Pandemic highlights need for robust social protection systems
Many experts deem the ongoing coronavirus pandemic to be the worst global crisis since the Second World War. Lockdown measures have resulted in massive job losses and income reductions, leaving millions of people in precarious situations. The World Bank has stated that, during the nine months following the onset of the pandemic, a total of 215 countries delivered 1,414 social protection measures to an estimated 1.28 billion people, or 16 percent of the global population. Data from 126 countries reveals that a total of more than $800 billion has been invested in these response efforts.
The pandemic’s devastating social and economic impacts have brought into focus the shortcomings of social protection systems during emergencies. Many factors are exacerbating these problems worldwide, such as reduced fiscal leverage due to declining government revenues, the universality of the crisis affecting a large segment of the population, limited social mobility policies, and the prolonged, uncertain duration of the pandemic. UN Secretary-General Antonio Guterres in December said that “the pandemic brings new awareness of the social and economic risks that arise from inadequate social protection systems.” It is important to note that those countries with existing strong protection systems have been better positioned to support their populations during this calamity.
Social protection is a universal human right. There is no doubt that a nation’s most precious resource is its human capital. Therefore, it is considered a moral and public duty to support vulnerable groups at different life stages or in precarious circumstances, ensuring they are not in poverty and are able to lead happy, productive lives.
Social protection systems can deliver a spectrum of benefits, such as reducing poverty, strengthening food security, improving education outcomes, enhancing health, improving relationships, reducing inequality, and promoting social cohesion and inclusion. They also aim to boost economic productivity, reduce government expenditure on various support services, and improve state-citizen trust.
They usually include a suite of offerings, such as cash transfers, government fee waivers, utility support, health coverage, and in-kind benefits to support households that need to cope with losses, emergencies, an inability to work, and vulnerabilities. Global lockdowns have also forced governments to offer wage subsidies, unemployment benefits, paid sick leave, and childcare vouchers to make up for lost income and employment.
Reimagining and modernizing social protection systems should be a national priority for governments in order to protect vulnerable populations and safeguard years of economic and social progress. Perhaps the most important aspect of any social protection system is its financial sustainability. In an effort to achieve this important condition, many governments have established dedicated funds that yield positive yearly returns through a portfolio of investment strategies.
For example, Singapore’s Community Care Endowment Fund (ComCare) was established as a sustainable funding source to support low-income Singaporeans. What started with $250 million of capital, along with periodical top-ups, is currently valued at $1.9 billion. In 2019, the fund financed a variety of social assistance programs worth $69 million, or about 45 percent of the ComCare program’s budget.
Similarly, the Canada Pension Plan Investment Board is a Canadian crown corporation established with a mandate of maximizing long-term investment returns from workers’ pension contributions. The fund is currently worth $475.7 billion and is projected to surpass $1 trillion by 2032. Over the past 10 years, it has achieved a net rate of return of 9.9 percent and is regarded as a successful model on retirement security.
In addition to establishing funds, it is also vital to engage the private sector, philanthropists and civil society with different causes. We have witnessed during this pandemic their extraordinary efforts and contributions to alleviating people’s suffering. Support has included cash or product donations, grants, in-kind services, food vouchers, scholarships, and volunteering efforts.
Program planners can utilize the power of digital technologies to design agile social protection systems that provide rapid relief during emergencies. Many governments have benefited from this to design simple online application processes, dispense cashless payments through electronic banking, and keep an electronic register of all beneficiaries in order to coordinate relief efforts with other government agencies. As a result, responses are quicker, less costly and safer than in-person transactions.
It is also important for policymakers to work on pre-emptive policies that increase social mobility across different life stages. There are a number of interventions that support vulnerable communities, such as offering universal health coverage, housing grants, child care allowances and subsidies, educational scholarships, fee waivers for certain public services, and food vouchers. Family-friendly policies that enable parents to work and care for their children, such as flexible working arrangements, part-time employment, paid sick leave and generous parental leaves, are also vital. Furthermore, various types of awareness programs will ensure vulnerable communities adopt positive behaviors and make decisions that improve their lives, such as financial literacy skills and healthy lifestyle habits.
If anything, history has taught us that crises are windows of opportunity for improvement. By designing social protection systems that are resilient in the face of emergencies and able to universally cater to vulnerable populations, we can safeguard decades of progress.
Published in Arab News.
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