COVID-19 long term recovery plan needs to focus on social protection for all

25 October 2020
COVID-19 long term recovery plan needs to focus on social protection for all
A volunteer from Clean Yangon carries food to give low income people from a slum area in Yangon, Myanmar, 05 April 2020. Photo: Nyein Chan Naing/EPA

Countries across the globe, including Myanmar, are facing the twin challenges of rebuilding the economy and containment of the COVID-19 pandemic simultaneously.

For Myanmar, steps towards formulation of economic recovery and reform plans for the long term are underway, even as the country continues to combat the COVID-19 pandemic tackling what has been referred to as “second wave” infections.

Steps taken so far reflect a quick and pragmatic approach of the government to protect the economy and society while enforcing public health measures to contain the pandemic. With the short term economic recovery plan, the government has already spent approx. US$3 billion, in terms of social assistance to the vulnerable population and also relief support to small enterprises and tax incentives to the affected firms.

A more comprehensive plan, which is under preparation, is expected to address the transformations required in terms of galvanizing the investment of the private sector, sustainable resource use, agriculture, infrastructure investments, reforms in areas like public services delivery, and benefiting from the changing global and regional export and trade dynamics. Details of this plan are awaited.

Be that as it may, for achieving a comprehensive and inclusive development in tandem with the sustainable development goals, it is important to accommodate the views and perspectives that emanate from the global policy circles.

Two recently released reports that reinforce the centrality of social policies for addressing hunger and inclusive social development becomes relevant in this context. One is the ‘Global Hunger Index 2020’ (GHI) report, an annual assessment prepared by two reputed international INGOs viz., Concern Worldwide & Welthungerhilfe, and the second one is ‘The Protection We Want; Social Outlook for Asia and Pacific,’ a report from UN Economic and Social Council for Asia and Pacific (UNESCAP) and the ILO.

Insights from these would provide valuable pointers for Myanmar to calibrate its long term response to the COVID-19 pandemic in achieving zero hunger and Myanmar’s sustainable development goals. The coming ten year period, 2020-2030, is crucial for Myanmar tis it hopes to transition into the middle income category with an all round and inclusive development policies.

Hunger Index

Assessing the situation across the globe, GHI report points out “COVID-19 has made it clearer than ever that our food systems, as they stand, are inadequate to the task of achieving Zero Hunger. The unprecedented disruptive force of the

pandemic has once again laid bare the fragility and inequities of our current globalized food systems, the threat to global health and food security posed by increasing human impacts on the environment and wildlife, and the need to address these challenges in a holistic, ambitious way.”

Will the crisis be turned into an opportunity? That question begs answers from the political leadership of the countries. Myanmar appears to be on the cusp of this political challenge in terms of accelerating inclusive reforms that would benefit vulnerable populations. For this, social policies are crucial.

The GHI report points out that efforts of the countries in reaching zero hunger goals is too slow or even being reversed in some countries due to COVID-19 which puts populations of many countries under severe strain in term of access to food.

“Fragility of local and global food systems has been exposed by the pandemic and it requires a holistic approach to seek health and food policies.” The need for reshaping food systems and policies is emphasized in the report.

Myanmar Score

Where does Myanmar stand with respect to the Global Hunger Index? Over the years there appears to be an improvement in terms of Global Hunger Index Score over the past one decade. While its score in 2000 is reported as 39.8, it has reduced to 20.9 in 2020 and stands at the 78th rank out 107 countries for which the index is calculated. It is considered a serious level of hunger just above the alarming level.

The country stands well above the average of East and South East Asia region in terms of the hunger index with the regional average stands at 9.2; though it fares better when compared to the average of its south Asian peers (26.0). When it comes to disaggregated indicators, over 14.1% of Myanmar population are undernourished in 2017/19; wasting among children under 5 stands at 6.6% in 2015/19; prevalence of stunting among children under 5 stands at 29.4% in 2015/19. All these indicators reflect that Myanmar needs to address the hunger and child vulnerability on an urgent basis in order to achieve the zero hunger goal which is part of the SDG.

Integrated Approach for Food systems

While cautioning the unfolding multiple crises due to COVID-19, the GHI report is hopeful that countries would be able to meet the zero hunger goals with renewed efforts and dedicated resources. It points out that “…by taking an integrated approach to health and food and nutrition security, it is possible to achieve Zero Hunger by 2030. To do so, we must design responses to the current crises and their underlying causes and move forward in ways that support the transformation of the current food system to one that is more inclusive, sustainable, and resilient.”

Myanmar needs to accommodate these aspects into its long term recovery plan.

Social Protection- Primary Line of Defence

From the perspective of inclusive development and reaching the SDG goals (that includes zero hunger) and overcoming COVID-19 impact, UNESCAP&ILO in their report identifies well functioning social protection as a first line defence. It describes social protection as support against shocks, and acknowledges that the COVID-19 pandemic, similar to the financial crises in 1997 and 2008, has demonstrated how a well-functioning social protection system can protect individuals and economies by acting as a social and economic stabilizer in times of crisis. “To address the social, economic and health impacts of the crisis, which has disrupted supply chains, global demand and economic financial stability, many countries have strengthened existing schemes and introduced ad hoc social protection measures. Yet well-resourced social protection systems built over time are far better equipped to respond to the unexpected and shield the most vulnerable.”

To its credit, it should be acknowledged that Myanmar, though it has a very modest social protection system, was able to respond to help large sections of vulnerable population through one time cash transfer to the families affected and to the SME firms during the lockdown period. The CERP, which has significant portion of social assistance has been pegged at about 3.4% of the GDP, though the conventional social protection programmes in Myanmar receive less than one per cent of GDP as budgetary support.

The need to strengthen social protection comes out strongly as a response to the long term recovery and reform planning. UNESCAP&ILO report points out “the pandemic is aggravating underlying ills. The region’s extensive gains in economic growth in recent decades have not led to proportionate gains in the population’s well-being. Many countries face high levels of inequality, both in outcomes and opportunities, which the pandemic has exacerbated. Poverty rates are stubbornly high in some countries and the pandemic risks reversing progress towards poverty reduction by almost a decade. Social protection systems are necessary to shield people’s incomes and well-being as well as retain social development gains.”

Social Protection in Myanmar

Although Myanmar has developed a social protection sector strategy paper with life cycle approach way back in 2014-5, there has not been serious efforts to implement and expand the coverage since then. According to the analysis, the level of social protection which comes to 0.8% of GDP is too low to be effective.

Much of what goes in the name of social protection covers the public sector workers and there is very little in terms of social protection that is universal in nature, covering large informal sector workers and their families, even when it comes to social pensions, unemployment assistance, or universal health assistance. In most countries of the region, it remains a marginal area of public policy. It is to be noted that for the first time during the COVID-19 pandemic, a model of one time universal cash transfers has been attempted in Myanmar which reached close to 20 million of the population. Given the large informal sector, reaching to them in periods of crisis through unemployment allowance, cash for work programmes, health insurance, and old age pensions can form the core of social protection.

For addressing hunger and malnutrition the need for investing in food and health system improvements as well cash transfer programmes for pregnant mothers and children below two years as social protection have been proven effective. Myanmar has very little coverage of such mother and child focused social protection. In fact throughout the Southeast Asia region, coverage is low for such schemes. Similarly disability pensions, old age pensions coverage is also abysmally low across Southeast Asia including Myanmar. All these reflect the need for augmenting a systematic social protection that would cover the population from shocks and vulnerabilities.

Very high levels of out of pocket expenditures for health by the people is a challenge in Myanmar which forms the major portion of household incomes and pushes them into further debt and vulnerability. Along with augmenting health infrastructure, the need for universal health insurance coverage for all is advocated which would work as a health protection for millions.

Fiscal Space

The UNESCAP&ILO report acknowledges that it is fiscally possible and feasible for most developing countries to fund social protection investments within the budgetary resources. The report argues that the fiscal space is available and the scope for increasing domestic resources through tax base expansion and tax administration reforms are also possible solutions.

As the report states, “Countries in the region have significant potential to increase tax revenues. The region has among the lowest tax-to-GDP ratios globally and only a minority of these taxes come from wealth, profits, property and financial returns. It is estimated that by simply improving national tax administrations, countries such as Myanmar and Tajikistan, could increase tax revenues levels by 5–8 per cent.”

This is in fact the same solution offered by the recent World Bank report as well. It is time that Myanmar government addresses the progressive tax reform agenda with urgency in order to augment domestic resources for social protection.

The UNESCAP&ILO report advocates that “investing in social protection now will support a stronger recovery and lay the foundations of a resilient and inclusive future for all” and “The COVID-19 crisis could serve as an opportunity to strengthen long-term social protection systems, supporting households, businesses and the wider economy to recover faster than they might do otherwise.”

Further, it states “Building a social protection floor is affordable for almost all countries, as this report has shown. Easy to-introduce universal benefit schemes, such as child benefits schemes and social pensions, usually have a rapid, direct and significant positive impact on efforts to alleviate poverty and inequality.”

The central message is that social protection works for all and is affordable. It is high time that Myanmar policy makers heed this advice and create social protection systems that would lead to inclusive development of the country.

It would mean developing universal systems along the life course of people as part of the national social contract between the State and its citizens, with inclusive and gender responsive schemes, higher resources for SP and labour market interventions. It is also important to take complimentary measures that would transition the informal economy into formal economy with SP program designs to accommodate such a transition. Use of digital technology and innovative delivery mechanisms can also augment system efficiencies. Efforts towards meeting the social protection needs of the ‘missing middle’ is also emphasized as the vulnerabilities of those just above the poverty have been exposed during the COVID-19 pandemic in terms of job losses and economic disruptions.

Ultimately it comes down to political will in recognizing that the COVID-19 pandemic has shown the need for social solidarity not only to address the health impact of the pandemic but also for long term sustainable development.