications of impact • What triggers decision-makers in adapting SCT? Why are they important in the scope of the SPF-I? • Social fairness • • Inequalities create instability • China’s commitment to social harmony implies redistribution of wealth. SCT is a way Economic reasoning • Direct contribution to growth and development of local markets • Healthier and more educated workforce • Political common-sense • Design of schemes needs to consider political support • Universal approaches gain more support and are less vulnerable to corruption Evidence of measurable improvement • Education - Enrolment & attendance duration in Mexico, Brazil, Nicaragua, Zambia, Bangladesh • Health & Nutrition - Increase in height, weight and improvement in nutrition in Colombia, Chile, Malawi, South Africa Evidence in poverty reduction South Africa Social Transfers Source: UNDESA, 2009 One type of SCT: Social Pensions • The challenge of ageing • 350 million older people lack income security • In Asia only 1 out of 5 reach old age with some formal pension Trends in Ageing Dynamic pyramids, change every 5 years Japan Bangladesh South Africa Ageing • 700 billion by 2050 in Asia (50% of total) • Growth of older old - 1 out of 2 Japanese born today will live up to 100 years • Feminisation of old age - 67 men for every 100 women in developing countries • Poverty in old age - Generally larger proportion than non-olds. More vulnerable How are Social Pensions distributed? Brazil Food Health Utilities & Fuel Other household Gifts & savings Transport Source: UNDESA, 2009 How are Social Pensions distributed? Zambia Food Animals Source: UNDESA, 2009 Clothes Agriculture School Other Are Social Pensions affordable? • Nepal – less than 1% of GDP • Vietnam – 0.12% of GDP • Thailand – 0.5% of GDP • Zambia – Pilot in Kolomo – if expanded it would cost 0.5% GNI Key determinant Political will Political will Political will Political will Social Pensions in the last 3 years (In Asia) • Philippines – Approval of a means-tested pension scheme for 1.7 million • Vietnam – Reduction of age of entry to 80 years and increase in the amount (200%) – Decree 67 • Nepal – Reduction of age of entry from 75 to 70 years and increase in amount • Thailand – Increase in coverage from 1.8 to 5.4 million older people What triggers decision-makers? Governments are the decision-makers • Motivations vary: • Understanding of social pensions as a tool for development • Political pressure depending on contexts • political opportunity • Commitment to fairness It helps: • Research on specific contexts • Building capacities • Targeted processes, mainly at government levels • Necessary involvement of Ministries of Finance, Planning and Social welfare. • Not prescriptive training but building and understanding of options mechanisms Involving civil society • As a force to support and influence • Cannot work isolated from governments • • • • • Evidence of positive impact helps decision making Building scenarios of affordability through microsimulation can dissipate fears of insolvency • Voice of rights, depending on contexts Use of the media • • • To expand social acceptance and social pressure To share experiences form elsewhere To provide a voice form the demand side Building Alliances • Networks, academics, sectors within government, political parties Thank You