Welcome to the webinar

Transcription

1 Welcome to the webinar Changes in the provision of social protection in MENA since the Arab uprisings organised by International Policy Centre for Inclusive Growth and UNICEF Middle East and North Africa Regional Office

2 socialprotection.org presents: Changes in the provision of social protection in MENA since the Arab uprisings Panellists: Rana Jawad, University of Bath Markus Loewe, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) Moderator: Charlotte Bilo, International Policy Centre for Inclusive Growth (IPC-IG)

3 Submit your questions to the panellists Simply type them in the

4 Changes in the provision of social protection in MENA since the Arab uprisings Moderator Charlotte Bilo International Policy Centre for Inclusive Growth (IPC-IG) Charlotte Bilo works as a researcher at the International Policy Centre for Inclusive Growth (IPC-IG). She holds a Master s Degree in Poverty and Development from the Institute of Development Studies (IDS), Brighton, UK and a Bachelor s Degree in Political Science from the University College Maastricht, Netherlands. At the IPC-IG Charlotte is currently working on a research project in partnership with UNICEF MENARO on child-sensitive social protection in the Middle East and North Africa region. Before joining the IPC-IG in September 2016, she worked as a research assistant for the Centre for Social Protection (CSP) at IDS as well as for the German Development Cooperation (GIZ) in Brazil and the Ministry for National Planning and Economic Policy (MIDEPLAN) in Costa Rica. Charlotte s main research interest lies in the area of gender, children and social policies.

5 Changes in the provision of social protection in MENA since the Arab uprisings Panellist Rana Jawad Senior Lecturer in Social Policy, University of Bath Rana Jawad is a senior lecturer in social policy at the University Bath. She is founder and convener of the MENA social policy network. She has extensive research expertise on social policy issues in the MENA region focusing in particular on the institutional and political analysis of social policy provision. In addition, she has an interest in social care, social safety nets and the role of religious welfare organisations. See below for further information please. Staff webpage MENA social policy network

6 Changes in the provision of social protection in MENA since the Arab uprisings Panellist Markus Loewe German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) Markus Loewe is research team leader at the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Bonn, where he has been working since He studied economics, political science and Arabic in Tübingen, Erlangen and Damascus and wrote his PhD-thesis on micro-insurance schemes in Heidelberg. In 2015, he declined the offer of a chair in economics at the University of Erlangen-Nuremberg. His main areas of interest include social protection, poverty reduction, MDGs and the promotion of small and medium enterprises in developing countries. In addition, he has also published on demographic development, inclusive, pro-poor growth, anti-corruption policies, investment promotion, industrial policies and the impact of the recent global financial and economic crisis. His regional focus is the Middle East and North Africa region.

7 About today s webinar This webinar is part of a series of webinars with experts on Social Protection in the Middle East and North Africa, jointly organized by the International Policy Centre for Inclusive Growth (IPC-IG) and UNICEF Middle East and North Africa Regional Office (MENARO). In 2017, the IPC-IG and UNICEF MENARO partnered to enhance the production of knowledge in the field of social protection in MENA. Please join the Online Community Social Protection in MENA if you are interested in following the most recent discussions on the topic and finding out more about upcoming webinars.

8 Knowledge Products Overview of Non-contributory Social Protection Programmes in MENA from a Child and Equity Lens Regional Overview and Coverage Estimation 20 Country Profiles (also available as One Pagers in Arabic, English, French and Portuguese) Over 100 Programme Profiles (also on socialprotection.org) Webinar presented in November 2017 Forthcoming studies and webinars: Public Financing for Child-sensitive Social Protection in MENA Social Protection Legislative Frameworks in MENA from a Child Rights Perspective Building Shock-resistant National Social Protection Systems

9 Policy in Focus Social Protection after the Arab Spring 17 articles from leading scholars, researchers and practitioners about the state of social protection in the MENA region as a whole as well as in specific countries, exploring amongst other how countries in the region have been coping with and learning from recent economic and humanitarian crises. Available in English, French and Arabic (upcoming).

10 Is there a new politics of entitlement in the Middle East and North Africa which makes social protection more solidary? (Towards a more critical socio-political analysis of social protection policies in low and middle income countries) Rana Jawad, University of Bath (UK) R.Jawad@bath.ac.uk 11 June 2018

11 Introduction What are the analytical boundaries of Social protection (SP)? A social policy turn in ID? refocus on inequality; SP systems vs. targeted povertyreduction programmes; ILO/World Bank commitment to universal social protection Two areas of work: (1) use of social policy analysis to distinguish between a historical moment in LMI countries; (2) an operational modification in service delivery Empirical question: late arrival to the MENA region due to the Arab spring; Syrian refugee crisis; rising budget deficits: business as usual? Claims of a paradigm shift or universal social protection are not matched by a continuing focus on vulnerable social groups (orphans, elderly, women); targeted cash transfer programmes or compulsory health insurance provided by private insurance companies

12 Conceptual Framework: Social Protection as a Window to Critical Social Policy Analysis Not just the technical analysis of policy problems Social and political analysis of the policy communities that determine public policy: we are governed through problematization, not policy making (Bacchi, 2017) Focus here: Policy framing

13 Breadth of Social Protection Debates in the North

14 Social Protection and Social Policy in the Global North Tanzi (2005): social protection, in its complete understanding comprises of public expenditure, taxation and social regulation A European invention: Workmen s Compensation for Norwegian Miners, enacted in 1842 for the protection of miners; Bismarck s national insurance system in Germany; followed by later adaptions such as the New Deal introduced in the 1930s in the United States by President Roosevelt, or the welfare program introduced by Juan Perón in Argentina after 1945 These were all state-financed and managed programmes

15 Eight Crises of Social Protection (Standing, 2010) Linguistic crisis: social safety nets and active labour market policy Fiscal crisis: higher unemployed and more flexible employment, rising need for income transfers, as well as ageing population Legitimation crisis: declining social solidarity.. Fortune and misfortune has affected the various social strata leading to detachment Moral crisis: moral hazard and adverse selection Social dumping crisis: cuts in welfare spending are justified in order to increase competitiveness Governance crisis: social solidarity; oligarchy of private providers of services; rush to selectivity (benefits specifically for the poor will be poor benefits) Work crisis: what should count as gainful employment? Social justice crisis: social protection systems no longer offer the prospect of income security or poverty-reduction

16 Targeted Social Assistance/Safety Nets vs Universalist Social Protection (Standing, 2010): Social protection must not be about risk compensation but the expansion of citizenship rights, and in particular economic rights. Hence, targeting social protection at the poorest will reduce incentives and economic growth in the long run though superficially it might appear the fairest policy in the short term Mkwandire (2008) and Ghosh (2011): historical record in the Global North confirms the benefits of universal public services in reducing poverty levels; access to public services is crucial; need to avoid shorttermism of programmes focusing on cash transfers

17 Important Lessons from the Washington Consensus: Regulation and Institution Building Better understating of local institutions and in some cases the strengthening of institutional capacity are essential pre-requisites for the successful implementation of any policy reform in the Global South (Minogue, 2002) Anthropological research on the nature of the state (political corruption) in India, Nepal, Russia and China: Washington Consensus of the 1990s was doomed to fail due to the dominance of a narrow economistic view of social behaviour that failed to capture the way in which trust and shared values are constructed in local settings (Minogue, 2002)

18 Translation of the Social Protection Debate to the Global South

19 Frame 1: Social Risk Management repositions the traditional areas of Social Protection (labour market intervention, social insurance and social safety nets) in a framework that includes three strategies to deal with risk (prevention, mitigation and coping), three levels of formality of risk management (informal, market-based, public) and many actors (individuals, households, communities, NGOs, governments at various levels and international organizations) against the background of asymmetric information and different types of risk. This expanded view of Social Protection emphasizes the double role of risk management instruments: protecting basic livelihood as well as promoting risk taking.

20 Frame 2: Social Justice and Social Contracts Guhan (1994): 1.Promotion = enhances real income and capabilities; 2. Prevention = prevent deprivation through alleviation of poverty such as social insurance PLUS Transformative Social Protection = rights + needs + empowerment Address social justice concerns such as exploitation of workers or discrimination of ethnic minorities Social protection is much more than a service delivery sector the most progressive social protection interventions are underpinned by enforceable legislation, which transforms a charitable gesture into a justifiable right

21 Frame 3: ex ante institutionalisation of social protection (social assistance?) Kabeer (2014): Ascendance of neo-liberal paradigm reshaped social policy into more residual forms vs. institutionalised systems of social protection and social insurance for the poor Universalism and redistributive social policies are needed; this is firmly located in the sphere of politics and constituency-building and cannot be reduced to the case of poverty reduction based on moral precepts Kabeer (2014): Impact of Social Funds in India resources would be better spent on reform of public administration to provide most effective means of incorporating measures of inclusiveness, accountability and equity

22 In sum: parameters for analysis Discourse: public expenditures and social assistance Key policy actors: donors, states, limited mention of private and nongovernmental sectors; no mention of citizenship mobilisation Financing: reforms of subsidies to finance cash transfers; limited taxfinancing for social assistance; donor funding for targeted cash transfer programmes Types of programme: unconditional cash transfers as preferred approach

23 Applications in the MENA Context

24 MENA Social Policy Frameworks: State and NGO provision Non-contributory social safety nets + employment-based social insurance + needs satisfaction e.g one-off cash e.g pensions, unemployment e.g health, education assistance, food health insurance housing aid Low protection High protection High protection Short-term Long-term Long-term Individual basis Individual or universal basis Universal basis Treats: Prevents: Prevents: symptoms poverty poverty or effects of poverty

25 Arab Spring Aftermath: Persistent Logic of Social Assistance or Safety Nets 2011 Increased subsidies and in-cash social assistance (Iran, Jordan, Syria) Constitutional reform: Tunisia, Egypt Employment-based health insurance: Gulf countries Unemployment insurance for youth: Bahrain Poverty targeting data-bases: Lebanon, Iraq Cutting bread and fuel subsisdies; Income Tax (current context of Jordan)

26 % of GDP Social Spending as a % of GDP All Regions (Source: World Bank ) 14 Social Assistance Social Insurance Education Health Africa Sub-Saharan East Asia Pacific Eastern Europe and Central Asia n=4 n=3 n=6 n=9 n=3 n=2 n=3 n=3 n=21 n=21 n=22 n=25 Latin America and Carribean n=188 n=18 n=20 n=22 Middle East and Northern Africa n=7 n=11 n=6 n=11 South Asia OECD 23 n=3 n=2 n=3 n=4 Notes: Data on 87 countries taken from WB Public expenditure reviews or other similar work. We used OECD-23 since OECD countries such as Poland and Mexico are already accounted for in the regional averages. OECD data

27 Some Conclusions Social assistance does not disturb the status quo in MENA: this explains the salience of the concept as well as the attachment to conditional donor funding Social protection needs to be critically analysed as a body of policy knowledge itself in relation to social and economic rights The answer? not whether there is more or less social protection but the final outcome on sore social policy concerns with inequality, social welfare, social solidarity

28 Pension schemes in the Middle East and North Africa: generous but not to the poor! Markus Loewe German Development Institute, Bonn Paper presented at a Webinar on The state of social protection in the MENA region, organised by the International Policy Centre for Inclusive Growth (IPC-IG) and socilaprotection.org, 11 June 2018

29 Structure and main theses Existing pension schemes face multiple challenges with regard to: social fairness, efficiency and sustainability Only few tangible reforms have been implemented so far: Efforts to increase coverage rates (Tunisia) Merger of pension schemes in Jordan Plans to replace PAYG by a funded scheme though without privatisation AND not implemented (Egypt) Parametric reforms in most countries Conclusion: MENA policy makers are reluctant to implement reforms that are aimed at improving the equity or sustainability of pension schemes d i e Markus Loewe: Pension schemes in MENA 29

30 Challenges for the existing pension schemes

31 Funding is not the main challenge! On average, governments in MENA spend more on social protection and health than others (% of GDP) Source: IFPRI (2010) d i e Markus Loewe: Pension schemes in MENA 31

32 Funding is not the main challenge! Public spending on social protection and health (% of GDP) Source: own design based on IFPRI (2010); Loewe (2010) GDP per capita in international $ (PPP 2005, log scale) d i e Markus Loewe: Pension schemes in MENA 32

33 Four main challenges: 1. Low effective coverage rates 2. Fragmentation 3. Regressive redistribution 4. Deficient sustainability d i e Markus Loewe: Pension schemes in MENA 33

34 1st challenge: gaps in coverage Loewe (2014) d i e Markus Loewe: Pension schemes in MENA 34

35 military civil servants other employees in public administration employees in state-owned enterprises private sector employees outside agriculture with a permanent working-contract temporary employees employees in agriculture employers and the self-employed domestic workers foreigners 1st deficit : gaps in coverage Loewe (2014): update from Loewe (2005) Algeria x x + + Bahrain x x + + +/ a +/ a (+) + Egypt x x x + x x + Iran x x x (x) (+) (+) + Iraq x x x x Jordan x/+ b x/+ b / + c + Kuwait x (x) + Lebanon x x x x + + Libya x Morocco x x x x + +/ +/ + Oman x x x OPT x + + Qatar Saudi-Arabia x (+) Sudan x x x + + +/ + +/ + Syria x Tunisia x x x x + + x x x + d i e UAE x + Markus + Loewe: + Pension + schemes in MENA 35

36 2nd challenge: Fragmentation Case of Egypt: segmentation of society Loewe (2010) rich Non-contributory pensions: Armed forces and higher rank state employees 8 % of population Private life insurance 5 % of population Social insurance pension 36/ 52 % of population formal sector informal sector Special social insurance pension: self-employees 5% of population Subsidised basic social insurance pension 5 % of population poor Social assistance 5 % of population d i e Markus Loewe: Pension schemes in MENA 36

37 3rd challenge: Regressive redistribution Case of Jordan in early 2000s: Subsidisation leads to redistribution from poor to the middle classes Armed forces Subsidisation of public pension schemes public health spending public transfers Civil servants Formal employees of private firms Informal sector workers above poverty line People below national poverty line per capita gross receipts from government budget Loewe (2013) d i e Markus Loewe: Pension schemes in MENA 37

38 4th challenge: Deficient sustainability High administration costs (e.g. 25% in Bahrain, 32% in Mauritania, 47% in Oman) Incentives for manipulation (employers and employees overreport wages during last 3-5 years before while underreporting them ever before) Very generous minimum pension rules (e.g. 3 times poverty line in Algeria, 2,5 times in Jordan) Very generous early retirement options (e.g. at age 32 in previous Jordanian Military Scheme, age 35 in the general schemes of both Jordan and Bahrain) Inefficient investment of reserves (lending to the government at low, partly negative real interest rates; in addition the question is if government can ever pay back) d i e Markus Loewe: Pension schemes in MENA 38

39 Pension reform initiatives

40 Parametric reforms An independent investment unit has been established in Oman, Kuwait, Jordan and Lebanon The minimum age of retirement has been raised in Jordan and Yemen Pension levels have been capped in Egypt Minimum pensions have been reduced in Jordan Pension increases are now indexed to changes in average wages in Algeria, Tunisia and Yemen d i e Markus Loewe: Pension schemes in MENA 40

41 But more systemic reforms? All pension schemes have been merged over time in Jordan Considerable success! Efforts have been made to raise the effective coverage rate of pension schemes by the inclusion of informal sector workers in Algeria, Bahrain, Egypt, Kuwait, Libya and Tunisia Comparatively successful in Libya and Tunisia! Plans to replace the existing PAYG by a funded scheme in Egypt, Lebanon, Morocco and the Palestinian Territories have never been implemented d i e Markus Loewe: Pension schemes in MENA 41

42 Increasing the effective coverage rate: the case of Tunisia

43 Increasing the effective coverage rate The case of Tunisia: 12 schemes, administered by two different bodies A. Caisse Nationale de Retraite et de Prévoyance Sociale (CNRPS) (i) civil servants and military employees (1951) (ii) members of the government, members of the parliament, governors (1951) (iii) employees in energy sector (?) B. Caisse Nationale de Sécurité Sociale Tunisienne (CNSST) (iv) employees of private formal sector companies outside agriculture (1960/1974) (v) and (vi) employees in agriculture (old system; improved system: 1981; 1989) (vii) members of agricultural cooperatives (1985) (viii) self-employees outside (1982) and in agriculture (1989) (ix) migrant workers abroad (1989) (x) students (1988) (xi) low-income earners such as e.g. domestic workers, independent fishermen, small farmers, self-employed artisans (2002) (xii) intellectuals and artists (2003) Loewe (2010) d i e Markus Loewe: Pension schemes in MENA 43

44 Increasing the effective coverage rate Coverage > 80% of working population in 2010 Factors of success: - Strong commitment of policy makers to implement reforms - Awareness campaigns among target group - Intensive monitoring of enrolment and contribution payment - Possibilities to sanction non-declaration of employment or income - Financial incentives (e.g. subsidisation of contributions made by very low-income earners) - Differentiation of benefit packages by income level, social group, location, kind of employment etc. (despite higher administrative costs) - Good customer service Loewe (2010) d i e Markus Loewe: Pension schemes in MENA 44

45 Plans to replace PAYG by a funded scheme: the case of Egypt

46 Plan to replace PAYG by a funded scheme June 2010: Parliament passes law to establish a new pension scheme in Egypt on 1 January 2012 membership mandatory for labour market entrants; members of the old system allowed but not obliged to switch Contribution rates lower than in the old system, but without upper ceiling so that contributions were to be paid on all labour income. informal sector workers fully covered, their contribution being topped up by 25% of their own contribution (subsidy from the treasury) (instead of buying government bonds). Pension levels were computed from all contributions ever paid into the system so that members had no incentive any more to retire earlier than necessary or to manipulate income declarations After revolution: implementation put on hold until today Sabreen / Maait (2011) d i e Markus Loewe: Pension schemes in MENA 46

47 Conclusion

48 Conclusion Funding is not the main problem Rather, available public funds are spent for inefficient instruments and allocated in an unequitable way. Likewise, lack of technical and administrative know-how does not constitute the decisive bottle-neck! If needed, most Arab countries could easily buy it in. Apparently, political factors are the core factors! Most governments do not dare to implement urgently needed reforms because these might hurt their constituency or other influential social groups Especially the republican regimes have to perform in social policies mainly vis-à-vis the urban middle class in order to legitimise their rule but much less so vis-à-vis the poor who are much less well organised d i e Markus Loewe: Pension schemes in MENA 48

49 Conclusion Therefore, governments are reluctant to implement more comprehensive reforms worried that reforms might be at the expense of powerful and other strategically important social groups (e.g. in the field of pensions, subsidies, labour market constitution ) worried that reforms might consume significant financial resources that the government could need elsewhere (e.g. in the field of basic social transfer schemes) d i e Markus Loewe: Pension schemes in MENA 49

50 Thank you very much for your attention!

51 References Chaabane, Mohamed Towards the Universalization of Social Security: The Experience of Tunisia, Extension of Social Security Paper No. 4. International Labour Office, Geneva. Gillion, Colin, John Turner, Clive Bailey and Denis Latulippe Social Security Pensions: Development and Reform. International Labour Office, Geneva. Loewe, Markus Social Security in Egypt: An Analysis and Agenda for Policy Reform, Cairo. Economic Research Forum (Working Paper ) Loewe, Markus New Avenues to be Opened for Social Protection in the Arab World: The Case of Egypt. International Journal of Social Welfare, Vol. 13, No. 1, pp Loewe, Markus Soziale Sicherung in den arabischen Ländern: Determinanten, Defizite und Strategien für den informellen Sektor. Nomos, Baden-Baden. Loewe, Markus Caring for the Urban Middle Class: The political economy of social protection in Arab countries. In Katja Bender, Markus Kaltenborn and Christian Pfleiderer (eds.), Social Protection in Developing Countries: Reforming Systems. Routledge,: London. Loewe, Markus Pension Schemes and Pension Reforms in the Middle East and North Africa. In Katja Hujo (ed.) Reforming Pensions in Developing and Transition Countries. Geneva: UNRISD Loewe, Markus et al Improving the Social Protection of the Urban Poor and Near-Poor in Jordan: The Potential of Micro-insurance. Bonn: German Development Institute Robalino, David Pensions in the Middle East and North Africa. World Bank, Washington D.C. Sabreen, Mervat, and Mohamed Maait Reforming Egypt s Social Security System: A vision for social solidarity. Social Security Observer 13. d i e Markus Loewe: Pension schemes in MENA 51

52 Submit your questions to

53

54 Thank you for joining Changes in the provision of social protection in MENA since the Arab uprisings Make sure to answer our webinar survey, available after the session!

55 Thank you for joining the webinar Changes in the provision of social protection in MENA since the Arab uprisings