As Asia's population ages,
developing countries in the region should explore social pensions that provide
cash benefits to vulnerable older citizens who are most in need of a safety
net, according to a new publication from the Asian Development Bank (ADB).
“Social pensions can help older
people gain access to health care, and enhance their status and social
standing,” said director general of ADB’s Regional and Sustainable Development
Department S Chander. “They also help the most vulnerable, particularly women
and widows who often lack savings or any form of social security, and face
discrimination in terms of employment, inheritance and property laws.”
The study – Social Protection
for Older Persons: Social Pensions in Asia – looks at various non-contributory
social pension schemes in the region and suggests that even providing a small
bit of assistance can go a long way to reducing poverty.
Case studies from Bangladesh,
Nepal, Thailand and Vietnam illustrate that a social pension programme with low
benefits to many beneficiaries is more beneficial than high benefits to few
beneficiaries. Asia’s ageing population is a development challenge; since
caring for the elderly can be costly and economic growth and productivity
depend on a labour force regularly replenished with young adult workers.
Only a minority of Asia's elderly
receive pension benefits. Indeed, only about one-quarter of the workforce is
covered by contributory pensions in China, the Philippines and Sri Lanka. Less
than one in 10 are covered by contributory pensions in Bangladesh, India,
Indonesia and Vietnam.
The study found that targeting
social pensions to income or poverty levels – as opposed to universal coverage
– makes it difficult to identify eligible beneficiaries and can lead to
mismanagement and favouritism.
Social pensions can be attractive
to policy makers in countries where national budgets are tight and poverty
rates are high, as the beneficiary group is clearly defined and liabilities are
simple to track.
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