2007
Social security: Different strategies for a global problem

Cecilia Alemany
Social Watch Secretariat

Although social security is enshrined as a universal human right, in practice it is a luxury enjoyed by only a few. A mere one in five people worldwide has appropriate social security coverage, while more than half of the world’s population is excluded from any type of social security protection and most of the rest are only partially covered. From a broad perspective, social security encompasses all social services and rights that reduce risks for individuals and communities. Universal coverage could result from policies geared to employment and the reduction of social inequalities, and it is considered crucial for governance and democratic systems. Nevertheless, governments are increasingly transferring their social security responsibilities to the private sector, which is beyond citizen control, or simply abandoning them and dismantling social protection systems and the provision of social services like health care and education.

Social security: a luxury enjoyed by only a few?

The term ‘social security’ has different meanings in different regions of the world. In this Report, we use ‘social security’ to refer not only to pensions (that is to say, traditional social security in a restrictive sense of the term) but also to health services, education, employment and housing, taking a broad view of social security as including all social services and rights that reduce social risk for individuals and communities. As expressed in the Social Watch India report, from this perspective social security represents a complex multidimensional issue requiring urgent action.

At the international level, the key actors in the debate on social security have been the International Labour Organization (ILO), the employers or business sector, and the trade unions in negotiation with specific bodies (ministries, secretariats, etc.) of national governments. In 2003, at the 91st ILO International Labour Conference, the World Campaign for Social Security and Coverage for All was launched. This reflected the fact that governments, employers and workers all agreed on the need to widen social security coverage and extend it in particular to workers in the informal economy, and to raise awareness in the world about the role that social security plays in the economic and social development of countries.

When social security was proposed as the theme for the Social Watch 2007 Report, some members of the ‘watchers’ network (Social Watch members) raised certain doubts, fearing that this issue was relevant only in developed and middle-income countries: more a European concern than one of citizens’ groups in developing countries that form the majority of Social Watch national coalitions. The enthusiasm with which watchers in poor countries participated in the preparation of this Report and the quality of their national contributions demonstrate that social security is a global concern. The enormous inequality between the different situations around the world was also made evident. More than half of the world’s population is excluded from any type of social security protection and most of the rest are only partially covered; it is estimated that worldwide only one in five people has adequate social security coverage.[1]

There are very marked asymmetries:[2]

• In most European countries that are ‘in transition’ (former members of the Soviet Union or the Warsaw Pact), coverage is between 50% and 80%, but in most developed countries there is practically 100% coverage.

• In Latin America coverage varies from 10% to 80%, and development is stagnant. The report from Paraguay shows that 78.5% of the population is not covered at all by any kind of insurance and only 30% of the elderly receive a pension.

• In Southeast Asia and East Asia coverage varies from 10% to 100% and is on the rise, but in the less developed countries of Sub-Saharan Africa and East Asia more than 90% of people have no coverage whatsoever.[3]

The watchers identified problems arising from the ageing of societies, as well as increasing child poverty. In some countries, such as Uruguay, both phenomena exist simultaneously.

Although social security is enshrined as a human right, the data presented in the dozens of national reports compiled in this report indicate that in practice it is a luxury enjoyed by only a few.

In the conclusions of the Resolution on Social Security of the 89th ILO International Labour Conference (June 2001) it is established that:

There is no single ideal model for social security. It grows and evolves over time. There are social assistance regimes, universal regimes, social insurance regimes and public or private systems. Each society has to choose the best way to guarantee security of income and access to medical care. This choice will reflect its social and cultural values, its history, its institutions and its level of economic development. The priority function of the state is to facilitate, promote and extend social security coverage.

These national reports – many of them prepared by citizens’ organizations involved in social justice issues who have not traditionally participated in the debate on social security – not only reveal the diversity of situations and histories but also enormous similarities in the formulas applied over recent decades, very often recommended by international financial institutions such as the World Bank.


Social security and democracy

At a time when the debate seems to be focused on how to further reduce the role of the state, the national report from Somalia presents a perspective from the opposite extreme. Where there is no state, “few people can afford school enrolment, medical attention and other social services in the absence of a central government, whose role is to collect taxes and duties and convert the revenue into community development and public welfare.”

In many countries the discussion over social security is intrinsically linked to the efforts to construct a democratic state. The report on the Arab region[4] emphasizes that “social security should be perceived as part of a comprehensive system of political, economic, social and cultural strategies aimed at protecting national security, including human security and political stability within the society. The lack of freedom prevents people from establishing unions advocating for their rights to social security. Only democratically elected trade unions, labour organizations and professional associations can claim relevant representation of the different interest groups. They can thus lobby for the establishment of an adequate social security system, and also monitor the implementation of such a system.”

In reference to another situation where state authority has collapsed, the Iraq national report concludes that since “violence and humanitarian crisis have become a part of daily life… social security is more essential than ever.” And among its final recommendations its proposes that the country’s citizenship must be mobilized through a call for national unity amongst Iraqis by adopting dialogue as the only way to achieve national reconciliation, based on unity within diversity, non-violence, respect for human rights, and national independence, to preserve the country’s natural resources from waste and corruption.

The same emphasis is found in the national report from Burma, “a multiethnic society with diverse cultures, religions and traditions. Ultimately, peaceful co-existence and the guarantee of social security for all persons can be ensured only if the people’s right to self-determination is respected through an accountable, transparent and decentralized system of governance.” In Burma, stress the watchers, “the right to social security will become a reality when the inner dynamics, interconnectedness and interaction between the state, civil society organizations and capable individuals better reflect the dire need of the Burmese people.”

The need to strengthen democratic institutions is relevant not only in extreme situations such as these, but also in ‘consolidated’ democracies like that of India, where it seems that the right to education and health cannot be fulfilled and that, to judge from its actions, the government is trying to evade commitments that were made on the international level.

Both popular support for the democratic system and the very legitimacy of institutions can be endangered if the large-scale problems of inequality and exclusion are not resolved.[5] Transparency and access to information are necessary conditions if citizen participation is to be strengthened, but in some countries dialogue among public, private and civil society actors is still at a low level, and progress is impeded by prejudice at the government level.

In this regard, the Morocco country report shows how the growth of associations has given birth to a new generation of non-governmental stakeholders. The relations between these associations and the state have been evolving: they have gone through a phase of mutual distrust and are now coming to recognize that cooperation and joint action are possible. Nevertheless, some obstacles that prevent civil society organizations from participating in joint efforts for development still have to be overcome. Most importantly, a political and legal framework will have to be consolidated, one that is favourable to granting NGOs greater autonomy and expanding their role in formulating, implementing and evaluating decisions and policies that affect the most disadvantaged sectors of the population.

The report from Argentina attributes problems with social integration to problems with social and political rights, which are linked to the construction and maintenance of citizenship. It follows that social insertion strategies should be designed in such a way as to foster the transfer of economic, social, political and cultural resources to strengthen social networks among people who are excluded, to help them develop socioeconomic and political autonomy. Besides this, strategies should be geared to making the government’s policies, institutions and actions accessible and open in the sense of being responsive to society. This essentially amounts to establishing conditions for citizenship that are based on respect and on greater individual and social rights.


A need and a right

In this Report, Fernando Cardim de Carvalho puts forward the notion that a real solution to the problem of inequality and social security would be “to restore the primacy of full employment as a social goal, as it was in the first two decades after World War II, which would obviate many of the financial problems of social security systems. There is also a need to promote a broad debate with all sectors of society as to the perspectives of the social security system, in order to make it socially fair and economically sustainable. Unfortunately, the political climate is still unfavourable to such a debate, since neoliberal ideas about the virtues of the market are still strong, particularly among influential political groups.”[6]

Social security can be considered as resulting from policies geared to employment and to reducing inequality, and can be defended as necessary for governance and the very survival of a system that would lack popular support without it. However, social security is also one of the internationally recognized human rights, and therefore is not only advisable but also a legal obligation.

In the Philadelphia Declaration of 1944, the ILO Conference recognized the obligation to extend social security measures to guarantee basic income to those who needed it and provide complete medical coverage.[7] It is laid down in Article 22 of the Universal Declaration of Human Rights, approved by the UN General Assembly in 1948, that “Everyone, as a member of society, has the right to social security,” and in Article 25 explicit reference is made to medical care, social services, and security in the event of unemployment, sickness, disability, widowhood and old age, as well as special care and assistance for motherhood and childhood.

The right to social security is also laid down in many international and regional human rights agreements. In the second conclusion of the Resolution of the 89th ILO International Labour Conference, it is stated that:

Social security is very important for the well-being of workers, of their families and of society as a whole. It is a basic human right and an essential instrument to create social cohesion, and thus it contributes to maintaining social peace and social integration. It is an indispensable part of the social policy of governments and an important tool to avoid and alleviate poverty. Through national solidarity and the fair distribution of the burden, it can contribute to human dignity, equity and social justice. It is also important for political integration, the participation of citizens and the development of democracy.

The number of ratifications of the ILO Social Security (Minimum Standards) Convention (C102) is growing,[8] but it is still necessary to further strengthen this process. Some countries have still not ratified essential conventions. For example, in the national report from Tanzania there is a call for the government to ratify the ILO Unemployment Convention (C2) of 1919, which proposes measures for “preventing or providing against unemployment,” and the Unemployment Provision Convention (C44) of 1934, which establishes guidelines with regard to unemployment insurance and other forms of relief for the unemployed, and to comply with its obligation to submit periodic reports to treaty monitoring bodies in order to maximize and facilitate the fulfilment and implementation of international treaties guaranteeing the right to social security.

However, even after governments ratify these conventions they tend more and more to transfer their social security responsibilities to the private sector, which is beyond citizen control, or simply abandon them and dismantle social security systems and the provision of social services like health care and education. In the report from Zambia, for example, there is a summary of the commitments the government has made and the social security policy instruments that have been designed, but there is also a warning that there are no mechanisms to ensure that the right to social security is fulfilled, and the result is that most people in that country are not able to exercise this right at all.

In one of this year’s thematic reports, Christian Courtis[9] surveys the panorama and identifies places in which various aspects of the right to social security are covered by international human rights tribunals and bodies by virtue of interconnections with other rights and principles. Experiences in different countries show that the right to social security – or rather the rights derived from social security regimes – along with labour rights, constitute areas in which litigation at the local level is firmly established, not just in developed countries but also in developing countries. However, the prospects of using legal systems to directly enforce these rights on an international level are limited.


The informal sector

In the report from Romania we find that “the informal sector has grown significantly. As a result, while the entire work force was formerly covered by public forms of social security and trade union representation, today large numbers of workers are unprotected. Out of an active labour force of roughly 10 million, 1.2 million workers are estimated to be employed in the informal non-agricultural sector, and the total figure including the agricultural sector is much higher, according to unofficial estimates.”

In the report from Brazil we learn that many people who are economically active for most of their lives in the informal labour market, especially in urban areas, are penalized twice over because of the individual contribution requirement. They contribute to the wealth of the country at low cost but they are not covered by the National Social Security Institute nor have they paid unemployment insurance (and for this very reason they cannot exercise their labour rights), and then in their old age they suffer again because they are disqualified from enjoying the right to social security.

Much has been written on the informal or unorganized economy of the disadvantaged sectors of the population, but there is another large-scale unregulated economy sustained by “an enabling infrastructure of banks, legal and accounting businesses, minor legislatures and judiciaries, and related financial intermediaries, which combine to serve as an ‘offshore interface’ between the illicit and the licit economies.” The report by John Christensen points the finger at these parallel economies that are run by the wealthiest groups, and at the game of tax havens and new forms of corruption, and explains how these under-the-table deals and special treatment are threatening democracies. This is usually seen as a problem pertaining to countries in the South, but the countries that are least interested in regulating this sector are the richest ones, particularly Switzerland, the United States and the United Kingdom.

Many decision-makers in developing countries who have an economicist or conservative approach claim that there cannot be social security if there is no economic growth. ILO Director General Juan Somavía responds that “the approach that puts growth before distribution creates inequities that are difficult to re-absorb afterwards.”[10] Nevertheless, the report on the Arab region makes the realistic point that “if current trends continue there will be less protection and further marginalization of the unemployed, the abject poor, and workers in the informal sector. These negative projections are based on the persistence of existing budgetary constraints on social security systems and on inefficient public expenditure.”

In order to influence the concrete definition of priorities within the actual budgetary restrictions of their countries, the Social Watch coalitions in the Philippines and Italy have prepared alternative budgets as an instrument for civil society advocacy in parliamentary debates. Social policies suffer when demands and pressures are diffuse or when government implementation of measures is not coordinated. For example, in Lebanon, despite the implementation of social security programmes, “the inefficiency of social spending is due to the lack of a clear and comprehensive national social strategy. Such a strategy needs to address the current total absence of coordination among the concerned ministries and stakeholders, which leads to the duplication of efforts and waste of resources.”[11]

Various national reports reveal a lack of shared national development strategies and of coordination among government bodies and programmes.

In most of the Social Watch national reports from countries in the South, bringing citizens who work in the informal or unorganized economy into the official system is seen as the key to expanding social security to give coverage to the whole population. There are some interesting experiences of attempts to bring sectors of the informal economy into social security systems, and also instances of governments incorporating methods and experiences from informal initiatives into public education and health care services.

 
Many kinds of discrimination

The problem of informality is exacerbated by many kinds of discrimination that aggravate the situation for certain population groups and make them more vulnerable. The multiplier effect of inequality is rooted in the fact that it generally involves multiple discrimination for reasons of gender, age, ethnicity, geographical origin, religion and sexual orientation, as well as the discrimination faced by people who are differently abled, HIV-positive, or members minority groups.

People suffering from discrimination cannot exercise their rights or live with dignity. They are the most susceptible to poverty and are victims of increasing inequality, a phenomenon that also occurs in the richest countries. For example, in the report from Canada we learn that in polling undertaken by the Canadian Centre for Policy Alternatives (part of Social Watch Canada) the majority of Canadians (65%) indicate that they are not benefiting from economic growth. Many state they are only “one pay cheque away from poverty.”

In Nepal, “throughout the country, discriminatory practices rooted in tradition are mainly based on caste, ethnicity, class and gender. As a result, Dalits (members of the untouchable caste), Janajati (indigenous nationalities), the poor and women are deprived of opportunities to meet their basic needs in terms of food, shelter, education and health services. These discriminatory practices are more prevalent in rural and remote areas where unequal power relations, the unequal distribution of land and income and a lack of basic facilities are common.”

In many regions a high proportion of women are still self-employed. In the developing countries, most work of this kind takes place in the informal economy, and typically it is badly paid, is carried out under bad working conditions, and does not involve social protection.[12]

The chapter in this Report on the Gender Equity Index (GEI), written by the Social Watch Research Team, makes the point that inequity based on gender is a phenomenon that transcends borders, cultures, religions, nations and levels of income. Achieving gender equity is a challenge for the whole modern world because, although gender inequity is manifested in many different ways, there is still a gap between men and women in all countries.

A recent ILO study[13] confirms the fact that women are proportionally over-represented in informal employment. Nevertheless, when the proportion of men and women who are self-employed is more or less equal, there is a higher concentration of women in jobs of inferior quality.

In the report from Brazil we learn that rural women workers have been struggling in vain for years to be officially recognized as small producers. The work they do cultivating market gardens and medicinal plants and keeping small farm animals is absolutely vital for the maintenance and survival of their families, but on an official level it is undervalued or not taken account of, and consequently their rights as workers are not recognized. The Brazilian report goes on to say that the most serious case is that of nearly six million women, mostly in rural parts of the country, who do not possess any kind of documentation and for this reason are denied their rights as citizens.

The report from Honduras presents a panorama of violence against women. The government has still not ratified the facultative protocol of the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW), which is an indispensable resource that would enable women’s organizations and the victims of violence to report on this situation to the appropriate international bodies.

Most of the national reports from developing countries show a scenario of discrimination against women from disadvantaged regions whose only possible means of support is to work in the informal economy. But there are also some positive reports, like the news that in Bangladesh “considerable progress has been made in mainstreaming women in the country’s development process. Bangladeshi women have played and continue to play an important role in successful experiences like the use of micro-credits, the ready-made garments sector, reducing the overall fertility rate, improving child nutrition, greater participation in education and reducing gender disparity in all spheres of life. Girls and women in Bangladesh have already achieved parity in the primary education gross enrolment rate and in life expectancy at birth.”

Policies to gradually bring informal work into the formal economy play a crucial role in accelerating the reduction of poverty, preventing greater inequality of income and overcoming discrimination in general and discrimination against women in particular.[14] It is vitally important, if more rapid economic growth is to be achieved and if jobs are to be generated, that governments should implement education and training strategies to reduce the lack of skills, overcome discrimination and exclusion, and foster greater buying power among low-income population sectors.

The thematic report by Susanne Paul and Alischa Kugel highlights the fact that older women often have important care-provision responsibilities. They may be raising grandchildren or taking care of the sick or middle-aged people in communities hit by the HIV/AIDS pandemic, or they may be supporting grandchildren whose parents have left to work in distant places. As sole breadwinners, these grandparents may find themselves unable to provide adequate nutrition, access to health care or education for their children, grandchildren or themselves.

In the report by Robin Blackburn there is a suggestion that a global pension and youth grant system should be set up. It is also noted that the usual link between pension entitlements and employment contributions is not good for women because women live several years longer than men and therefore constitute a majority among the elderly. And because women’s unpaid labour in the home counts for little in public pension systems, and for nothing in private and occupational schemes, over three quarters of the elderly who are poor are female. Moreover, a woman’s work of caring for other family members typically continues into old age, as she cares for her spouse, her grandchildren and the sick.

Various national reports address the treatment that immigrants receive in terms of social security. For example, in the report on the Arab countries we learn that a large number of immigrants (mostly from South Asia and other Arab countries) live in the Gulf states with their families but do not enjoy the same social services as citizens of those countries. Benefits have not been extended to the immigrant labour force who carry out most of the low-skilled work but also occupy a significant proportion of skilled jobs.

In the report from the United States we learn that, second only to the war in Iraq, the lack of health care provision is perhaps the most contentious public policy issue in the country. As to the situation of minorities and immigrants, it emerges that certain groups are hit much harder than others when it comes to lack of health care coverage. African Americans, Hispanics, the poor and women suffer disproportionately under the current health care system. Lower income levels among minority groups (at the time of the study, 47% of working adult Hispanics and 44% of working adult African Americans were living below the poverty line) make them less likely to receive employee health care and less likely to be able to afford such services on their own account.

In Europe, the Belgium report notes that on 15 September 2006, the parliament passed legislation that amounted to a far-reaching change in Belgian law with respect to foreign nationals. Civil society organizations and trade unions are unanimous that these reforms cannot guarantee respect for the basic rights of many foreigners residing in the country, and in no way rectify weaknesses in the previous legal arrangements. Meanwhile, the report from Germany states that the rights of refugees to education and even to health care services are being violated in the country. In seven of Germany’s sixteen federal states, there is no requirement for refugee children whose deportation has been temporarily suspended to attend school, and the same applies to some extent to the children of asylum seekers.


Conflicting models

There is no single ideal model for social security, but there are certain internationally agreed basic principles[15] that all systems should follow:

• Benefits must be secure and non-discriminatory.
• Regimes must be rigorous and transparent.
• Administration costs must be kept to a minimum.
• Social stakeholders must play an important role.
• The system must enjoy the confidence of the people.
• There must be good administration.

Another principle is that men and women should receive equal treatment. This is the binding force and central core of social security, the element that makes for the optimum development of society. There must be recognition of the enormous unpaid contribution that women make, especially in the care of children, parents and the disabled.[16]

There are two conflicting trends in the implementation of these principles in adapting social security to the new realities imposed by globalization:

• Structural or ‘paradigmatic’ reforms. These are far-reaching reforms that involve individual capitalization and the complete or partial private administration of regimes. These systems are also known as ‘Washington Consensus’ models, and are part of the World Bank’s structural adjustment policies.
• Non-structural or ‘parametric’ reforms. These are changes to national public systems while keeping the basic structure intact. Non-structural reforms are based on the classic principles of solidarity and state organization of social security and are applied in most countries, particularly in developed ones. The classic example is the so-called continental European model of social protection, also known as ‘Social Europe’.

The national reports by the Social Watch groups in Europe describe the current situation of the European model. For example, in France social protection refers to all collective benefit mechanisms that give people financial support for social risks. There are three systems: 1) social security for people who contribute, which provides protection against loss of income, unemployment, illness, old age, and work accidents; 2) social assistance (implementing a solidarity-based system known as minimum income for insertion), benefits for disabled adults; and 3) universal protection (family allowances). The French social protection system represents more than 30% of GDP.[17]

Non-structural reforms

In general, non-structural reforms share the following characteristics:[18]

• They are implemented progressively, with a medium and long-term perspective, such as the process towards 2030 in Germany.
• They are widely agreed with the social sectors (as is the case in various European countries).
• They can bring about an improved correlation between contributions and benefits, for example through individual hypothetical accounts that first emerged in Sweden and were then taken up in China and Latvia; or the social assurance factor in Brazil.

Experts from the World Bank and other organizations that favour compulsory individual capitalization systems have made a series of criticisms of non-structural reforms and public systems in general.

Many of the arguments against public systems or Social Europe turn on the claim that the model is unsustainable, either for financial reasons or because of the implications of the fact that the population is ageing. For example, as is pointed out in the report from Italy, one of the most critical aspects lies in the fact that as an ageing country, Italians are now increasingly paying more for their elderly without a sufficient generational exchange that can produce enough revenue to cover all social security costs. However, the Italian report argues that it is not only the ageing population that should be taken into account, but also those who are currently unemployed, especially since the unemployment rate is not decreasing. Finally, when the ‘baby boom’ generation retires there will be an expenditure peak 20 or more years from now, while the reforms introduced are supposed to reach full application in 2010.

Structural reforms

Antonio Tricarico, in the report on the World Bank perspective on social security, argues that since the 1980s World Bank-driven structural reforms have systematically shifted the balance of social risk away from state institutions and onto the shoulders of the individual. For example, the World Bank’s policy objective of prioritizing financial system restructuring and development has increasingly targeted the reform of public social security institutions, and involves the privatization of old age pension systems.

In addition to providing rhetorical support for the ideological and financial interests that promote privatization, the World Bank has also provided loans and technical assistance to nations that have privatized their social security systems, in particular in Latin America and the Caribbean, and later in Eastern European countries.[19]

The national report from Nepal explains how industrialization in the country was initially state-led, but in an attempt to globalize the national economy, the trade, investment, foreign exchange, financial and industrial sectors were deregulated, de-licensed and subsequently privatized. Although the Bretton Woods institutions (the IMF and the World Bank) imposed structural adjustment policies in the 1980s, economic liberalization actually began in 1992. The privatization of basic services such as water, education and health care has further increased inequality by decreasing both the quantity and quality of public health and education services.

All structural reforms involve basic changes to the structure of pension and retirement pension regimes with the introduction of compulsory individual capitalization schemes administered by private sector enterprises, and they differ from each other only in the extent to which they replace the benefits regime with individual accounts, and in the definition of benefits.[20]

TABLE 2. The World Bank model: the pillars for economic security for the elderly

Source: ILO-CINTERFOR, 2003-2005. Taken from Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth. World Bank, 1994.

The national report from Bulgaria explains that under the financial direction of the international financial institutions (enforced through the conditioning of loans) and following the policies implemented in Central and Eastern Europe and Latin America, a whole new pension system architecture was set up, based on three pillars. The new architecture combines government and private involvement as well as compulsory and voluntary elements.

In 1999, criticism started emerging within the World Bank itself about its ideological approach to the structural reform of pension systems. The World Bank conceptualized its new approach as Social Risk Management (SRM). In 2000, in the World Bank’s World Development Report, a policy framework for Attacking Poverty was presented. Significantly, at the time the Millennium Development Goals were defined in the UN Millennium Declaration, the Bank clearly stated its intent to re-conceptualize social policy as social risk management.

The World Bank suggests that the state should provide “social safety nets for risk coping.” There is a premise that state institutions in developing countries will never be in a position to provide anything other than the most limited forms of social protection. This view is problematic as it appears to deny the possibility of social progress. The social risk management framework appears to have been built on the premise that developing countries should actively seek to implement social protection strategies which limit state action to the delivery of targeted social expenditure only.

These new formulations of World Bank prescriptions have also come in for criticism. Both Tricarico and the report on the role of the World Bank in the countries of Eastern Europe give an account of the different criticisms that have been made of the World Bank model from all over the world. The ILO has also systematized these criticisms, and recently an independent audit of World Bank research, which examined over 4,000 World Bank activities in the period 1998-2005, found that rather than policy being formulated on the basis of a balanced analysis of a wide range of research, policies were often formulated on the basis of historical preference, and then backed up by selective research and biased analysis.[21] The independent panel made telling criticisms of the way that World Bank research was used to proselytize on behalf of World Bank policy, often without taking a balanced view of the evidence, to the point that “the degree of self-reference rises almost to the level of parody.”

On the question of the impact of structural reforms, the report from India explains that the retreat of the state under the impact of the neoliberal framework and the forces of globalization have created a policy dilemma in which the concerns of the welfare state have been left behind. In spite of constitutional stipulations regarding the provision of social security, the current system leaves wide gaps, especially in terms of covering vulnerable sectors of the population like the elderly, women, children, and the millions of paid and unpaid workers employed in the unorganized sector.

In the thematic chapter by the Bulgarian Gender Research Foundation (BGRF) on the role of the Bretton Woods institutions in Eastern Europe, the point is made that there have been two kinds of social security reforms. On the one hand there is the kind that was applied in Poland, Hungary and Bulgaria (similar to those in Argentina), and on the other hand there is the system implemented in countries like the Czech Republic, Romania and Slovenia, which is more along the lines of the European social model in that it has not followed World Bank recommendations and seems to have been designed taking account of the lessons learned in Latin America.

In the national report from Latvia there is an outline of the main characteristics of the structural reforms in that country and how these have affected the quality of life of older people. In the report from Hungary it is stated that practically all areas of social policy have been affected by the transition and the neoliberal policies dictated by the international financial institutions in accordance with the Washington Consensus, in other words, the strengthening of individual responsibility and the weakening of public responsibility. Meanwhile, labour rights have been weakened and joblessness has increased, so labour security has been seriously undermined.

Fernando Cardim de Carvalho points out some other risks involved in the role that private equity funds and hedge funds play. Pensions are not similar to other classes of financial investment where investors select part of their surplus income to make a bet. The function of pensions is to guarantee a minimum income level that allows the retiree to maintain a certain quality of life. The middle classes and, in the more developed countries, the workers are the final investors in pension funds, and their future incomes should not be dependent on market games such as those played by private equity funds and hedge funds.

Aldo Caliari notes that the G8 Summit at Heiligendamm in June 2007 failed to take any meaningful action. The German finance minister’s attempts to push for an agreement on tightening regulation of hedge funds were quickly opposed, mainly by the US and UK governments, and were soon watered down to mere calls for disclosure in the interest of greater transparency. As the G8 Summit drew closer, it seemed that even modest transparency requirements of a mandatory nature were too much to enforce on hedge funds.

The role of the international community

In the fight against poverty as one of the ‘banners’ of international cooperation there is less and less emphasis on social justice. Although emergencies certainly require urgent attention, the approach to poverty solely as assistance to people who are affected is leading to increasing inequality and is not tackling the root causes of the problem. Poverty is a problem for all societies; it is not a ‘disaster’ that affects a small group of the poorest countries (even though these countries do deserve priority treatment and special attention).[22]

The international community recognizes the problem of inequality and its multiplier effects as being as serious as the problem of poverty. Nevertheless, international organizations continue to rank countries by income – in terms of per capita GDP – which is an average indicator that conceals inequalities, because it takes a country’s annual income and simply divides it by total population.

The Human Development Index (HDI) of the United Nations Development Programme (UNDP) incorporates health and education as well as income, and it is clear that countries with similar levels of per capita income may rate very differently on the HDI. The Basic Capabilities Index (BCI) developed by Social Watch[23] dispenses with income and compares countries according to their progress in a number of basic capabilities that are indispensable for a decent life.

The European Commission recently made an effort to develop a governance index, but this is criticized by Mirjam Van Reisen and Simon Stocker in their report on the European Union. While issues are hanging over the democratic scrutiny of the country programmes for Africa, the European Commission is placing strong emphasis on a governance facility for Africa. The instrument has come in for serious criticism. Out of a total of 23 indicators, only one is related to the Millennium Development Goals. Other indicators focus on issues such as migration, trade liberalization and counter-terrorism, and are aimed at negotiating a response to European interests in exchange for EU aid. It is unclear if the signing of European Partnership Agreements arranging new trade cooperation agreements between the ACP countries and the EU also has an impact on the assessment of ‘governance’ in the partner country.

The unions organized through the International Trade Union Confederation have a clear understanding that local and national problems require international solidarity, and that the challenges facing the world make it necessary to organize on a global scale. But the major international campaigns against poverty, or the massive solidarity expressed by the public worldwide when there is a disaster like the tsunami in December 2005, have not served to rectify the basic inequities in the world economic system. There is a lack of international solidarity, and this is clear from the fact that development assistance is so paltry, that developing countries’ trade is often impeded, that world opinion is indifferent to the double standards of transnational corporations from the North in their dealings with the South, and in how the problem of foreign debt is being handled.

This reality contradicts the promises made by the international community. In the report by Rebecca Carter and Stephen Lister, it is argued that by signing up for the Millennium Development Goals (MDGs), the international development community made a commitment to fulfil the right to social security for all. This right could become actionable in international courts, as demonstrated in the report by Christian Courtis, and its implementation worldwide would be perfectly viable if there were the necessary political will to achieve it.

Notes:

[1] ILO (2001), Report 4 of the 89th ILO Conference: Social Security: themes, challenges and perspectives.
[2] Study conducted by the International Social Security Association (ISSA) with the Social Policy Research Centre at the University of Loughborough, the United Kingdom, under the direction of Simon Roberts.
[3] ILO/Wouter van Ginneken (2003). Extending social security: Policies for developing countries. ESS Paper No. 13. Geneva, International Labour Office.
[4] By Ziad Abdel Samad and Diana Zeidan from ANND.
[5] See UNDP (2004). La Democracia en América Latina: Hacia una Democracia de Ciudadanas y Ciudadanos. 2nd edition, Buenos Aires.
[6] See the chapter by Fernando Cardim de Carvalho in this Report.
[7] Detailed information from CINTERFOR/ILO (2003-2005) Training Units, the “Social Security in the Southern Cone” Project, 2003-2005, ILO International Training Centre.
[8] ILO/Somavía (2007a). Introduction by the Director General of the ILO at the International Labour Conference, Decent work for sustainable development. ILO 96-2007/Annual Report I (A). The Convention is available from: <www.ilo.org/ilolex/cgi-lex/convds.pl?C102>.
[9] See the chapter by Christian Courtis in this Report.
[10] ILO/Somavía (2007b). Director General’s Report: Equality at Work: Facing the Challenges. Global report in coordination with follow-up on the ILO Declaration on basic principles and rights at work. 96th International Labour Conference.
[11] See the chapter on the Arab region in this Report.
[12] ILO/Somavía (2007b).
[13] Galli, R. and Kucera, D. (2007). “Gender, informality and employment flexibility in Latin America”. To be published. Cited in the Director General’s Report to the ILO, 2007.
[14] ILO/Somavía (2007a).
[15] CINTERFOR/ILO (2003-2005).
[16] ILO/De Regil (2001). Report by the President of the Employers Group on the Social Security Committee at the 89th ILO Conference.
[17] <www.vie-publique.fr>
[18] CINTERFOR/ILO (2003-2005).
[19] The situation in the East European countries is dealt with in the report by BGRF/Bulgaria in this Report.
[20] CINTERFOR/ILO (2003-2005).
[21] Banerjee, A. et al (2006). An Evaluation of World Bank Research, 1998-2005. Cited in the report by Antonio Tricarico in this Report.
[22] Social Watch (2007). Guidelines for national reports.
[23] See the section on the Basic Capabilities Index 2007 in this Report.

With support from Daniel Ciganda and Nicole Bidegain.