Social security – Foundation for development

Published: 12 January 2011


A long underestimated issue this time found its way on top of the agenda of the European Development Days (EDD) in Brussels. New, however, was the tendency to directly address the respective governments, rather than covering the shortcomings of the social security systems trough parallel acting NGOs.

In the context of humanitarian assistance, many NGOs have been providing social protection especially for parts of societies suffering poverty, above all in areas of health care, in which the governments themselves so far don’t offer any benefits. However, many institutions in developing and emerging countries go beyond humanitarian aid and even compete with the governmental policies. In addition, these tasks are performed by a variety of NGOs that operate in large part in total absence of any coordination among them. Prof. Paulo Buss, Brazilian representative at the WHO's Executive Board (2008-2011) and Director of the Oswaldo Cruz Foundation, Center for Global Health, called therefore at the EDD for more cooperation during the event.

Social Security is not just since 1984 declared a human right, but also has direct consequences on the development potential of a state. Social security systems are a safety net against risks such as illness, job loss or age poverty. In the case of risk occurrence, people are under direct threat of falling into poverty, or it gets more difficult for them to escape poverty, if they have no social insurance.This is primarily due to costs incurred directly by the risk event, such as the costs for treatment of diseases, and those costs that are indirectly related to risk occurrence. For instance the loss of income due to illness of informal workers without sickness benefits or the possibility of loosing their employment is often linked with the need for children as workers, rather than attending school, and thus enabling development for the next generation.

Meanwhile, the recognition that serious health problems in poorer regions may pose a potential risk to global stability and security, gains increasing attention. In addition the awareness that the lack of social protection also has direct economic consequences is increasing as an argument in countries where social security has largely been missing. The performance of an economy is determined by its existential human resources. These, however, may put their working potential at risk in case of an occurrence, such as a disease, so that the gross domestic product of a country is directly affected in a negative way. This effect multiplies, if large parts of the population in working age are affected, such as often seen in countries affected by high numbers of people suffering from Aids.

The term ownership was emphasized within the panel "Creating Global Health - A Policy worth of the Name" by Andris Piebalgs, European commissioner for development. The concept focuses on passing more responsibility to the target countries. Piebals said therefore, the governments would have to define their own health policies and design systems according to their needs. Besides the external support, that Piebalgs sees guaranteed, this means that substantial efforts to mobilize national resources will have to be made. Even if the donor countries reach the MDG target of 0.7% of their gross national income for development issues, additional funding would be needed to provide a working health care system in many countries. In consequence this implies, that tax revenues must rise. Especially poor countries need to widen tax-financed health care systems that support the poor. These are the most exposed to risks and do mostly not have the means to pay for insurance. Higher tax revenues can therefore only be achieved through reforms of the tax systems. This includes a wider approach of development strategies, moving away from the traditional project-orientation to a horizontal health policy agenda.

In addition another point that was raised during the EDD: A country can only obtain the necessary resources for sustainable social politics if it has the opportunity to earn it. This also includes opportunities to participate in world trade. The EU itself is often criticized for its market-distorting policies of agricultural subsidies. The subsidies are given to producers in Europe and lead to the result that the providers from other parts of the world like Africa or Latin America cannot compete with the subsidized and therefore artificially cheaper, products. The Brazilian Professor Armando de Negri Filho, member of the World Social Forum on Health and Social Security's executive committee, added the fact that the competition on the world market leads to the need to lower employment costs. This often causes informal or semi-informal working schemes, which exclude the employers themselves and their families from social security systems. Therefore he recommended taming the markets for the benefit of social security.

The 2010/2011 edition of the European Report on Development, which was launched during the conference, focused as well on social security. The report highlights social protection as a significant historical contribution to poverty eradication and development in Europe. Especially in times of shocks from fuel, food or the recent financial crises, social security systems can reduce vulnerability and promote inclusive development in those economies that are actually progressing.

How to respond to demands for a more comprehensive approach in the future depends on the one hand on what concessions the donor nations are willing to make in terms of financial support and in the coordination of the global market. On the other hand, the receiving countries must take over more ownership and may have to proceed some painful, and often not popular, reforms. Global Health Governance will have to be revised essentially, including actors from spheres like the WTO, that formally are not treading health issues. As a human right, and even more, as a chance to development, social security should be put on top of the agenda for it is a key issue for ending poverty eventually.