Journa l o f Southeas t As ian Economies � Vo l . 3� , No . � , Apr i l 20 �4

Journal of Southeast Asian Economies Vol. 31, No. 1 (2014), pp. 1–17 ISSN2339-5095print/ISSN2339-5206electronic

©2014JSEAE

DOI:10.1355/ae31-1a

Poverty, Inequality and Social Protection in Southeast Asia

An Introduction

Sarah Cook and Jonathan Pincus

Social protection programmes have expanded rapidly in the developing world in recent years. In Southeast Asia, the experience of the Asian Financial Crisis of the 1990s heightened awareness of vulnerability to poverty and the role of government in protecting households from a sudden loss of employment and income, or from contingencies such as ill-health and ageing. Most governments have expanded targeted social assistance programmes, although the quality and coverage of these programmes vary from place to place. Public support for basic health and education services is also uneven. Common challenges in the region include economic risks associated with financial globalization, rapid urbanization, high levels of informal employment, rising dependency ratios and a highly unequal gender division of labour.

Keywords:SoutheastAsia,socialprotection,poverty,economicinequality,globalization.

This policy focus issue presents selected papersfromtheAsiaPolicyForumonPoverty,InequalityandSocialProtectionheldinJakartainMay2013.The Asia Policy Forum, an event organized bythe Harvard Kennedy School’s Ash Centre forDemocratic Governance and Innovation, bringstogether policy-makers and scholars each yearto discuss an issue of critical importance to theregion. This year’s Forum was co-sponsoredby the Indonesian government’s Team for theAcceleration of Poverty Reduction (TNP2K), theRajawaliFoundationandAustralianAid.

Social protection is now widely accepted asencompassing a set of programmes designed to

assist individuals and households in maintainingbasic consumption and living standards whenconfrontedbyarangeofcontingenciesacrossthelife course (including ill-health, unemploymentand old age). While often considered a luxuryavailable only to rich countries, or confined to a small elite in the developing world formallyemployed in the public sector or in large privateenterprises, this perception is now changing asaccess tosocialprotectionexpands inmiddleandlower income countries. Contemporary definitions relevanttodevelopingcountriesgenerallyincludethree main categories of programme. First, non-contributory social assistance programmes aim

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toraisethelivingstandardsofpoororvulnerablepeople through transfers in cash or in kind.Second, social insurance, generally linked toemploymentandoftencontributory(althoughalsofinanced from general tax revenues), provides protection against the risk of income loss dueto life’s normal contingencies. The third domainof social protection consists of various labourmarketpolicies, forexample, to regulateworkingconditionsincludingsafetyandhygiene,collectivebargaining, minimum wage policies and theprohibitionofchildlabour.Althoughtheprovisionof social services is generally considered to be aseparate domain of social policy, the conceptualdistinction between the supply of essentialservices — such as healthcare, education andchildprotection—anddemandsideinterventionsintroduced inpart to enablehouseholds to accesssuch services, is far from clear. Both are criticalcomponents of any system designed to provideminimalsocialprotectiontoapopulation.

Sincetheturnofthemillennium,socialprotectionprogrammeshavebeenenlistedasakeyinstrumentto reduce the incidence and depth of poverty inthe developing world. The objectives of theseprogrammes have expanded beyond the limitedaimsof reducingvulnerability topoverty throughthemanagementofrisk1toencompassthereductionofpovertymorebroadly, includingamongpeoplewho are underemployed or employed informallyin lowproductivityoccupations, and inparticulartotackleitsintergenerationaltransmissionthroughinvestmentsinhealthandeducation.Astheaimsofsocialprotection in thedevelopmentcontexthavebroadened,sohasthereachoftheseprogrammes.Someestimatesclaimthatcloseto1billionpeoplein the developing world are covered by socialassistanceintheformofcashtransfers,withsuchprogrammes operating in at least fifty-two countries (Bender et al. 2013;DFID2011).These transferstake a range of forms — targeted or universal,conditionalorunconditional,categoricallytargetedtransferssuchassocialpensionsandchildsupportgrants, as well as public works or employmentguaranteeschemes.

ForBarrientosandHulme, therapidexpansionof social protection in the developing world

amounts to a “quiet revolution” in which newsocial assistance programmes, largely taking theformof incometransfers,haveoverturnedwidelyheld assumptions concerning the disincentivizingeffectsof transferpaymentsand the incapacityofgovernments to deliver benefits to eligible citizens without serious leakage through corruption orpolitical manipulation (Barrientos and Hulme2008, p. 3). Programmes such as Mexico’sOportunidades, Brazil’s Bolsa Familia, SouthAfrica’s Child Support Grant, the National RuralEmployment Guarantee scheme in India, China’sMinimumLivingStandardGuaranteeprogrammeandIndonesia’sSafetyNetSchemehavenotonlysharplyexpandedthecoverageofsocialprotectionbut are also starting to dissolve the conceptualdistinction between interventions designed tomanage life risks and reduce extreme povertyon the one hand, and those policies designed topromote broader development goals throughimproved access to education, better healthoutcomes, increasedproductivityandeven small-scalecapitalaccumulationontheother.

Partof the impetusfor therevolution insocialprotection policy in developing countries canbe traced to the renewed urgency of tacklingthe problem of global poverty signalled by theMillennium Development Goals. Measurabletargets and deadlines focused the attention ofpolicy-makers and development agencies on acritical set of social issues, challenging the viewthat problems of poverty, ill-health and lackof education would be resolved automaticallythrough growth itself, or could be addressedonly once the “right” economic policies werein place. Implicit in the embrace of new socialprotectionmechanismswasarecognitionthatthedevelopmentpoliciesadvocatedinthe1980sand1990s had failed to make headway in reducingpoverty.Theseso-called“WashingtonConsensus”policies — trade, investment and financial liberalization, privatization of state ownedenterprises, balanced budgets with user feescharged forbasic services, reductionofmarginalcorporateandpersonal taxratesandenforcementof individual property rights — had variegatedeffectsatthenationalandregionallevel.Insome

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cases (including in Southeast Asia) they werecredited with accelerating economic growth atleastbythe1990s,butaccompaniedbyincreasinginequalityandvulnerability; inothers,notably inLatin America, they led to the “lost decade” ofthe1980sandtheanaemicrecoveryofthe1990s.Indeed, despite the return to growth in manyregions by the turn of the millennium, povertyratesremainedpersistentlyanddistressinglyhigh,while the associated rise in measured inequalityweakenedthelinkbetweeneconomicgrowthandpovertyreduction(UNRISD2010).Dissatisfactionwith Washington Consensus policies and the“trickle down” approach to poverty reductionopened the way for a reassessment of directincome transfers and other forms of support forthepoor.SimoneCecchini,inthisissue,describesthe “truly epochal change” in Latin Americanapproaches to social protection since the turn ofthemillennium, inparticular thegrowing roleofnon-contributory programmes and their significant impact on the incomes of poor households andmeasuredinequality.

A critical factor driving this reassessment wastheimpactoftheAsianFinancialCrisis(AFC)ofthelate1990s:eveninaregionthatwasgrowingrapidly,existingformsofsocialprotectionprovedentirely inadequate at a moment of extremeeconomic stress (Cook, Kabeer and Suwannarat2003). Governments discovered that they lackedthe instruments needed to respond rapidly andin meaningful ways to a sudden fall in domesticdemandoccasionedbythelarge,exogenousshiftsin international capital flows. In Indonesia, for example, more than half of the population wasvulnerable to poverty and hunger as food pricesand unemployment skyrocketed in the wake ofthecollapseof thebankingandcorporatesectors.Politiciansandpolicy-makersalsorecognizedthat,while globalization had created opportunities fortradeandinvestment,italsoexposedemerginganddeveloping economies to financial instability as revealedbysuccessivecrisesinMexico,EastAsia,Russia,TurkeyandArgentina,andculminatingintheGlobalFinancialCrisis(GFC)of2008.Policieswereneededtoreducetheriskoffuturecrises,butalsotostrengthenthecapacityofthepublicsector

to minimize the impact of economic shocks onvulnerablehouseholdsandindividuals.

Policy research has subsequently played animportantroleinthequietrevolution,contributingcareful assessmentsof the impactofprogrammeson specific groups of the population. The majority of these studies have focused at the microlevel, concerned with the direct and measurableimpact on beneficiaries or communities of specific interventions.2 Less attention has beenpaid to the systemic effects of social protectionprogrammesandtheirinteractionwithothersocialand economic development policies (related forexample to employment and labour markets, fiscal and monetary policy) at the national level. Theslow accumulation of evidence has nonethelessprovided support for a rethink of the effects ofvarious forms of social protection programmeson consumption and living standards, health andeducation outcomes and fiscal and environmental sustainabilityinawiderangeofsituations.

The experience of the last decade of rapidgrowth of social protection programmes in thedeveloping world provides some grounds foroptimism,but also for caution.Until recently thepreserveofformal(largelypublic)sectorworkers,social protection in some form has now beenextended to hundreds of millions of individualsin the developing world. While most of theseschemes are far from comprehensive, many havebeenshowntoprovidesomeprotectionforcertainforms of risk, or deliver other benefits, such as improvedchildnutrition,oreasieraccesstohealthand education services. Although these earlyresultsareencouraging,therearestillmassivegapsincoverageandmajorimplementationchallenges.The International Labour Organisation (ILO)estimatedin2011thatonly20percentofworkingageindividualsandtheirfamiliesworldwidehaveaccess to comprehensive social security; 20 to60 per cent have only basic coverage and 50 percentremaininasituationofextremevulnerability(ILO 2011). There is also huge variation amongcountriesandregions.

The proliferation of conditional and non-conditional cash transfers, while effective inspecific situations, is not a “silver bullet” that

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can guarantee sustainable incomes or access tohealthcareandeducation.Dynamicpovertystudiesalsoemphasize thatpeople fall back intopovertyfor a wide range of reasons, many of whichare not addressed by targeted social assistanceprogrammes(Baulch2012,p.260).KeetieRoelenarguesinthisissuethatcashtransferprogrammesaregenerallydesigned to lessenbarriers facedbypoor individuals or to create behaviour-changingincentives for them. This suggests a theoryof the causes of poverty that emphasizes thecharacteristicsofpoorpeopleratherthanstructuralbarriers such as a shortage of decent jobs, orpersistentgender, racialandethnicdiscriminationinaccesstoeducationandemployment.Accordingto Roelen, failure to acknowledge the structuralrootsofpovertyinthedesignoftheseprogrammescan have the perverse effect of reducing theinclusiveness of social protection and reinforcingpatternsofpovertyandvulnerability.

Social Protection in Southeast Asia3

The objective of the Asia Policy Forum onPoverty, Inequality and Social Protection was torevisit trends in social protection policy in Asiain the light of international developments, andto see if experiences elsewhere hold interestinglessons for the region’s developing countries,particularlyinSoutheastAsia.Policy-makersfromSoutheast Asian countries made up the largestgroupofparticipantsattheconference,withlargedelegations from Indonesia, Vietnam, Cambodia,Laos,thePhilippinesandTimor-Leste.

Southeast Asia is a region of remarkableeconomic, political and cultural diversity. Itincludes: Singapore, the world’s third richestcountry (according to the International MonetaryFund), and Myanmar, ranked 165th; Muslim,Buddhist and Catholic majority countries; twoof the world’s five remaining Communist-ruled countries;amilitarygovernment;andparliamentaryand presidential democracies that vary widelyin their acceptance of rule of law, freedom ofexpression and tolerance of ethnic, religiousand political minorities. As one would expect,approaches to social policy and social protection

vary enormously from country to country, andevenwithincountries(Cook2009).Yetwithinthisoverallcontextofdiversity,somecommontrendstowards the expansion of basic social protectioncan be identified.

Southeast Asian countries are sometimesgrouped with East Asian “developmental states”(Japan, South Korea, Taiwan) which maintaineda low level of spending on welfare but withsocial policies being used in the overall pursuitofeconomicdevelopment(Kwon2005,p.2).Theresult was an initial focus on contributory socialinsurance programmes, household savings anduniversalaccesstoeducation.Thepoliciesofthesecountrieshavealsobeendescribedas“productivist”inemphasizinginvestmentineducationandpublichealthasunderpinningsofeconomicdevelopment(WoodandGough2006,p.1706).However,thesegeneralizations are often misleading, as policyhas varied as a result of differences in politicalideologyandstructures,politicalmobilizationandinstitutionalcapacity.

SoutheastAsian countries have also been heldup as an example of the poverty-reducing effectsofeconomicgrowthandmarket-friendlyeconomicreforms.Indonesia,oneofthepoorestcountriesintheworldinthe1960s,wasapplaudedbytheWorldBankforachievingrealgrowthrates inexcessof6percentperannumoveraperiodofthreedecades,and on this basis reducing the official poverty rate from 60 per cent in 1970 to 17 per cent in1987 (World Bank 1990, p. 1).After Indonesia’sfall from grace with the AFC, it was Vietnam’sturn to assume the mantle of “poster child” forrapid growth and poverty reduction (“Half-Wayfrom Rags to Riches”, 2008). According to thegovernment, the official headcount poverty rate fell from 58 per cent in 1993 to 14.5 per cent in2008(VietnamAcademyofSocialSciences2011,p.1).ThepaceofpovertyreductionhasstalledinVietnam as well, however, following a domesticbanking crisis, brought on in part by prematurefinancial deregulation (World Bank 2012). While the achievements of these countries were indeedimpressive,sharpreductionsinheadcountpovertyrates inbothcaseswereproducedon thebasisofextremely low official poverty lines. Moreover,

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both examples demonstrate the risks to livingstandards associated with financial liberalization policies that were a core component of theWashingtonConsensuspoliciesoftheera.

As noted above, the AFC was an importantmilestone in the evolution of social protectionpoliciesintheregion.Affectedcountriesfoundthattheirbadlyfrayedsocialsafetynetswereinadequateto cope with the sudden fall in employment andprice rises that followed currency devaluationand financial collapse. Emergency subsidy and transferprogrammeswerequicklyput inplace inanattempttomoderatetheimpactofthecrisisonliving standards. There was renewed interest insocialassistanceprogrammes,andthismomentumwas sustained through the subsequent recoveryandintotherecentGFC.TheAsianDevelopmentBank’s Social Protection Index (SPI), introducedin 2005, reflects the growing recognition in official circlesthateconomicgrowthisanecessarybutnotsufficient condition for poverty reduction.

As one would expect, the countries of theregion have sought to institutionalize socialassistance programmes in different ways. Thepast decade has seen an expansion of targetedsocial assistance in most countries: Indonesiafor example has formalized and extended theadhoc safetynetprogrammesput inplaceat thetime of the crisis. Elsewhere we have seen thefurtherdevelopmentofsocialinsuranceatthecoreof the system (as in China), and trends towardsuniversalism, particularly in Thailand through itsnon-contributory health and pension programmes(see, for example, Hardjono and Sumarto 2010;Chongsuvivatwongetal.2011;Kwon2009).

Table1summarizesthemainfeaturesofsocialprotection programmes in eight countries in theregionwithregardtopovertyreduction,healthcarefinancing, pensions, education and unemployment insurance. In the interests of brevity, the tableincludes only the largest programmes in eachcountry, and in so doing does not capture thetremendous multiplicity of approaches to socialassistanceandprotectionpursued ineachcountryas governments have attempted to respond to theneeds of diverse populations. Nevertheless, asa first approximation of the structure of social

protection policies, the table does reveal somesimilarities across the developing countries ofthe region. Social insurance programmes arestill concentrated on the formal — and largelypublic — sector, supplemented in middle-incomecountrieswithvoluntary,contributoryprogrammesfor small enterprises, farmers and the informalsector. Healthcare financing remains heavily dependentonuserfeeswithmeans-testedsupportforthepoor.Socialassistanceislargelydeliveredthrough safety net programmes that are eithermeans-tested, geographically targeted or both.Fewcountriesprovideanyformofunemploymentinsurance.

Thailand is the most notable exception to thisgeneral pattern of targeting and user fees. Theintroduction of two universal, non-contributoryprogrammes has greatly expanded socialprotection coverage. The Universal CoverageScheme(UCS)hassince2001provideduniversalaccess to healthcare including general medicalcare, in-patient care and rehabilitation services.TheNon-contributoryAllowanceforOlderPeople(initiallyknownastheuniversal500bahtscheme)introduced in2008providescashpayments toallcitizens sixty years of age and older who do notreceive other public pensions. Monthly paymentshavesincebeenincreasedovertheinitial500bahtlevel and a graduated schedule has been adoptedthat increases benefits for older recipients. A separate non-contributory scheme has also beenimplementedforpeoplewithdisabilities.

Indonesia’sNationalSocialSecurityLawenactedin 2004 calls for universal health, workplaceaccident and injury, death benefits for survivors and pension coverage implemented throughseparateprogrammesforthepoor,self-employed,formal sector workers and civil servants. AsMRameshshowsinhiscontributiontothisissue,anotherimportantmilestoneinIndonesiawasthedramaticexpansionofsocialassistancein2005inthewakeofareductioninnationalfuelsubsidies.UniversalhealthcoveragewaslaunchedinJanuary2014,withotherprogrammes tocomeonstreamin 2015. In a departure from past practice, thevarious institutions responsible for administeringsocial protection programmes have been brought

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under a single agency, the Coordinating Bodyfor Social Protection. Existing health insuranceproviders for formal sector workers, the poor,civil servants and the military will be rolledinto a single agency, Asuransi Kesehatan(ASKES), which has been given responsibilityfor expanding coverage tohalf of thepopulationthat currently does not have access to any formof health insurance. The size of the task facingthe government is compounded by the absenceof healthcare facilities in many poor and remotelocations,thelowdensityofhealthcareprovidersbyinternationalstandardsandthelowstandardsofprovisioninpublicclinicsandhospitals(HeywoodandHarahap2009;NiimiandChatani2013).Percapita expenditure on social protection remainslowbyregionalstandardsasshownbytheresultsofADB’sSocialProtection Indexas reportedbyRamesh in this issue. For example, only 12 percentoftheworkforcehasaccesstopensions,andmostoftheseparticipationsareonlyeligibleforasingle,lump-sumpayment.

Ramesh compares the systems in Indonesiaand the Philippines and finds many similarities andsome importantdifferences.Chiefamong thedifferences are the higher levels of governmentexpenditure in the Philippines, but also greaterinequality in both social insurance and socialassistance programmes. While financing of social protectionremainshighlycentralizedinIndonesia,localgovernmentinthePhilippineshasbeengivenresponsibility for the programmes but not thefinancial or administrative resources to implement them.

While official poverty lines are low throughout theregion,whichhasthepoliticallyusefuleffectofgeneratinglowheadcountpovertyrates,theWorldBank’sUS$2adaypovertyline(atpricesadjustedfor purchasing power) reveals that the incidenceof poverty is still in excess of 40per cent of thepopulationintheregion’slargestcountries(Figure1). The extent of informality in the labour forcemeans that social protection in these countriesstill depends heavily on social assistance andthat social insurance remains confined to a small minority of workers. Poverty is prevalent in theregion’s low-income countries, Myanmar, Laos,

Cambodia andTimor-Leste, which rely primarilyondonor-assistedprogrammes.

InSingaporeandMalaysia,thecountriesatthetop end of the income ladder, social protectionrelies primarily on personal savings and familysupport networks, while government support ischannelledtowardspublicprovisionofhealthandeducation services, consistent with a productivistcharacterization.Bothcountriesoperateprovidentfunds that trace their roots back to the Britishcolonial period. Social assistance programmesare small and reserved largely for people withdisabilitiesandtheelderly.

Publicsupportforhealthandeducation,however,is uneven in the rest of the region.As a shareofGDP, the Indonesian government spends less onhealthcarethanaid-dependentCambodiaandLaos(Figure 2). Outcomes broadly reflect the level of public contribution. To take a telling example,Indonesia’s maternal mortality rate in 2010 was220 per 100,000 live births, or about four timesaslargeastherateinVietnamdespitethefactthatIndonesia’sincomepercapita(inpurchasingpowerparity terms) was about one-third higher (Figure3).Worryingly,theresultsoftheIndonesia’s2012Demographic and Health Survey (DHS) indicatea sharp rise in the maternal mortality rate to359, or six times the level in Vietnam (Kompas2013).Whileitistooearlytoknowwithcertaintywhether this increase represents a statisticalanomalyor agenuinedeterioration in conditions,the fact remains that for a range of basic healthand education indicators, Indonesia continuesto underperform countries at similar and lowerlevels of income per capita. Public spending onhealth remains the lowest in the region despite asignificant rise since the turn of the millennium.

Thailand,despitebeingthethirdrichestcountryintheregion,hasmaderelativelyslowprogressinextendinguniversalaccesstoeducationbeyondtheprimary level.The share of women in the labourforce who have completed secondary educationwas only 11.5 per cent in 2010, a small fractionof the level recorded in neighbouring Malaysia,and much lower than the Philippines despite anaveragepercapita incomeof roughlyhalf thatofThailand (Figure 4). However, Thailand’s efforts

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FIGURE1PovertyHeadcountRatioatUS$2perdayinPurchasingPowerParityTerms(2010)

Source:WorldDevelopmentIndicators.

FIGURE2PublicSpendingonHealthasShareofGDP

Source:WorldDevelopmentIndicators.

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toincreaseaccessoverthepasttwodecadeshavebegun to pay off. The female secondary schoolenrolment rate is now about 80 per cent, on parwith the Philippines and Indonesia, and higherthanMalaysia,where the ratewas72per cent in2010.4

Vietnamhas sharply increasedpublic spendingonhealthandeducationinrecentyears.Thecountryemergedfromcentralplanning in theearly1990swithaneconomyhobbledbyyearsofwar,isolationandfailedexperimentsincollectivizedagricultureand industry, but also with a deeply ingrainedpolitical tradition emphasizing the government’sresponsibilitytoimprovethelivingstandardsofthepoor,particularly in ruralareas.Access tohealth,education and basic infrastructure (electrification and roads) is superior in Vietnam compared tomany richer countries in the region.Vietnam hasenjoyed considerable success in a range of basicindicators of well-being, including a reduction inthe headcount rate of poverty. Nevertheless, likeother countries in the region, Vietnam remains

heavilydependentonuserfeesforaccesstohealthand education services and, unlike Thailand,favourstargetingoveruniversalisminthedeliveryof social assistance. Sharply rising out-of-pocketcosts despite relatively high levels of publichealth spending are an indication of mountinginefficiencies in health financing (UNDP 2011).

Common Challenges

Globalization has delivered substantial benefits to Southeast Asia’s export-oriented economies. Theregiondoubleditsshareofworldexportsfrom3.3percentin1986to6.7percentin2012,andnearlytripleditsshareofworldmanufacturingvalueafter1990. Southeast Asia has also had a direct andtraumatic experience of the risks associated withinternationaleconomic integration,particularlyoffinancial markets. The AFC was a stark reminder thatcapitalcanexitinvolumesandwitharapiditythat can destabilize even healthy economies,and that emerging economies are particularly

FIGURE3IncomePerCapitainPurchasingPowerParityTermsandMaternalMortalityRate(2010)

Source:WorldDevelopmentIndicators.

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vulnerable to largeswings insentimentonglobalfinancial markets. The GFC showed that even when emerging countries keep their own financial houses in order they are susceptible to contagioneffects arising from financial fragility elsewhere: SoutheastAsia’s export markets shrank suddenlyandominouslyasdemandcollapsedintheUnitedStates and Europe. Economists have been awareof a positive correlation between trade opennessand social protection coverage for some time, arelationship that suggests that demand for socialprotection increases with the share of the labourforce engaged in trade-related activities (Rodrik1997, p. 26). At the same time, pressures fromglobal financial markets — at times reinforced by policy advice and conditionality from aid donors—canwork tonarrow thespace forautonomousnationalpolicy-making.

The rich countries have not made it easier forregions like Southeast Asia to balance the benefits and risks of globalization. The Millennium

Development Goals have increased awarenessthat poverty in the developing world is a globalproblem that requires global solutions. Official developmentassistancerosefromUS$84billionin2000toapeakofUS$137billionin2010,bothinconstant2011U.S.dollars,althoughevenattheselevelsdonornationsarestillfarfromachievingtheUnited Nations Official Development Assistance (ODA) target of 0.7 per cent of GNI. Howeverinother spheres the richnationshave shown lessappetiteforrisksharing.Thegapbetweenrhetoricand policy change is most glaring in attitudestowards migrant workers. Only 47 out of 193UN member states have ratified the International Convention on the Rights of Migrant Workersand Their Families in the ten years since theconvention was promulgated. None of the maindestination countries — member countries of theEuropean Union, the United States and the Gulfcountries — have ratified the convention. Overseas employment is the most direct experience of

FIGURE4ShareofWomenintheLabourForceWhohaveCompletedSecondaryEducation(2010)

Source:WorldDevelopmentIndicators.

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globalization formillionsofFilipino,Vietnameseand Indonesian workers, and the failure to makeprogress in endorsing basic protections for thesepeopleandtheirfamiliesisdeeplyrevealingoftheinternationalcommunity’spriorities.

An important common challenge in SoutheastAsia is rapid urbanization and protecting rural tourbanmigrantsfromriskstotheirhealth,safetyandeconomicwell-being.Theshareofthepopulationliving in urban areas has increased sharply, moststrikingly in Indonesia since 1990 (Figure 5).Despitethesharpaccelerationinmigration,anditscloserelationshiptogrowthandpovertyreduction,most governments have not made migration acentral concern of economic policy and planning(de Haan 2006). One recent overview of therelevantAsianliteratureconcludesthat“migrationwithincountries,particularlythatlinkedtosearchfor livelihood, has failed to motivate researchersandpolicy-makerstogeneraterobustdatasetsandundertake rigorous empirical studies, which maybe held responsible for the lack of integration ofspatial mobility of labour with … development

economics”(Kundu2009,p.53).Oneresultisthatofficial statistics grossly underestimate the extent of urban poverty in the region.According to theIndonesian authorities the headcount poverty ratein Jakarta was 3.5 per cent of the population in2011. The corresponding figures for Manila (2009) and Bangkok (2007) were 2.6 and 1.5 per cent.5The urban poverty rate for Vietnam as a wholewas3.3percentin2008,accordingtotheGeneralStatistics Office. Figures such as these, which any casual visitor to these cities would immediatelyrecognize as a serious underestimation of theincidence of poverty, can only be obtained byexcluding large numbers of poor people fromofficial surveys. Yet the statistics themselves serve to reinforce the perception among policy-makersthatpovertyisapredominantlyruralphenomenonandthatmigrantsarearelativelywell-offsegmentofthepopulation.

Low estimates of urban poverty reflect a perception,atleastinpartimportedfromeconomictheory, thatmigration is avoluntaryact inwhichindividuals maximize returns to labour based on

FIGURE5UrbanPopulationasPercentofTotal

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a rational calculation of risks and rewards. Thereal experience of migration rarely conforms tothesimpleassumptionofthesemodels.Well-paidformalsectorjobsarescarce,andgenerallyarenotopen to migrants lacking qualifications or personal connections.Mostformalsectorjobsdonotdiffermuchfrominformalsectoremploymentintermsofcharacteristicsthatmattertoworkingpeople,suchas the duration of employment, hours of work,wages, safety and other benefits. For workers enteringregionalandnationalcasualwagelabourmarkets, the decision to move reflects an absenceof viable choices rather than a rational weighingofalternatives.Poorpeoplemovewhentheyhaveexhaustedtheirlocaloptionsandarecompelledtofind new sources of income to meet their own or theirfamily’ssubsistencerequirements,topayoffdebts or to finance essential spending on health, education or other necessities. Their desperationmakes them vulnerable to traffickers and other fraudsterswhopromisehigh-wageemploymentinexchangeforanupfrontpayment.Enforcementof

labourmarketregulations,conditionsofworkandminimum wage regulations are vital componentsof social protection policies for migrant workers(UNDP2009).

AsherandBalipointoutthatinsomeSoutheastAsian countries, notablySingapore,Thailand andVietnam, the speedof thedemographic transitionimplies that dependency ratios will rise sharplyoverthenextthreedecadesasthepopulationages.The fall in fertility ratesbelow replacement levelinThailandandVietnamatrelativelyearlystagesof development raises the urgency of expandingcoverage of social insurance programmes andcreating incentives for private saving (Figure6). According to World Bank projections, in2050 about 25 per cent of the population will besixty-five years of age or older in Singapore and Thailand,andover20percentinVietnam(Figure7).ILOstatisticsindicatethatonly22and21percentofthelabourforceiscurrentlycontributingtoapension inThailandandVietnam, respectively.6Both countries must assign a high priority to

FIGURE6FertilityRate(BirthsPerWoman)

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FIGURE7ProjectedShareofthePopulation65YearsofAgeandAbove

Source:Authors’calculationsfromWorldBankHNPStatistics.

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2010 2015 2020 2025 2030 2035 2040 2045 2050

Singapore Malaysia Thailand

Indonesia Phiippines Vietnam

increasing this ratio over the next decade. Inaddition, widening access to health insurance inVietnamandinvestmentinlong-termcarefacilitiesinbothcountrieswillbeneeded.

Asher and Bali discuss various options thatgovernments in the region have to increase fiscal space to cope with demographic change andrising demand for social protection. The authorsidentify possible efficiency gains from improved administration,coordinationbetweenpensionandhealthcare systems and investment in preventivehealthcaremeasurestoencourage“healthyageing”.Labour force participation, for example femaleparticipation rates, average age of retirementand the inclusion of migrants in national socialprotectionsystems,arealsoimportantfactors.

Women in most countries in the region faceeconomic challenges from a combination of highlabour force participation rates, the gendereddivision of labour and cultural expectations thatwomentakeprimaryresponsibilityforcaregiving

and domestic work. This “double burden” oftenlimits women’s employment outside of the homewhere they are founded predominantly in low-paying, informal or part-time jobs in order tocombineothercareroles(withinthehousehold,forchildrenandtheelderly,andthesick).ADB’sSocialProtection Index reveals that women in ASEANare less likely to take part in social insuranceprogrammes because of lower participation ratesin formal sector employment. Social protectionprogrammes often reinforce traditional genderroles and can disadvantage women by imposingadditional time burdens on them, thus furtherreducing their labour market access (Holmesand Jones 2010). Social protection programmesin general have paid insufficient attention to the provision of services and other measures thatcould reduce the care burden on women. Otherlabourmarketpolicies,toreducediscriminationinthelabourmarket,promotefemaleemploymentinthepublicsector,andimproveworkconditionsin

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thecareeconomy,couldcontributetochallengingpersistent forms of gender inequality as wellas reduce poverty by enabling women in poorhouseholdstoaccessmorestableemployment.

At a more general level, Southeast Asiancountries have yet to integrate social protectionpolicies into broader strategies of social policyand economic development. Social protectionhas remained largely a separate sphere as aninstrument to manage the risk of falling intopovertyduetoshocks.Inmostoftheregion,socialprotection is limited to crisis response throughminimal safety nets. By contrast, the experienceofsuccessfuldevelopmentalstates(fromnorthernEurope to East Asia) has shown that countriesthatachievedsustainedreductionsinpovertyuseda broader range of social policy instruments tosupport processes of accumulation, production,social reproduction and distribution (UNRISD2010).AsCecchiniremindsusinhiscontributionto this issue, the most important factor in LatinAmerica’srecentsuccessinreducingpovertyandmeasuredinequalityisthegrowthofformalsectoremploymentandrisingwagesamongtheemployed.Non-contributory social protection programmeshaveexpandedthereachofwelfaresystemsintheregion,and indoingsohaveplayedan importantrole. However, sustainable reduction of povertyand inequality depends on the implementation ofpolicies to promote the creation of steady, highproductivity jobs that pay workers a living wageinasafeandsecureworkenvironment.

Several authors in this issue, notably Roelenand Cecchini, reflect on the relationship between social protection and the enunciation of socialrightsbasedoncitizenship.Socialprotectioninthedevelopingworld—inAsiaasinLatinAmerica—has evolved from disparate, often narrowly defined programmes introduced to serve different socialgroups ranging from relatively privileged publicsector workers to rural people living in remoteareas.Theresultingsystemsareoftenfragmentedand exclusionary, reinforcing divisions based onclass, gender, ethnicity and geography. Rights-based approaches to social protection have thepotential to promote social cohesiveness throughthearticulationofanethosofinterdependencethat

extends beyond ethnicity, religious communityandclass.Thus,theimplicationsofarights-basedapproach to social protection extend beyond theimmediateeconomicaimsofreducingpovertyandinequality,apointthatisnotlostonSoutheastAsianpoliticalleadersseekingtobuildstablegoverningcoalitions in culturally diverse and rapidlychangingsocieties.Therecognitionofsocialrightsalso provides a basis on which individuals andcommunities can articulate political demands forredistributive policies and, of equal importance,accountability and transparency in the use ofpublicresources.However,rightsarenotgranted;theyaredemandedandprotectedthroughpoliticalaction.Importantquestions,notaddresseddirectlyinthisissue,pertaintotherepresentationoflabourandothersocialgroupsinSoutheastAsia’syoungdemocracies,andtheextenttowhichsocialrightscan inspire collective action among groups withshared economic interests but competing ethnic,religiousandgeographicloyalties.

Conclusion

This policy focus issue includes four originalarticles originally presented at the HarvardKennedy School Asia Policy Forum on Poverty,Inequality and Social Protection held in JakartainMay2012.Themainaimof theForumwas tobringtogetherscholarsandpolicy-makersfromtheregiontodiscussrecenttrendsinsocialprotectionpolicy,comparetheexperiencesofAsiaandotherregions,andidentifyfruitfuldirectionsforfurtherresearchanddialogue.

A confluence of global, regional and national-levelfactorsdiscussedinthisintroductoryessayhascombinedtostimulateinterestinsocialprotectionpolicyinSoutheastAsia.Political leadersandthewiderpublicweredeeplyscarredbytheexperienceof the 1997–98 Asian Financial Crisis, whichtragicallyrevealedthegapsinregion’spreviouslyuntested social safety nets. Growing recognitionof the need to strengthen social protection in theregion coincided with a global reassessment ofthe role of social assistance in reducing poverty,reversing prevailing assumptions about thedisincentive effects of income transfers and the

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capacity of government agencies to deliver cashbenefits without leakage or political manipulation. The result has been a blurring of the conceptualdistinction between social insurance and anti-poverty programmes. New initiatives haveproliferated across the region, many of whichendeavourtoexpandaccesstosocialinsuranceandessential services beyond formal sector workerswho still comprise aminorityof the labour forceinmostASEANcountries.

In viewof the region’s tremendousdiversity itisnotsurprisingthattheprogrammaticinnovationsresponding to these regional and global influences have taken highly variegated forms. Singaporeand Malaysia have maintained their traditionalemphasis on household savings and providentfunds, while Indonesia and the Philippines havedisplayed a willingness to experiment withnew models, although limited funding of theseinitiativeshavelimitedtheircoverageandimpact.Thailand’s embrace of universalism is the most

far-reaching policy reorientation in the region,althoughthedistributionalimpactofthesereformsis politically contested. Vietnam has sharplyincreasedspendingonsocialprotectionandbasicservicesbutquestions remain as tohowmuchofthese resources reach the intended beneficiaries.

As several contributions to this issue havestressed, social protection is still largely viewedas a separate policy sphere that has yet to beintegrated into national economic and socialdevelopment strategies. This in part reflects short-term fiscal constraints, but also deeper questions about political representation in post-authoritarian Southeast Asia and, more broadly,thenatureofcitizenshipinsociallyandethnicallydiversesocietiesandinanincreasinglyglobalizedworld. These important political and sociologicalquestions were not directly addressed at theAsiaPolicyForumbuttheypointtoproductiveavenuesfor new research and opportunities for policydialogueintheregion.

NOTES

TheauthorswouldliketoacknowledgetheexcellentresearchassistanceofEsunaDugarova.1. TheWorldBankpromotedits“socialriskmanagement”(SRM)approachattheturnofthemillenniumaiming

toenhance thecapacity tomanageshocksandpromoteentry intoriskierbuthigherreturneconomicactivities(HolzmannandJorgenson2008);seeGuenther,HudaandMacauslan(2007)foracritiqueofSRM.

2. Anextensivesetofevaluationstudiesofprogrammesnowexist.Fewerstudieshaveexaminedeconomywideorsystemseffectsortheprocessesofestablishingandinstitutionalizingsocialprotectionprogrammes.

3. TheSoutheastAsianregionencompasses the tenmemberstatesof theAssociationofSoutheastAsianNations(ASEAN-10).DataforMyanmarandTimor-Lestearenotavailable.

4. AllenrolmentdataobtainedfromtheWorldBank’sWorldDevelopmentIndicators.5. Urbanpovertyestimatesareavailablefromthewebsitesoftherelevantstatisticalauthorities:<http://www.bps.

go.id/>forIndonesia;<http://web.nso.go.th/>forThailand;and,<http://www.census.gov.ph/>forthePhilippines.In addition to under-sampling of the poor, poverty estimates in urban areas are distorted by under-estimationof essential non-food expenditures, most notably water, sanitation, housing, transport, health and education(Satterthwaite2004).

6. SeetheGlobalExtensionofSocialSecurity(GESS)website<www.ilo.org/gimi/gess>.

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