The International Labour Organisation has adopted a new global standard on the creation of a social security floor aimed at stimulating aggregate demand and fostering social cohesion. The moral and pragmatic appeal of these measures, as opposed to the dominant approach underpinned by austerity, should be apparent to all governments anxious to avert another global economic crisis. Social protection measures have expanded in most of the 77 countries surveyed by the ILO and World Bank on policy responses to the global financial and economic crisis. Among these are major middle-income countries from the developing world, providing important lessons on responding to unforeseen consequences from the boom and bust economic cycles and volatile financial markets. Some of these states are said to have put in place effective arrangements with a modest investment of one to two per cent of their GDP. However, only 20 per cent of the world’s population has adequate social security cover and 50 per cent lack any protection at all, according to the ILO’s 2010-11 World Social Security Report. The ILO’s new Recommendation on Social Protection Floor sets nationally defined guarantees aimed at universal access to essential health care and minimum income security; especially during old-age, unemployment, work-place injury, invalidity and maternity. Such guarantees are a human right and an ethical imperative of governments.
ILO Director-General Juan Somavia has rightly emphasised that social protection measures have the potential to generate demand in the economy, combat poverty, empower the vulnerable and ensure just, inclusive growth. Paradoxically though, European countries which have a long and enviable tradition of social protection have today emerged as unrelenting advocates of economic austerity. It is about time they effected a swift and effective course correction from a dogmatic emphasis on fiscal consolidation. Countries around the world are also committed to realising the United Nations Millennium Development Goals by 2015. Of these, those pertaining to basic health, removing illiteracy, maternal and infant mortality are the more critical human development indicators. Socially inclusive policies have a direct bearing upon the extent to which governments can realise these objectives. Therefore, the underlying importance of social protection in all of this can hardly be overstated.