Last update: Wed, 25 Jan 2017 04am
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Call for weaving of the social safety net

Fuel crisis, food emergencies, economic downfalls, financial breakdowns, floods, earthquakes and other natural disasters in the recent decade have ascetically uncovered the lackluster efforts of Asias social security system.

Faster economic growth does not necessarily solve social security crisis. It surely has not done that in Asia, an epitome of the global growth in recent times.

Despite impressive economic growth in many parts of the region, public spending on social protection has been one of the lowest, only surpassing that of Sub-Saharan Africa. Rather, the growth binge has indirectly resulted in widening of wealth inequality. The overall government expenditure on safety net in Asia and the Pacific stands at around 5 percent with wide regional swings.

In Pakistan, the social safety programmes are fragmented with very limited coverage. Public spending is a mere 2.4 percent of GDP which lacks adequate targeting. Besides, inadequate institutional framework shreds the safety net opportunities for the country.

Based on the sour state of affairs, the recent evaluations study by Asian Development Bank primarily focuses on making social protection affordable and gainful. The study breaks the so-called myth about safety nets being expensive, and emphasises on precision.

While targeted safety nets, and conditional cash transfer in particular, have the ability to reduce poverty, the lack of the same serves Achilles heel for the social protection system. Social interventions have been patchy and not well-targeted, making their outreach expensive and restricted.

Another challenge for the social safety system not only in Pakistan, but also in many developing and emerging economies like India, is the heavy reliance on subsidies. Though subsidies in food and agriculture sector have had positive impacts, these un-targeted fuel, food and energy subsidies are no silver bullets. They are generally vulnerable to abuse inflexibility and cost higher than social protection programmes. More often, they tend to benefit the well-off more than the genuinely poor. The case of CNG in Pakistan is an example of failure of an attempt to subsidise the energy costs.

Moreover, the changing global dynamics are now calling for more specific protections besides crisis management funding like inexpensive pension schemes and education and health care, all of which are non-existent in Pakistan.