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Social protection critical to end economic crisis

Feb 21, 2010

The Asia Pacific MDG Progress Report calls for strengthening social protection and re-thinking of the prevailing growth model in light of the global economic crises. Governments are urged to reorient their development policy framework to place the poor and the vulnerable first for accelerated achievement of MDGs.

Manila: Achieving the Millennium Development Goals in an Era of Global Uncertainty: Asia-Pacific Regional Report 2009/10, estimates that the global economic crisis could trap an additional 21 million people on incomes of less than $1.25 a day.

The report, produced and launched jointly by the Asian Development Bank (ADB), the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), and the United Nations Development Programme (UNDP), assesses the impact of the recent financial and economic crises on the MDG progress in the region. Prior to the crises, the region had been making steady progress in a number of areas, including halving the proportion of people living below the $1.25-a-day poverty line, reducing gender disparities in education, and arresting the spread of HIV/AIDS and tuberculosis. However, these impressive gains have been threatened by the recent crises.

Speaking at the launch of the report in Manila, Minar Pimple, Regional Director, Asia and Pacific, UN Millennium Campaign said, “The economic and financial crisis has veered the MDG progress off track. We must look at this challenge as an opportunity to bring about long lasting policy corrections – social protection being one of them.”

While the crises have exposed the vulnerabilities of the Asia-Pacific region which is connected to the global economy through multiple channels, including trade, tourism, Foreign Direct Investment (FDI), Official Development Assistance (ODA) and remittances, they also present an opportunity to address those vulnerabilities and identify a more sustainable growth path conducive to the achievement of the MDGs. Examining the fiscal impact of the crisis, the report also advocates biasing stimulus packages towards the MDGs with a strong component of social expenditures, as this will likely produce a double dividend of not only boosting growth more rapidly but also aiding progress towards the MDGs.

At the same time, in order to be more resilient under the impact of globalisation, the countries must strengthen their social protection systems. This would include employment guarantee, old age pension, health insurance, education and health related social assistance, especially for women and children.

From the pro-poor perspective, it is a significant step forward that social protection is now finally getting the attention that it deserves and that the critical role it plays in achieving the MDGs is recognised. Asia-Pacific countries already have various forms of social protection, but these usually reach only a small proportion of the workforce.

For example, only 20% of the unemployed and underemployed across the region have access to labour market programmes such as unemployment benefits, training or public works programmes. Only 30% of older people receive pensions. Expenditure on social protection in most Asia-Pacific countries also tends to be small relative to GDP.

The reports also highlights that women are the most adversely affected by the crises, as they compose the majority of the region’s low-skilled, low-salaried, and temporary workforce that can easily be laid off during economic downturns. Moreover, the current global economic crisis has reduced the demand for migrant labour – and women form nearly two-thirds of the total Asian migrant population.

The UN Millennium Campaign echoes the importance of challenging the existing export-led growth model which has excluded many from the fruits of development and thus has contributed to widening disparities in many countries in the region. Although Asia-Pacific has been experiencing a rapid urbanisation, it must be noted that more than half of the population still live in the rural areas, many of whom rely on subsistence agriculture.

With less than six years left before the 2015 deadline to achieve the MDGs, the global economic crisis is a wake-up call for all the countries that the existing development model needs to be fundamentally reviewed. Bouncing back strongly from the impact of the crisis and accelerating the speed of poverty reduction and human development can be possible, only by supporting the governments in re-orienting their policy framework and directing their resources as well as political will towards more balanced, sustainable and equitable development.

This, in turn, calls for active citizen engagement in monitoring the implementation of such policies and keeping the government accountable for delivering on their commitment.

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