Social protection systems in many fast-growing middle-income countries in Asia and the Pacific are failing to support the large numbers of poor and vulnerable people, said a new Asian Development Bank (ADB) study released July 3.
This has left them exposed to risks and unexpected difficulties such as unemployment, ill health, and natural disasters, said the study titled “The Social Protection Index: Assessing Results for Asia and the Pacific.”
“There are many vulnerable groups, including women and informal sector workers, who can’t access unemployment, health or other social insurance but are also not poor enough to be eligible for social assistance such as cash transfers,” said Bart Édes, director of ADB’s Regional and Sustainable Development Department, on the release of the study.
The study – which analyses government programs providing social insurance, social assistance, and labor market support in 35 countries across Asia and the Pacific – shows varied spending patterns across income groups and subregions.
According to the study, a few countries – Japan, the Republic of Korea, Mongolia, and Uzbekistan – have Social Protection Indices that are higher than 0.200, meaning they are already investing 8% of their gross domestic product (GDP) on social protection programs.
However, spending in most remains below 3% of GDP.
“Government social protection programs need to be expanded to cover this unprotected missing middle, who are at risk of falling into poverty in the case of an economic, environmental, or health shock of some kind,” said Bart Édes. The study notes that because social insurance tends to dominate government social protection spending, benefits accrue disproportionately to men and non-poor.
Poor and disadvantaged persons, particularly those working in the informal sector, benefit less because they lack access to social insurance. They are instead targeted by social assistance programs that in many countries are fragmented and provide inadequate transfers, according to the study.
“Relatively little is being spent on labor market programs like cash-for-work and skills development. This needs to be addressed amidst rising youth unemployment, critical skills gaps, and the disproportionate number of women who are unable to enter the formal labor market,” it said.
The ADB suggested that areas for government attention include employment guarantee schemes to construct or rebuild basic infrastructure, skills development, and technical and vocational education and training.
In addition, governments need to accelerate the review and reform of pension schemes in view of the region’s huge informal sector and rapid aging. Preventive social protection programs such as micro-insurance schemes to cushion the impact of variable weather patterns and natural disasters should also be explored, it said.
