Does East Asia Need Social Protection? - An Overview

Governments in East Asia are looking at ways to improve social protection, that is, at improving the methods available to people to better manage various kinds of risks. There are several potential economic and social benefits.

 

First, better social protection can be good for productivity growth, by facilitating job turnover and reallocation of labor to more efficient uses.

 

Second, it can help reduce vulnerability to poverty: even as poverty continues to fall, a significant proportion of the population in East Asia remains vulnerable to the risk of becoming poor, as a result of factors such as unexpected health problems, large adjustments in labor markets due to industrial restructuring, or natural disasters. A third factor is that East Asia’s population is rapidly aging.

 

The question of old age security and putting in place effective pension systems will quickly grow in political importance. Clearly, East Asian economies need to look for home grown solutions that build on East Asian advantages such as relatively flexible labor markets and on traditions such as self reliance and family orientation.

 

There are a variety of ideas that countries are experimenting with, drawing on experience –positive and negative- from within the region and from around the world. These include conditional cash transfer schemes, possible work related transfer programs, a range of options for expanding health insurance coverage, and ideas for strengthening old age security and funding pension coverage in financially sustainable ways.

 

Read the  Full Overview (108kb pdf)

More information:
Data: Key indicators on social protection in East Asia & Pacific
Full Report:  East Asia Update, March 2006