The strategy of cost-benefits of the Neoliberal project has violently transformed and absorbed the project of the Welfare State as well as the Social Security discourses embedded in International Law mechanisms. Values such as Solidarity have been transformed in strategies of protectionism and limited Solidarity while Human Rights have been commodified and interpreted as costs to the States. In a similar vein, Risks are not currently perceived as problems but as new “opportunities”, as incentives that triggers the life of the market since it creates new needs which are the basis to stimulate the demand of a particular economy. The discourse of antipoverty strategies has been also totally converted in market strategies. But the questions that comes to our minds is when this transformation took place, why and how?. Well, the world is certainly experiencing processes of accelerated globalisation, transition and technical change. These processes might be characterised as a multitude of unexpected, uncertain moments that threaten the stability and cohesion of objectified forms of power at a particular point of time. The experience of the First World War allowed humanity to recognise that peace could not be achieved without first achieving Social Justice and Social Protection. Social Security as a human right had been perceived as the means to achieve Social Justice, as a result of this, new organisations were created such as International Labour Organisation (ILO) promoting decent work for all through the setting of international standards (Kulke et al, p.15). International Law was strengthened with the Universal Declaration of Human Rights (UDHR), the ILO Convention 102 and the International Covenant of Economic, Social and Cultural rights (ICESCR), these instruments of International Law offered some hope to the inhabitants of this world in order to live in peace and to achieve Social Justice through Social Security. In a similar vein, other institutions such as the World Bank were created but their strategy was different. Social Security was now not understood as a human right. The best way to create some Social Justice and provide Social Protection was not through universal strategies that only waste our resources, but rather instead, through the promotion of markets and economic development combined with some minimal Social Assistance or Safety nets embedded in a discourse of antipoverty strategies. The market was capable of offering new, unimaginable individualised “products” in national and international markets in order to ensure the survival of the person, eradicate poverty, social exclusion and achieve Social Justice.
This essay will contrast two different positions of Social Security. It will begin analysing the position of the ILO Conventions and the ICESCR on Social Security, and it will then also examine the position and strategy of the World Bank. The central argument of this essay is that both perceptions are likely leading us to the reproduction of an unequal system. This paper contends that unless a new strategy has a strong focus on reducing inequality we will not be achieving the ideal of Social Justice.
International Law on Social Security
Social Protection would be impossible to achieve without the commitment of states to implement Strategies of Social Security at the national level. International Human rights Law provides a framework that assigns rights and responsibilities to all stakeholders and provides effective benchmarks for interpreting a State’s obligation to protect, promote and fulfil human rights. Social Security is a human right from a legal perspective and is laid down in instruments such as Article 22 of the UDHR and Article 9 of the ICESCR, it has been also incorporated as such in some domestic laws. Traditionally the ILO’s work and standards are considered the most important source of interpretation and definition of this right. The International Labour Conference adopted the first international labour Conventions on Social Security at its very first session in 1919. These new instruments were originally concerned with labour conditions; soon however, countries were involved in the establishment and upgrading of national mechanisms protecting workers from industrial and social risks (Lemarche, p.90). The most important instrument on Social Security minimum standards is Convention 102 and it was adopted in 1952. Since then ILO has adopted 31 Conventions and 23 recommendations on Social Security. Only 8 out of 31 have been confirmed as up-to-date Social Security Conventions and only 12 developing countries have ratified this Convention out of 42. Convention 102 sets the minimum standards for all the nine branches of Social Security comprising medical care, sickness benefits, unemployment benefits, old age benefits, worker’s compensation, family, disability, maternity and survival benefits. To ratify this Convention a member state must comply with at least three of these nine branches. The other up-to-date Conventions (C.128 on pensions, C.130 on medical care, C.121 on employment injury benefits and C.168 on unemployment benefits) set higher standards for the different branches of Social Security or deal with the Social Security rights of migrants and workers (Kulke et.al, p.16). It is also important to highlight that Convention 102 does not define the meaning of Social Security rather the definition must be interpreted from various Articles of the Convention.
This Convention might be perceived as a universal and flexible strategy with key performing indicators that measure progress in the long term. It is certainly an instrument especially created to be adopted by all states independently of its level of economic development. The objective is to commit all states to adopt and ratify the Law, expanding its scope, coverage and level of benefits accordingly to their circumstances, indeed from the perspective of this instrument there is no right model for Social Security, rather this instrument has been designed to be tailored and used with the highest level of flexibility by governments. Each state must decide how best to guarantee income security and judge when to implement a particular policy adapted to their financial situation. In practice the Convention do not force countries to comply rather it sets a guideline, thus, instituting a strategy that aims to achieve the Social Protection of individuals through the expansion of the coverage of protected persons and level of benefits from the minimal to the universal. The objective of this Convention might be achieved through universal schemes (public service), Social Insurance schemes with earnings related or flat rate components or both as well as through Social Assistance schemes (Kulke et al, p.8). Convention 102 defines minimum levels in 9 contingencies and it does not require full coverage. Coverage can be a minimum of 50% of the employees in the formal economy or only 20% of the residents and it does not require all the benefits to be covered. An equivalent percentage of the wage rather than the level of needs of an individual are taken as an acceptable benefit level.
Critics of ILO Conventions suggests that some of the problems found with this model of security are presented when highlighting issues such as cutbacks in benefits, privatisation of systems, the need for efficient protection in transitional countries and the impact of Structural Adjustment Programmes (Lemarche, p.96). Half a century later, the Conventions appear to be out-dated. Its list of “contingencies” is derived directly from the old German-British-French Social Insurance schemes between the two world wars (Van Langendock, p.7). The world has changed, it is totally different, and therefore the Conventions are no longer applicable for modern Social Protection. It is also open to accusations of discrimination by putting a lot of emphasis on employment accidents and occupational diseases, providing typically for a higher benefit in the case of employment related disease or injury as compared to disease or injury not caused by employment (Ibid, p.8). Finally, it is also unsatisfactory since the protection offered, even by a member country having ratified the Convention, could fall far short of what Article 25 of the Declaration promises (ibid, p.7).
Observers such as Lemarche are keen to promote instead the ICESCR rather than the Conventions as a framework of strategy and monitoring of the Social Security project. Although ILO Conventions remain at the centre of the strategy of Social Security, Article 9 of the ICESCR provides for everyone’s rights to Social Security, including Social Insurance. Article 2 focuses on the continuous improvement, development and expansion by the State with a view to achieving progressively the full realisation of human rights. Lamarche presents a human rights project based on this instrument that promises to provide security to everyone. The author believes that Article 9 of the ICESCR provides for a more inclusive approach to the ILO Conventions, although the latter should remain at the centre of defining the right to Social Security. More specifically, her project consists in advancing a perspective of Social Protection more in line with human rights standards. By doing so, the author presents a framework of the right to Social Security and looks at current violations of this right to finally inviting to create a debate among members of civil society and NGOs in order to continue this journey of ensuring human rights protection as guaranteed by Article 11 of the ICESCR.
The Covenant provides technical standards and some flexibility (Lemarche, p.101) and it is useful when incorporating safeguards that can be used in order to increase the coverage of the population. Most importantly, the Covenant provides safeguards for everyone without the wages benchmark. Benchmarks can be used to evaluate existing schemes in the light of criteria established.
However, the author also recognises that benchmarks might present some problems when taking into account the monitoring process. These problems might arise if we acknowledge that there have been some countries without Social Security regimes as well as countries in which the Social Security is collapsing due to lack of funding and lack of essential mechanisms. In a similar vein, there are some countries in which Social Security has been transferred to the private sector as well as others countries in which the functions of Social Security have been transformed generating fewer cash benefits, more exclusion and poverty (Lemarche, p.100). On the other hand, Van Langendock noted that Article 9 of the ICESCR speaks of the right of “everyone” to such Social Security. It therefore cannot be sufficient to provide Social Insurance to most of the population, completing this with Social Assistance for the persons not covered by this scheme: the right to Social Insurance is meant to be a right for everyone, and its benefits can be completed and topped up by assistance and by other benefits (Van Langendonck, p.6). This observer also highlights that even if this document is a legally binding text the obligations for the states under it are in reality moral. Although states have to report to the UN about their compliance, no court has been set up to condemn states and no sanctions can be taken against them (ibid).
One of the major problems surrounding Social Security instruments is not so much their lack of relevance for less developed- or transitional- countries, but the potential for social exclusion i.e. women, nonindustrial workers, self-employed, workers in the informal sector (Lemarche, p.95) and other marginalized groups.
The World Bank on Social Security
The World Bank is not mandated to deal with Social Security or “Social Protection” as it prefers to call it. It is an organisation designed to finance programs in developing countries, helping these countries on the way to economic development (Van Langendonck, p.8). However, the World Bank has been also promoting Social Safety nets such as Conditional Cash transfers in order to provide a minimalist Social Assistance, recognising at the same time the unintended consequences of its economic policies. By doing so, the World Bank seems to have taken the position of ILO and have created new laws understood as “virtual Conventions and Covenants on Social Assistance” in relation to Social Protection.
The World Bank does not consider Social Security as a human right, indeed the most cost-effective way to create some Social Justice is through the promotion of markets and investment in economic development combined with some minimal Social Assistance or safety nets for those affected by macro-economic reforms. The strategy of the World Bank is Capital building and growth. The market is capable of offering new individualised “products” in national and international markets in order to ensure the survival of the person, promote Social Protection, eradicate poverty and social exclusion and achieve Social Justice. Traditional universal Social Insurance is not tolerated instead it is replaced by fully funded and privately products. The virtual laws of the World Bank constrain states to adopt such schemes which must be implemented by governments since it is a condition in order to obtain funding from this organisation.
Most of the Social Security schemes in Latin America, which have their origins in the era of Social Insurance, although were greatly influenced by International Labour standards in particular Convention 102 are now more and more influenced by the minimalist World Bank’s virtual Conventions and Covenants.
In the case of pensions, the Chilean Pension might reveal an example of the policies and influence of the World Bank. The system includes old age, disability and survivor pensions for workers. The country shifted from a public, PAYG (pay as you go) defined benefits (DB) plan to a privately funded, defined contributions (DC) system in 1981 (Lemarche, p.106). There are two big problems with this system: coverage and administrative costs, to put it simply too many people are outside the pension system, and too many of those in the system have found that saving via the pension fund is very expensive. There is clearly an exclusion especially of young people since many of them are staying out of the system or paying in very little. Some cannot afford to contribute beyond the obligatory minimum payment which is 10 percent of wages, while others are either self-employed or have been hired by companies as low-paid independent contract workers and thus do not have to contribute at all. According to Andras Uthoff, director of the social development division of the ECLAC the bottom line is that this system does not work with this labour market, if current trend continues only a small percentage of people are going to be able to finance meaningful pension. What happen to the rest? (Rohter: 2006) In 2008 and under the Bachelet government, the pension system was reformed again. However, the reform followed the strategy of the World Bank which recommended abolishing the minimum pension and the Pensiones Asistenciales replacing it by a tax-funded Solidarity pension system. There is uncertainty and a high level of risk with this Social Security system, especially about the future of many people in Chile. On the other hand, this type of strategy might create some problems in the future for the Chilean young people, and especially, women since they are the most affected and excluded in this process. According to Lemarche, what this suggests is that waged work cannot be used as a contribution basis for the purpose of providing Social Protection. Although this wage strategy has been successful in a context of near full employment, it evidently excludes large social groups and women in developed, less developed and transitional countries. Another critical issue is that when states moves toward the privatisation of social risks and social rights, its remaining capacity to guarantee the availability and quality of public good diminishes. The market cannot guarantee the survival of the person, and the new individualised “products” against social exclusion, now offered by many different markets (National, international), do not pass all the test of conformity to human rights standards.
In a similar vein, the case of Conditional Cash Transfers might illustrate the impact of the World Bank policies. Conditional cash transfers (CCTs) targeted to poor people are part of the new macro policies of the World Bank in terms of Social Safety nets. We might be tempted to compare CCTs to TANF in America or the New deal programme in the UK. However, it should be stressed that CCTs are part of a minimalist social policy strategy at the regional level operating in the interior of what looks like an informal liberal welfare regime. It consists of demand side interventions, namely, non-contributory cash transfers with conditionalities attached that are paid to families by the state. CCTs are paid directly to the mother in order to be targeted to their children who must be aged between 0 – 18 year old. CCTs have been designed to promote specific components (and this has to be highlighted) in three areas: education, health and nutrition. The idea behind is that by increasing enrolment and school attendance (basic and secondary) and increasing regular checks ups (including growth monitoring, vaccinations and other specific components in health) many benefits will be obtained. The assumption is that if a child remains in education, illiteracy levels will be reduced as well as drop out levels, and this in turn will promote and will cultivate the human capital of the child. An increase in consumption will have positive effects on chronic malnutrition, and thus, extreme poverty. CCTs implemented in an informal welfare regime will complement the income of poor people.
Supporters of CCTs such as Marta Sepulveda the UN Special Rapporteur on extreme poverty and human rights consider CCTs as a tool that can assist states in fulfilling their obligations under International Law. They have the potential to help with the realisation of legally binding human rights such as the right to an adequate standard of living including food, clothing, and housing and the right to Social Security. In a way countries might adopt the core strategy of the Conventions and adapt these principles to CCTs. There might be some scope for enlargement and governments might aim to expand gradually its coverage. They might also facilitate the realisation of other rights such as the right to education and the right to highest attainable of health as well as the right to take part in the conduct of public affairs. A rights approach to Social Protection programmes and specifically Conditional Cash Transfers Programmes enables states to better comply with human rights obligations while also increasing the effectiveness and sustainability of programmes. She recommends incorporating the right to Social Security in the Constitution and domestic laws as a first step to have an adequate institutional framework. The problem with this type of programmes is that they are still following the World Bank perspective, position and strategy on Social Protection. Conditional Cash transfers are interpreted as minimalists created with the objective of mitigating the effects of structural adjustment funds. It is clear that this type of assistance is not intending to provide universal coverage for the whole population.
(Le Marche, p.96) argues that the World Bank does not recognise Social Security as a human right instead the approach of the World Bank confuses charity with human rights. The examples of the Pension System in Chile and the Conditional Cash Transfers reveal clearly the hidden agenda of the World Bank. Its main strategy consists of promoting economic growth through privatisation while giving some Social Assistance through targeting and minimum coverage. At the same time, it is aiming to commodify the individual by providing some human capital that will allow him to compete in the laboral market. The problem with such strategy as it has been highlighted in the two examples above is that it produces economic growth but only for a group of powerful investors and not for everyone, thus, it is generating high levels of inequality and a big gap between the rich and the poor, it is also creating more risks such as unemployment, inequalities and exclusion (ibid, p.95,96), extreme poverty, crisis, conflict, discrimination, inefficiencies produced by the cutbacks in benefits/wages and privatisation.
Paradoxically, while implementing this individualist strategy the World Bank, Corporations and states aim to save costs in an individualised and competitive field by using other institutions, families, NGOs and communities to help them to attain the goal of individual accumulation and appropriation.
The project of International Law aims to develop, to expand its scope from the minimal to the universal, from the part or core to the periphery, while the project of the World Bank is shrinking its scope of protection from the universal to the minimal, from the periphery to the part, to the centre, through an innovative strategy of protectionism and individual accumulation. This process understood as a conflict of opposites, a synthesis, however is unequal and it is certainly threatening and putting the lives of many inhabitants of this world at risk, but instead of transforming the system to achieve more Social Justice, it is actually reproducing the entire system in vicious cycles creating more inequality. This is the way this virus has been able to survive for more than 200 years. Some authors such Van Langendock suggests that the project of International Law has failed since only 20% of the world’s population enjoy Social Security in a real sense, some 30% more have some sort of Social Security cover and about 50% of the world’s population do not have any kind of Social Security. The international organisations that we have set up in the last 100 years such as the ILO, the World Bank, the UN have implemented different types of strategies to combat poverty and provide some Social Protection to the poorest of the poor and have failed. The human Development Report 2000 also acknowledged that “social welfare systems protecting workers is decaying…migrant workers not only face discrimination in wages; they also live in poor conditions…domestic servants without labour protection facing inhuman working hours..(p,43) in addition to that, “economic growth has been extremely unequal and the gaps in human development across the world while narrowing, remain huge. (HDR p,5). The HDR introduced new measures such as the inequality adjusted (HDI) (IHDI), however, they acknowledged numerous problems that go beyond the capacity of individual states and require democratically accountable institutions (HDR p,2). The solution to this problem might lie at the international level creating a new institution such as an International Welfare State (Townsend 2010) that includes measures for international taxation, regulation of transnational corporations and international agencies, reform of representation at the UN and new guarantees of human rights, including minimal standards of income. Another alternative could be strengthening international structures such as the International Social Security Association, with new programmes to provide minimum benefits to all the elderly, all invalids, and all children, including a basic medical system financed by the growing wealthy section in these countries through Solidarity contributions as well as transfers from industrialised nations. These transfers could be managed by the World Bank and to make it compulsory the World trade Organisation could be used for monitoring these schemes (Van Langendock, p.11).
The instruments of International Law such as the ILO Conventions as well as the ICESCR not only promote Social Security as a human right, but also, provide many safeguards to the implementation of an effective strategy of Social Protection and Social Justice such as benchmarks that can be used by the international community for monitoring purposes. It also provides rights and responsibilities to states creating in government more commitment and ownership in the achievement of a more just society. The policies of the World Bank of privatisation, economic growth and the cut of benefits are creating new risks and new needs, new demands in the economy with the imposition of their virtual Covenants and Conventions, thus, instead of transforming the system to achieve Social Justice; it is in fact, continuously reproducing it. Both perceptions are likely leading us to the reproduction of an unequal system. This paper contends that unless a new strategy has a strong focus on reducing inequality we will not be achieving the ideal of Social Justice.
Indeed, any type of strategy to be implemented not only have to start from a radical change of administration at the international level, but it also has to be legally enforced by independent and accountable institutions, aligning at the same time to their strategies, practices and procedures a strong programme that might allow the reduction of inequality.
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