Underwriting the Poor. A Global Fund for Social Protection

Abstract

Seventy-five to eighty per cent of the world’s poordo not have comprehensive social protection, yetthe total costs of introducing social protection wouldamount to only 2-6 per cent of global GDP. PoorerStates often have not adopted social protectionsystems because a) the development modelssupported by major international institutions havepushed States to lower government spending andreduce the size of the State; b) where poverty andneed is widespread, infrastructure limited and theability of local populations to pay into the systemweak, meeting the basic costs of social protectionsystems today is a major challenge; and c) in manydeveloping countries (particularly small ones) a largeportion of the population is susceptible to the samerisks of unpredicted covariant shocks, e.g. naturaldisasters, epidemic diseases or extreme food priceincreases, leading to simultaneous surges in demandfor social protection and decreases in State exportand taxation revenues. To help overcome theseobstacles and ensure the provision of human rightsbasedsocial protection systems in all countries,the Special Rapporteurs call for the creation of aGlobal Fund for Social Protection (GFSP) with twokey functions: a) its facility branch would closethe funding shortfall for putting in place a socialprotection floor in least developed countries (LDCs);b) its reinsurance branch would help underwritethese schemes against the risks of excess demandtriggered by major shocks. ========OLIVIER DE SCHUTTER: UNITED NATIONS SPECIAL RAPPORTEUR ON THE RIGHT TO FOOD; ==MAGDALENA SEPÚLVEDAUNITED NATIONS SPECIAL RAPPORTEUR ON EXTREME POVERTY AND HUMAN RIGHTS