Empowering change and resilience: social protection in the age of mega trends

💡 This article is featured in The Definitive Reading List: illuminem’s Recommended Sustainability Classics

Social protection systems are essential to achieving the 2030 Agenda for Sustainable Development.

However, social protection is insufficient across Asia and the Pacific, and the region is at risk from megatrends: climate change, demographic shifts and digitalization. Tens of millions of people have been pushed into extreme poverty since COVID-19, reversing past gains, and many millions more live precariously just above the poverty line.

Protecting our future today: Social Protection in Asia and the Pacific, a report by the Economic and Social Commission for Asia and the Pacific, outlines challenges in the region and offers an approach to solving them through foresight and urgent action.

Climate change is being felt across our region, causing loss of life and livelihoods. While the exposure and vulnerability vary between and within countries and groups, women-headed rural households in some countries, for example, suffer much higher exposure to cyclones and storms.  

Social protection is a powerful policy tool offering support for health, income and food security and help to those displaced. It can also buffer the impacts of climate policies, to help ensure a just transition.

Another mega trend is aging. Asia and the Pacific is the fastest aging region in the world. By 2050, a quarter of the population will be over 60 years of age, and there could be about one dependent person per worker. Pension schemes and health and long-term care will need to be strengthened without overburdening public budgets. The goal is a smooth transition to an aged society.

Social protection is going digital, making schemes more accessible and efficient. However, just 61.2 percent of people in Asia and the Pacific use the Internet and digital literacy rates can be as low as 4 per cent. New types of work, such as Internet platform-based work, lack legal clarity to ensure workers’ access to social protection. These gaps must be addressed to ensure that the benefits of digitalized services reach everyone, leaving no one behind. Moreover, with just 0.2 per cent of GDP invested in active labour market policies annually in the region, much of the workforce lacks the vocational training and support to transition or enter into new jobs, including digital ones.

Overall, Asia and the Pacific is making slow but steady progress implementing social protection systems for all by 2030 (SDG target 1.3). Available country data indicate that between 2016 and 2022, coverage increased (excluding health) across the life cycle, for children, persons with disabilities, people of working age and those in old age, in line with the concept of a social protection “floor”.  

Too many remain unprotected – 45 per cent of people in Asia and the Pacific have no coverage at all. Systems are often fragmented and under-resourced. Poverty-targeted programmes miss people and contributory schemes remain thin. Universal, life cycle and multi-pillared systems are needed to ensure minimum income security for all people and to build people’s resilience. 

Countries in our region on average spend only 8.2 percent of GDP on social protection, compared to the global average of 12.9 per cent. One third of countries spend less than 2 per cent. This low level of spending will not protect people from poverty and inequality given the megatrends. As many as 266 million more people could fall into poverty by 2040.

Estimates from the ESCAP Social Protection Online Tool (SPOT) Simulator  show that universal, non-contributory benefits for key life-cycle contingencies — childhood, disability, maternity and old age — could be raised in line with the global average for the equivalent of 3.3 percent of GDP in 2030. The cost of ensuring all children under age 18, persons with disabilities, mothers of newborns and persons over age 65 have minimum income security is within reach.

Future proofing starts with establishment of a universal social protection floor anchored in legislative and policy frameworks. It should progress as a multi-pillared system to provide full coverage and adequate benefit levels. Countries should link social protection with care and support services, education, health, nutrition, employment and climate policies. They also need to build capacity to identify, forecast and address climate risks to address new vulnerabilities, including through a better understanding of inequality. Additional actions could include extending non-contributory and contributory pensions to meet the demographic transitions underway, and using new technologies to enhance systems, always respecting the data rights and privacy of beneficiaries.

Done right, social protection can build people’s resilience, facilitate adaptation and mitigate negative impacts of change.