Social protection in Asia improving, but reforms still needed — ADB

MANILA, Philippines — Social protection systems in Asia are showing gains in coverage and adaption of new technology for delivery of service, but still needs improvement to shield workers from inflation and rise of new occupations, said the Asian Development Bank (ADB).

In an entry on the Asian Development Blog yesterday, Sri Wening Handayani, ADB’s principal social development specialist for sustainable development and climate change department, also noted that the Philippines is improving on its social security environment.

Handayani said special attention must be placed on ensuring the adequacy of benefits as adjusted to inflation and expanding social insurance schemes to cover the so-called non-standard employees (NSE) such as those working as freelancers in the digital economy.

“When the benefits of pension, health insurance and welfare assistance are insufficient and have never been adjusted to inflation, this creates economic insecurity, particularly for poor and vulnerable groups such as women-led households, people with disabilities, migrant workers and ethnic minorities,” she said.

Expanding social insurance schemes would also allow for the coverage of NSEs and reduce the financial burden on the state in providing social assistance for non-contributors.

Non-contributory social protection schemes such as conditional/unconditional cash transfers, old-age social pension, and disability benefits that are financed by general taxation should also be designed with sustainability in mind especially now that the number of retirees in the region are expected to triple in three decades and seniors are living up to 25 years after retirement at 60.

“While there is still room to expand social protection programs to increase coverage, the key challenge is designing a sustainable financing mechanism, including addressing the fiscal space. The good news from ADB’s analysis of 16 countries indicates that all, even the poorest ones, have fiscal space for more and better social protection,” said Handayani.

Citing a 2017 study by the International Labor Organization, she said some options to expand fiscal space are increasing tax revenue, boosting social insurance contributions, and reallocating public expenditures, among others.

Handayani noted that fiscal and tax reforms are currently ongoing in Indonesia and the Philippines.

She also urged countries in the region to harness new technology such as digital platforms and mobile services to improve the delivery of social protection. This is seen to benefit NSEs who are challenged with having multiple jobs and occasional unemployment.

Governments, she said, could leverage the expertise of the private sector in implementing this.

“The good news is many countries in Asia have already implemented innovative policy solutions to address those challenges,” said Handayani. “Several countries have opened up their regulatory frameworks to include NSE workers in contributory schemes.”

She noted for instance, Indonesia, China, and Thailand have adopted adaptive universal health coverage with cross-subsidies for the poor and vulnerable. Similarly, Bangladesh, Myanmar, Mongolia, and the Philippines have expanded the coverage for child benefits through cash transfers. Nepal, Sri Lanka, Thailand, and Vietnam, meanwhile, are boosting old-age social pensions.