Crises act as tipping points. Local crises and conflicts can galvanize a social movement or discredit a leader in a given location. Global crises change far more than that – the 2008 financial crisis has been credited with everything from sparking the rise of right-wing populism (hopefully now heading for a historical dustbin near you) to transforming norms around inequality and the role of the state.
A new paper from Oxfam’s Liliana Marcos Barba, Hilde van Regenmortel and Ellen Ehmke takes a look at one possible tipping point arising from the pandemic – a transformation in the role of universal social protection (USP). Here’s the argument of ‘Shelter from the Storm’ (coincidentally, one of my favourite Dylan songs):
‘Before the pandemic hit, more than 4 billion people lacked access to any form of social protection. Many governments, including in low- and middle-income countries, have taken the bold decision to invest in the expansion of social protection. According to the World Bank, the pandemic-related expansion of social protection transfers has reached 1.3 billion people globally. This has required governments to dig deep into their domestic resources or to take loans from private or public banks.
Oxfam and Development Pathways have investigated the social protection cash transfers to respond to the COVID-19 crisis in 126 low- and middle-income countries between April and September 2020. The results of the research are published in a new Oxfam briefing paper and can be summarized in the following conclusions:
• Expansion is possible. 75% of the countries investigated have introduced cash-based emergency social protection through a ‘horizontal’ expansion of their social protection programmes (i.e. reaching more people), or by a ‘vertical’ expansion (i.e. increasing the value of the benefits).
• Having social protection systems in place matters. Countries with more robust social protection systems in place, such as South Africa, have been able to better protect their populations and their economies, although more could have been done.
• Overall investment is low. Across all low- and middle-income countries that have introduced emergency social protections, the average investment has been just 0.46% of GDP. Just two of these countries have reached 2%, the rule-of-thumb benchmark for avoiding deep recessions.
• Too few people are protected. Unemployment schemes do not exist in the majority of the countries analysed; they lack automatic mechanisms that protect people who lose their income. The emergency responses in 81% of the countries cover less than half their populations. In 29% of the countries, fewer than one in 10 people have been protected.
• Women benefit less. Very few schemes have taken into account the specific needs of women, although 49% of the schemes cover income or job losses of people not enjoying unemployment insurance, which may benefit the many women in precarious and informal employment. Direct support for care burdens is hardly ever integrated into national responses. Women might benefit indirectly from financial support to children or people with disabilities. However, these schemes are usually poverty-targeted, excluding many women in need.
• Inadequacy of protection. There is little a family can do if pay-outs are too small, irregular or do not last long enough. All of the benefits analysed provided to families are short-lived and too low to pay even for basic needs. In Colombia, a newly created scheme reaches 3 million households of informal workers with a monthly transfer equivalent to just 2.5 days of the national minimum wage.
• Debt financing of social protection creates risk. Of the 59 countries for which information is available, 41% are funding their social protection responses through domestic revenues backed up by financial support from international financial institutions through loans and temporary debt suspension. While temporary debt service suspension means postponing repayments into the future, loans mean an increase of debt owed. Both will eventually need to be repaid, possibly leading to deep cuts in future public spending.
• Overseas development assistance (ODA) for social protection falls short. Prior to the pandemic, supporting social protection policy development constituted only 0.7% of overall ODA by OECD donor countries in 2018. During the pandemic, ODA spending on social protection has rapidly increased, particularly ODA channelled through key multilateral donors. Real-time aid tracking data from the International Aid Transparency Initiative (IATI) shows that aid commitments to social protection increased by 182% in the first six months of 2020 ($9.bn) compared to 2019 ($3.2bn). However, this amount is still very low. Rich countries have only increased their aid to low- and middle-income countries for social protection by $5.8bn – the equivalent of less than nine cents for every $100 raised to tackle COVID-19.’
So when Covid is over (please don’t tell me we now have to start saying ‘if’), will it turn out to have tipped the norms of global political economy towards a legacy of USP? Now that would be a silver lining worth having.