PensionReforms
Veritas propter investigationem [Truth through research]
 
TitleSocial Protection for Older Persons - Social Pensions in Asia (2012)
AuthorsSri Wening Handayani
 Babken Babajanian
InstitutionAsian Development Bank
TopicsSocial expenditures
 Social equity issues
 Demographic issues
 International comparisons
 Retirement income adequacy
CountryAsia
Date Published2012
Date posted on PR24 Jan 2015
  
  
 
Handayani, WS Babajanian, B, (2012). Social Protection for Older Persons - Social Pensions in Asia (2012) Asian Development Bank,

PensionReforms’ summary and comments

This 321 page, 2012 publication is a collection of essays on aspects of social insurance arrangements in Asia.  This abstract will deal with the report’s more general chapters.  PensionReforms will look separately at some of the publication’s chapters on specific countries’ experiences with pension arrangements.  The report encompasses more than just income support for the old.

 

“The growing aging population in developing Asia and the Pacific has significant consequences for providing social protection to the elderly.  Social protection in the region has historically been weak and fragmented, and has mainly supported small segments of the population in the formal sector.  Many older people do not receive pension support and rely on their families and informal social networks for survival. Yet the support provided by such networks is becoming less dependable in the face of rapid urbanization and modernization.”

 

One of the problems with many countries in Asia is that they will get old before they are rich:

“Older people already constitute a large proportion of the poor in Asia.  With their number expected to triple from 410 million in 2007 to around 1.3 billion by the middle of this century, there will be more older people in the region than people of working age to support them.”

 

The report suggests that this group is “…in urgent need of some form of social protection”.  Older women are in particular need.  They tend to have no regular income and “either work at home or are employed in the informal sector [and] rarely have any form of social protection.  They also tend to live considerably longer than men, working until advanced old age, looking after younger family members and undertaking household chores.”

 

Rapid, recent economic growth has ‘worsened’ things because of improving mortality and the breakdown of traditional family ties:

“Despite tremendous economic progress in many countries, older people today often find themselves impoverished, neglected, and deprived of access to essential medical or other social services.”

 

Potential solutions include access to “social pensions”.  The report defines these as “transfer payments financed by the government budget” without, PensionReforms adds, a specific contribution from the recipient.  Social pensions have a number of advantages, including:

-              allowing the old access to healthcare;

-              “enhanc[ing] the status and social standing of older people”;

-              helping to reduce child poverty as the old traditionally look after the young;

-              supporting economic growth;

-              promoting gender equality.

 

“Social pensions are not a panacea. Rather, they should be part of a wide-ranging set of program and sector reforms.  Moreover, the differences in cultures and stages of economic development across the region must also be taken into account.”

 

A key initial question is whether the ‘social pension’ should be universal or targeted.  The report says “[t]his is a complex question, with significant implications for the cost, effectiveness, and political support for the program.”  It notes that “the targeting question is essentially political”.  After listing the countries in the various camps, the report drew no conclusion about a preferred approach which, given the report’s audience, PensionReforms thinks was politically sensible though unhelpful.

 

Implementing a social pension is a challenge especially in countries where public record-keeping has only a recent history.  Again, PensionReforms notes that no particular lessons can be taken from the pension’s design – universal vs. targeted.

 

Finally, it is important to monitor and evaluate the programme as that is key to the necessary “strengthening [of] the political will required to expand the program.”

 

“This global evidence base provides the international lessons on which this chapter is based.  Social pensions provide one of the core instruments for effective social protection systems in developing countries, reducing poverty, increasing well-being, and generating development outcomes in terms of nurturing human capital, promoting livelihoods’ development, and solidifying the foundation for pro-poor and inclusive growth.  Low-income countries demonstrate that social pensions are affordable and sustainable.  This evolving evidence base continues to inform policy makers and practitioners about how to more effectively design and implement social pension programs.”

 

PensionReforms notes that one of the problems with a publication of this kind is that the countries referred to in the cross-national comments are such a diverse group.  Some are rich; some are poor and some are very poor.  It’s not easy to see what lessons a Singapore might have for a Viet Nam; or a Mauritius for a China.  However, it does allow for the airing of country summaries in cases that are covered only infrequently.  Later, PensionReforms will look separately at the individual country summaries for Thailand, Viet Nam, Bangladesh, Nepal and ‘Central Asia and the South Caucasus’.

 

However, it was interesting to see an ‘official’ International Labour Organization view on some of the issues (at pp 137-153).  The ILO has ‘rules’ that are laid down in ‘conventions’ to achieve “basic income security” in old age.  The ILO thinks that “greater pension protection” is needed in the face of ageing populations.  That cannot be guaranteed, according to the ILO with “earnings-related, contributory pensions” though they can be part of a country’s overall policy mix.

 

“The evidence presented in many ILO and other studies shows that low-income countries not only should but also can have social security systems that provide a basic package of health services to everyone—basic cash benefits to the elderly and to families with children, and social assistance to a proportion of the unemployed.”

 

PensionReforms agrees and suggests that the high-income countries should also listen to the ILO’s advice.  (File size 1.3 MB; 321 pp) 715

 

 

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