Social protection

Opening remarks by Tim De Meyer at the International Conference on Social Security and Economic Development

By Mr Tim De Meyer, Director of ILO Country Office for China and Mongolia

Statement | Beijing, China | 21 September 2016
Mr. Hua Jianmin, 
Professor Zheng Gongcheng,
Mr. Christoph Pohlmann,
Distinguished delegates,
Ladies and gentlemen,

Good afternoon and a warm welcome everyone to this International Conference on Social Security and Economic Development. I would like to thank the China Association of Social Security, the Friedrich-Ebert-Stiftung Foundation and Renmin University for convening an impressive range of Chinese and international researchers, for the initiative and for the opportunity for ILO to contribute to a topic that appears more timely than ever: the relationship between social security and economic development.

Today nowhere is a more pertinent place than in China to discuss this topic. Over the past several years China has achieved near universal social protection coverage in health and old-age pensions. The investment in social security has contributed to China’s success in achieving faster recovery from the international financial crisis and robust growth in the last decade. China’s social spending is still only half the level of OECD countries, but other countries are becoming increasingly interested in China’s experience with marrying social protection and economic transformation.

Now China is entering a new growth phase, the so-called New Normal defined by medium-high economic growth, overcapacity cuts and supply-side reform stressing labour market activation. Rapid ageing, climate change and globalization are driving an economic transformation likely to have a profound impact on the future of work in China. The level of social contributions is leading some to question whether social security is burdening the economy, while others stress that social security is even more needed in times of transforming the growth pattern. In this context, this conference will contribute and influence national dialogue on the future direction of social policies. Our debate is also meaningful for the international audience, as the global economic prospects are uncertain and many countries are still cutting social spending as a response to the economic difficulties.

Dear colleagues, the latter half of the 20th century produced unprecedented economic development. It is sometimes forgotten that social security in no small part pulled the US out of the Great Recession. The international standards shaped by that experience and still enshrined in C. 102 today were part of the recipe that economically resurrected Europe from the ravages of War. The social protection systems worldwide today, however, are no less faced with various challenges.

The biggest challenge is inequality. Social protection is still an unfulfilled human right for 73% of the world’s population. That deprivation has very real and tangible consequences. In recent decades, real growth has not been accompanied by increased wages and improved social conditions. A large proportion of workers in developing countries are still excluded from formal labour markets and the protection that employment protection legislation and social security bring.

At the same time, the traditional European social model is also faced with challenges. Europe has among the best-developed social systems in the world. But this model is being challenged by the continued transformation of labour markets, rising inequality and the growth of non-standard employment, and demographic trends. Many countries are exploring responses to these challenges, some are resorting to cutting social spending and individualizing the risks, and others are looking for ways to ensure more flexible and coherent approaches to social security.

The global financial crisis of 2008 reminded everyone that social protection remains a key strategy for developing and developed countries alike to promote human development, maintain political stability and stimulate inclusive growth. The ILO Social Protection Floors Recommendation, 2012 (No. 202), reflects this consensus on the extension of social security to all. G20 Labour Ministers led by the Chinese Presidency this year again saw fit to craft a set of policy recommendations on the promotion of equitable and sustainable social protection systems while reaffirming the Sustainable Development Goals adopted by the international community last year – and the central position of social protection floors in the 2030 Development Agenda.

The nexus between social protection, quality job creation and sustainable economic growth is perfectly laid out in the ILO Social Protection Floor Recommendation, 2012 (No. 202). Social security is an important tool to prevent and reduce poverty, inequality, social exclusion and social insecurity, to promote equal opportunity and gender and racial equality, and to support the transition from informal to formal employment. Social security is an investment in people that empowers them to adjust to changes in the economy and in the labour market, and that social security systems act as automatic social and economic stabilizers, help stimulate aggregate demand in times of crisis and beyond, and help support a transition to a more sustainable economy. Effective and flexible social security systems, in short, are not only the human right enshrined in international law exactly 50 years ago, but an essential investment in modern economies.

Nowhere in the world will this nexus be more daftly illustrated than in China in the next few years. In its 13th five-year plan, China is pledging to reform and improve its social security system, to adhere to the principle of universal coverage, and to significantly increase the participation rate of people with flexible employment and rural migrant workers in social security programs.

Investment in people is central to economic development. I hope this conference will contribute to exploring a new relationship between fiscal, wage and social protection policies. Together I hope we can make joint contribution to ensure that growth will benefit all, not just the few, and leave no one behind. I am convinced that, to achieve this, we will need more and better social security.

Thank you.