….Says Africa Needs 17.6% Of Yearly GDP For Social Protection
The International Labour Organization (ILO) has charged governments of low- and middle-income countries to increase spending to ensure universal social protection by an estimated additional US$1.4 trillion if they are to provide basic social protection for all.
A new working paper by the organization titled ‘Financing Gap for Universal Social Protection: Global, regional and national estimates and strategies for creating fiscal space’ indicated that currently the financing gap represented 3.3% of the annual GDP of low and middle-income countries combined.
According to the ILO, the findings point to even greater challenges for low-income countries, where the social protection financing gap reaches an overwhelming 52.3% of annual GDP.
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The organization pointed out that to achieve universal coverage, low- and middle-income countries would need additional government spending of 10.6% of annual government expenditure, which can be raised through domestic resources, such as taxation and social security contributions, as well through better management of sovereign debt.
However, the ILO projected that for low-income countries in particular, bridging the gap would require the mobilization of four times annual government expenditure, hence the working paper stressed the need for international solidarity.
The authors noted that to close such a gap, development assistance to these countries would need to be more than tripled and used solely for social protection.
Regionally, the findings showed that Africa faced the most substantial challenges, with a financing gap of 17.6% of the continent’s GDP per year, followed by low- and middle-income countries in the Arab States (11.4 per cent), Latin America and the Caribbean (2.7 per cent), Asia and the Pacific (2.0 per cent) and Europe and Central Asia (1.9 per cent).
The paper also indicated that attaining universal social protection remained pivotal, in order to adequately address the consequences of the climate crisis, since universal social protection helps to reduce vulnerabilities and climate shocks.
As such, the document noted that international climate financing can help reinforce and adapt social protection systems in low-and-middle income countries.
Based on figures for 133 low-and middle-income countries, the working paper provided estimates of the investment necessary to ensure universal coverage of basic benefits for all children, mothers of new-borns, persons with severe disabilities, persons in old age and the unemployed, as well as universal essential health care.
