Times of adversity call for a larger role by states to protect the vulnerable. One far-reaching outcome of the recent global economic downturn is the reiteration of the continued importance of the state as a protector of the labour force. The proposal by the International Labour Organisation and the World Health Organisation for a United Nations Social Protection Floor (SPF) Initiative, which has been in the making for over a year, is a vital intervention. The global social security floor comprises four elements: “universal child benefits; universal access to essential health services; modest financial relief for the working poor unable to earn enough for their families to escape poverty as a result of underemployment or low productivity; and basic tax-financed pensions for the old, the disabled and those who have lost the main breadwinner in a family.” Today's shocking reality is that a mere 20 per cent of the world's population has adequate social security protection, with the advanced economies having the lion's share of this coverage. Europe, at 25 per cent of GDP, has the highest level of social security expenditure, and Africa a meagre 4.3 per cent. Even within successful models, the Nordic states, which base their welfare systems on the principle of entitlements, have the more effective systems. A condition precedent for a global social security floor is direct state involvement, both economic and institutional.
Experience from the developing world reflects two massive failures. One is reliance on the ‘trickle-down' effect. The other is that social security measures in these countries, mainly colonial in origin, were until recently designed to cater largely to the formal workforce. The changeover to universal social security in their case demands three things. First, ensure universal provision of a set of basic services. Secondly, see to it that those who are economically active but fall into adversity are cushioned from slipping into poverty. Thirdly, support — through social transfers — those who are not at an economically productive stage. There have been some recent signs of change, although piecemeal, across the developing world. Schemes such as India's National Old-Age Pension Scheme, Brazil's Bolsa Familia, and Mexico's Oportunidades are examples of building blocks that can be used to create effective social protection systems. The challenge now is for states to re-configure their public finances and win political support to put in place a basic floor below which their residents do not fall.