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Contributions from
the Column
Monitor
How UN missions impact
on local economies
Trade liberalisation has
born little fruit
Conference: “E-Learning
Africa 2006”
Wieczorek-Zeul and
Morales meet
Solidarity and productivity
Debate on debt relief
AIDS medication:
progress with provision
Bird flu: EU increases
export subsidies
A new role for the IMF
05/2006
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[ Safety nets ]
Solidarity and productivity
80 % of world population have no access to social security systems such as old-age pensions or health insurance. Many countries, of course, lack the resources required to set up such systems. However, Michael Cichon of the International Labour Organisation (ILO) has identified another reason: the lack of political will. Cichon demands paradigmatic change, according to which safety nets would be regarded as an investment in social peace and a contribution to a country’s productivity. After all, he says, social security has been an important factor for growth and inclusive development in all industrialised countries.
Michael von Hauff, economist at Kaiserslautern Technical University, also emphasises the positive effects that social safety has on productivity. In his view, globalisation has aggravated the controversy about the welfare state as such that majorities even in rich countries now believe that their welfare systems should be limited. This sceptical attitude in Western countries informs the debate in developing countries, Hauff argued at an expert discussion held by Germany’s development bank KfW Entwicklungsbank in Berlin in April.
Experts believe, that comparative studies on where and when welfare states ran into problems in Europe and how such crises are to be prevented would be of greater help to poor countries than the sense of skepticisim prevalent today. Cichon points out that other taxes than only contributions made by employers and workforces can serve to fund the welfare state, making sure its services reach workers in the informal sector too. Hauff recalls the Asian crisis in 1997/98, which drove many people into poverty. His conclusion is that restructuring the international financial markets would contribute to greater social security.
Peter Wahl of WEED, an globalisation-skeptic organisation, states that the central idea of the welfare systems established in Europe in the 19th century was the solidarity principle, according to which the strong must support the weak. Today, however, social safety nets are more and more understood as “market-led” systems. Wahl argues that, all summed up, this approach only leads to elites and upwardly mobile middle classes in developing countries underwriting private insurance, whereas the poor remain unprotected.
Sabine Grund
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