Affordability

Recipients of the Bolsa Familia programme in Brazil
© International Labour Organization
Recipients of the Bolsa Familia programme in Brazil

 

 

β€œThe world does not lack the resources to abolish poverty, it only lacks the right priorities.”  

- ILO Director-General, Juan Somavia

 

 

 

 

 

For many countries, asking whether a Social Protection Floor is affordable is a common question. Yet, a more valuable question may not be "whether" but "how" an SPF can be afforded and financed.  Countries may want to consider the following:

  • How can programmes be re-prioritized such that resources from less essential or inequitable policies are moved towards policies that support the SPF?
  • From which sources, internal and external, can the Social Protection Floor be funded?
  • In keeping with the principle of progressive realization, which interventions should be undertaken first?

 

Flagship programmes – such as Oportunidades in Mexico, Bolsa Familia in Brazil, the MGNREGA 100-day Employment Guarantee in India – have shown not only that the impact of the Social Protection Floor on poverty can be dramatic but also that even large social protection programmes often cost less than 0.5 percent of GDP. In Cameroon, for example, expenditure on a universal old-age and disability pension would cost represent about 0.8 percent of GDP annually, over the next twenty or so years. The costs of more expensive programmes have also been estimated. Yet, though some of these programmes may require significantly expenditures in the near future, their cost (as a percentage of GDP) are often expected to decrease over the long-run.  In Tanzania, for example, expenditure on health care (both insurance and services) is projected to decline from 2.3 percent of GDP in 2005 to 1.5 percent by 2034. In Ethiopia, although the cost of basic education is expected to represent 3.6 percent of GDP in 2015, by 2034, it is projected to drop to 2.4 percent of GDP. For more information on costings and the assumptions behind the figures presented, see ILO costing studies published in 2005 and 2008.

SPF-I coalition members can provide technical assistance in the costing and planning of nationally adapted social protection floors worldwide. In fact, Social Protection Floor costing assessments and national dialogue processes are ongoing in: Benin, El Salvador, Haiti, Mozambique, Nepal, Togo, and Vietnam. To access several tools that may aid in the costing of a Social Protection Floor or any of its components, please click here.