Academic journal article Monthly Labor Review

Social Security and Protection in the Developing World

Academic journal article Monthly Labor Review

Social Security and Protection in the Developing World

Article excerpt

In retrospect, the 1980's and 1990's may appear as one of the great watersheds in the development of social policy. A large number of countries are at present contemplating, planning, or implementing major changes to their systems of social protection.(1) Some of them are undertaking large-scale expansions of their systems from a very limited economic base. There is now almost no country in the world in which some kind of reform, development, adjustment, improvement, or modification of its social security system does not figure into its political agenda. By the early years of the next century, the international landscape of social protection may have changed beyond recognition.

The list of countries affected is a long one. In China, the government is planning to introduce major reforms to pension schemes, employment injury insurance, unemployment compensation, and, later on, health care. In India, schemes for early retirement, unemployment compensation, layoffs, and retraining are being developed as a prerequisite for the restructuring of industry. In Thailand and in Palestine, for very different reasons and in very different circumstances, social protection programs are being developed from a highly limited base. In a number of countries, especially in South East Asia and in East Africa, national welfare funds are being converted to pension schemes. Conversely, in Latin America, many countries are contemplating a change to privately managed pension schemes based on individual accounts. In Central and Eastern Europe, most countries face an almost complete overhaul of their pension and health care systems, together with the establishment of new programs of unemployment compensation and social safety nets. In Africa, many systems, such as that in Madagascar, are being fundamentally redesigned in both their coverage and their organization and management. The timing of all of these maneuvers differs from country to country. Some, such as Chile, introduced major reforms several years ago. Others, such as Nigeria, are in the middle of their transformation. Still others, such as Vietnam and Mexico, are just beginning changes. Waiting in the wings are countries such as Cuba, South Africa, and Nepal. The history of the changes in each country also differs: Uruguay has a long tradition of social security, but is now planning a radical transformation of its existing system. The United Kingdom and the Netherlands have recently made important changes in their health insurance systems, and the United States may do the same. There is a great deal of discussion among member countries of the Organization for Economic Cooperation and Development (OECD) regarding the effectiveness, cost, and economic performance of current systems of social security.

The pressures for reform and development also vary widely from one country to another. In many countries, the impetus stems directly from a process of economic adjustment: expanded systems of social protection are required to deal with the social consequences of structural adjustment and economic stabilization. In a similar context, the huge transformations associated with the transition from a planned to a market-oriented economy principally, but not only, among the countries of Central and Eastern Europe have meant that many of the functions previously located in state-owned enterprises must now be redeveloped as authentic social security mechanisms. New systems of unemployment compensation and social safety nets must also be developed, to cope with the large number of workers becoming unemployed. In other countries, the prime force has been economic growth and urbanization: populations that were previously too poor or not sufficiently industrialized even to contemplate social security systems now see them as an essential concomitant of the move toward an affluent society. The process of democratization has also influenced events: in Brazil and a number of other countries of Latin America, new constitutions have included access to social security as one of the basic rights of all citizens, often on the basis of Conventions and Recommendations adopted by the International Labor Organization (ILO). …

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