17 November 2014: A policy paper from the International Labour Organization (ILO) finds that high-income countries have reduced social protection benefits in the past five years, while many developing countries are expanding social services.

‘Social protection global policy trends 2010-2015: From fiscal consolidation to expanding social protection: Key to crisis recovery, inclusive development and social justice’ reviews global trends in social protection. It reports that, in the first phase of the global financial crisis, from 2008-2009, fiscal stimulus packages in rich countries included a large allocation for social protection purposes. However, in 2010, many governments embarked on “fiscal consolidation” measures that amounted to reducing social protection benefits and limiting access to public services. The authors observe that the contraction in social protection, coupled with persistent unemployment, lower wages and higher taxes, has resulted in increased levels of poverty, inequality and social exclusion in many rich countries.

In the case of developing countries, the authors find that while many adopted measures that adversely affected the poor, such as eliminating or reducing food and fuel subsidies, middle-income countries have been “boldly expanding” their social protection systems. China has achieved near-universal coverage of pensions, while Brazil is increasing its social protection coverage and implementing minimum wages. Others to put in place universal pensions include Bolivia, Botswana, Maldives, Namibia, Panama, South Africa, Swaziland and Timor-Leste.

In the case of many lower-income countries, the authors note that social dialogue is taking place on building social protection floors, and that even in the poorest countries options are available for extending social protection systems. The report outlines a range of options besides tax increases whereby countries may raise revenue or reallocate funds to meet social protection aims, including: extending social security contributions: borrowing or restructuring existing debt; curtailing illicit financial flows (IFFs); and drawing on fiscal and central bank foreign exchange reserves.

The authors argue that social protection measures help maintain household income, and thus domestic consumption and economic growth. They conclude that social protection floors continue to be essential for recovery from the world financial crisis, as well as being a necessary ingredient for inclusive development and social justice. [Publication: Social Protection Global Policy Trends 2010-2015] [Report Webpage] [UN Press Release]