Social pensions key to fighting poverty, protecting elderly: ADB
KATHMANDU, JUL 21 -
As Asia’s population ages, developing countries in the region should explore social pensions that provide cash benefits to vulnerable older citizens who are most in need of a safety net, according to the Asian Development Bank ( ADB ).
“Social pensions can help older people gain access to health care, and enhance their status and social standing,” said S Chander, director general of ADB ’s Regional and Sustainable Development Department. “They also help the most vulnerable, particularly women and widows, who often lack savings or any form of social security, and face discrimination in terms of employment, inheritance and property law.”
The study—Social Protection for Older Persons: Social Pensions in Asia—looks at various non-contributory social pension schemes in the region and suggests that even providing a small bit of assistance can go a long way to reducing poverty. Case studies from Bangladesh, Nepal, Thailand and Vietnam illustrate that a social pension program with low benefits to many beneficiaries is more beneficial than high benefits to few beneficiaries.
Asia’s aging population is a development challenge as caring for the elderly can be costly and economic growth and productivity depends on a labour force that is regularly replenished with young adult workers, the study said.
Only a minority of Asia’s elderly receive pension benefits. Indeed, only about one-quarter of the workforce is covered by contributory pensions in the People’s Republic of China, Philippines and Sri Lanka. Less than one in 10 are covered by contributory pensions in Bangladesh, India, Indonesia and Vietnam.
The study found that targeting social pensions to income or poverty levels—as opposed to universal coverage—makes it difficult to identify eligible beneficiaries and can lead to mismanagement and favouritism. Social pensions can be attractive to policy makers in countries where national budgets are tight and poverty rates are high, as the beneficiary group is clearly defined and liabilities are simple to track, according to the study.
ADB , based in Manila, Philippines, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2011, ADB approvals, including co-financing, totalled $21.7 billion.
Posted on: 2012-07-21 08:42