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September 1994, Vol. 117, No. 9
Social security and protection in the developing world
In retrospect, the 1980's and 1990's may appear as one of the great watersheds in the development of social policy. A large number of countries are at present contemplating, planning, or implementing major changes to their systems of social protection.1 Some of them are undertaking large-scale expansions of their systems from a very limited economic base. There is now almost no country in the world in which some kind of reform, development, adjustment, improvement, or modification of its social security system does not figure into its political agenda. By the early years of the next century, the international landscape of social protection may have changed beyond recognition.
The list of countries affected is a long one. In China, the government is planning to introduce major reforms to pension schemes, employment injury insurance, unemployment compensation, and, later on, health care. In India, schemes for early retirement, unemployment compensation, layoffs, and retraining are being developed as a prerequisite for the restructuring of industry. In Thailand and in Palestine, for very different reasons and in very different circumstances, social protection programs are being developed from a highly limited base. In a number of countries, especially in South East Asia and in East Africa, national welfare funds are being converted to pension schemes. Conversely, in Latin America, many countries are contemplating a change to privately managed pension schemes based on individual accounts. In Central and Eastern Europe, most countries face an almost complete overhaul of their pension and health care systems, together with the establishment of new programs of unemployment compensation and social safety nets. In Africa, many systems, such as that in Madagascar, are being fundamentally redesigned in both their coverage and their organization and management. The timing of all of these maneuvers differs from country to country. Some, such as Chile, introduced major reforms several years ago. Others, such as Nigeria, are in the middle of their transformation. Still others, such as Vietnam and Mexico, are just beginning changes. Waiting in the wings are countries such as Cuba, South Africa, and Nepal. The history of the changes in each country also differs: Uruguay has a long tradition of social security, but is now planning a radical transformation of its existing system. The United Kingdom and the Netherlands have recently made important changes in their health insurance systems, and the United States may do the same. There is a great deal of discussion among member countries of the Organization for Economic Cooperation and Development (OECD) regarding the effectiveness, cost, and economic performance of current systems of social security.
This excerpt is from an article published in the September 1994 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The terms social security and social protection are used rather loosely. The former generally refers to social security programs that are directed at meeting a specific need, that are usually financed on the basis of contributions, and that are available to beneficiaries on the basis of their participation and entitlements (although benefits are not necessarily proportional to contributions on an individual basis). The later term is intended to encompass both social security programs and other forms of benefits and services (such as family benefits, universal health care services, and minimum-income provisions) that are generally available on a universal basis without regard to participation, contribution or employment status (although they may include a test of means). In any event, the distinction is not a rigorous one.
ILO labor statistics convention: U.S. accepts new obligations. June 1991.
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