Opening Remarks

 

Workshop

Developing a model of the Rate of Return in the context of Thailand

Friday 14 September 2012

At Asia hotel, Bangkok

 

Opening remarks, Valerie Schmitt, Social security specialist ILO DWT Bangkok.

Dear ladies and gentlemen, dear colleagues and friends,

I am happy and honoured to open this high level workshop which is attended by so many eminent professors and guests. I would like to thank HISRO, and particularly Dr Thaworn and his team for taking the lead in the organization of the workshop.

Social security is a human right

The Social protection floor recommendation which was adopted unanimously  by ILO’s constituents at the international labour conference in June 2012 reaffirms the right to all members of society to enjoy at least a minimum levels of social transfers and services.

The social protection floor aims at a situation where

i)                    All residents have access to affordable essential health care, including maternity care;

ii)                   All children receive basic income security providing access to nutrition, education, care and any other necessary goods and services;

iii)                 All persons in active age who are unable to earn sufficient income, in particular in cases of sickness, unemployment, maternity and disability, receive basic income security and

iv)                 All residents in old age receive basic income security (through pensions or transfers in kind).

In Asia, many countries have started extending social security through both contributory and non-contributory schemes. China, Thailand, Indonesia, India to cite only a few.

However the right to social security is in many cases not well understood.

I was this week in Indonesia, where a number of antipoverty programmes targeted to the poor have been established. These programmes are most of the time ad hoc, temporary, not systemic. They do not constitute a social protection floor as such which would be guaranteed for all and on which the rest of the social security house would rely on.

This is why we have to continue explaining the difference between the concepts of safety nets, anti-poverty interventions and the social protection floor; we have to continue our advocacy work for a more rights based approach to social security.

Supporting the expansion of social security coverage

When supporting the expansion of social security coverage in a country, we usually start by conducting an assessment based national dialogue exercise, which provides a description of social security interventions and anti-poverty programmes, compares the situation with the basic requirements of the social protection floor, and tries to identify some gaps in the system. The recommendations may consist of (i) increasing the coverage of existing schemes targeted to the poor and the vulnerable, (ii) implementing universal basic social protection benefits or contributory schemes, (iii) improving the management and efficiency of the social security system as a whole.

We also calculate the cost of introducing new social protection floor provisions and express this cost in percentage of government expenditure and revenues, as well as percentage of GDP. As you know we are in the process of finalizing the assessment for Thailand and we plan a big launch before the end of this year.

The next step should be to conduct a proper fiscal space analysis, to show to what extend these social protection provisions can be funded from the government budget as it is, or to recommend budget reallocations or tax reforms in order to increase, if needed the fiscal space.

However by doing all this technical work, we forget one thing; one crucial thing.

The government may not be willing, even though the fiscal space is available, to invest more in social protection.

Investing in social protection is a necessity for all those who are convinced that social security is a human right and a basic entitlement. But this may not be understood by everyone.

And here comes the economic argument

Social protection is not only a human right but it is also a set of measures which contribute to the reduction of poverty, and therefore the development of a domestic demand which is good for growth.

By facilitating access to health care and education, it also contributes to the development of the human capital, and therefore the capacity of the people to become more employable and more productive.

Through its protective role, it relieves the poor and vulnerable from many vicious cycles, they can thanks to social protection plan for their future, and the future of their children.

All this is good for economic growth in the short term and the longer term.

This is the productivist model of Asia, where “welfare provision is a means to the end (i.e. objective) of economic progress, not the other way round”.

But how can we prove that social protection will contribute to economic development? That social protection is an investment and that there is a return on investment?

This is where Franzizska Gassman comes in.

When I mentioned to Dr Thaworn that Franzizska Gassman from the University of Maastricht would be in the region in September to present her rate of return model in Cambodia, it was clear to us that we should do anything possible to have her here with us as well, so that she can present her model and discuss with us possible adaptation to the Thailand’s system.

The workshop of today has therefore two objectives:

(1)    Understand the model developed by Franzizska and her team of the University of Maastricht, School of Governance

(2)    Discuss the relevance of this model for Thailand and its possible adaptation

Thank you so much for your attention.

Franzizska and Dr Thaworn the floor is yours.