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Social security
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Boosting development through social protection
More than one billion people live in extreme poverty. Strokes of fate like illness, accidents, unemployment and harvest losses can plunge them into destitution. Social security systems help reduce poverty and encourage long-term social and economic development.
They should
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save people from hardship,
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cushion the blow when a personal crisis or financial hardship strike,
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strengthen on a permanent basis the capacity of poor people to help themselves to cope with crises, and
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support people living in extreme poverty and those unable to support themselves, and enable them to lead a life of human dignity.
Security systems developed in Europe are not, however, readily transferable to developing countries. One challenge, for example, is to incorporate the large number of people employed in the informal sector. Small-scale farmers, peasant labourers, domestic staff and small trades people are often not covered by the existing social networks.
Germany’s development cooperation tackles various levels of social security systems. The main ones are outlined below.
Health insurance
More than 1.3 billion people in the world have no access to adequate and affordable health insurance. Almost ten million children die each year from avoidable or treatable diseases. One hundred million people fall below the poverty line each year because they are not insured against sickness costs.
It is essential to the very survival of the poorest of the poor that they should be properly treated when they fall ill, thus safeguarding their ability to work in the long term.
Social health insurance provides the entire population of a country with solidarity-based, equitable access to health services. Each individual pays according to his or her own means. The result is a redistribution from the healthy to the sick, from younger people to older people, from the employed to the unemployed and from the better off to the socially weak. The system is supplemented by state subsidies for the poorest sectors of society.
Basic social security
Poor people who have suffered sickness or an accident or have lost their harvest are often forced to adopt strategies that are detrimental to development in order to survive. They economise on food, impairing their health and ability to work. Instead of attending school, their children have to work. Machinery, seed or other means of production are sold and are then no longer available for crisis management.
Basic social insurance enables people to steer clear of the downward spiral of poverty and strengthens their ability to help themselves. Basic insurance programmes mainly benefit extremely poor households and highly vulnerable groups such as women, children, the elderly and people with disabilities. In many cases, financial support is contingent upon the fulfilment of certain obligations, such as sending the children to school or making regular visits to the doctor. In such cases we speak of conditional basic protection programmes.
In many countries of Latin America in particular this type of social transfer programme has proved highly effective in reducing poverty: school attendance and take-up of preventive medical examinations have seen a striking increase.
Job and income security
Income security is an important basis for the social security of the economically active population and their dependants. Only those who can be sure of having enough to live on can safeguard themselves self-reliantly against risks. German development cooperation therefore also promotes the introduction of unemployment insurance and target-group-specific employment programmes.
Germany’s work in the field of social protection is closely linked to its commitment to help enforce international core labour standards. These include the abolition of forced labour and child labour and the right to non-discrimination in the workplace. If civil, economic and social rights are not respected, social protection cannot be assured. The German government supports the ILO’s Decent Work agenda, which ties these aspects together. The further development of inclusive social protection systems is one of the four strategic objectives of the Decent Work agenda, alongside the creation of more productive employment, the effective implementation of labour standards especially the ILO core labour standards, and the support of social dialogue between the different stakeholders.
Micro-insurance
In many countries only people working in the formal sector, public-sector employees and civil servants are insured against life risks. Micro-insurance is one way of providing social protection for employees in the informal sector. Micro-insurance covers individual risks (e.g. harvest loss). It is financed through relatively small contributions and in some cases is administered by the policyholders, for example at community level.
As an alternative to insurance, savings funds and microcredit programmes have also shown themselves to be effective as an instrument of poverty reduction, and thus also help to enhance social security.
Provision for old age
In many partner countries of German development cooperation there is an enormous need for advice and support in establishing or reforming social pension schemes and improving basic security in old age.
This theme is relevant to countries in Asia, where the demographic trend is causing the proportion of elderly people to rise rapidly, and to many African countries. Here, as a result of the HIV/AIDS epidemic, the generation of grandparents is facing the difficult task of taking on the care of their orphaned grandchildren.
Another major challenge is posed by the much higher average life expectancy of women in most societies. Since their ability to provide for their old age based on their own employment is often limited, the number of widows without provision is set to rise substantially in many countries.
Publications
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Strengthening Social Protection Systems in Developing Countries and Emerging Economies
(PDF 388 KB, accessible) -
Sector Strategy on Social Protection
Strategies 190
(PDF 777 KB, accessible) -
Microinsurance as a social protection instrument
(PDF 492 KB, accessible) -
Social and Ecological Market Economy Principles in German Development Policy
Strategies 158
(PDF 234 KB, accessible)
