Only 17 percent of Nepalis covered by social protection benefit, ILO says


Only 17 percent of Nepalese have at least one social security benefit, putting Nepal near the bottom of the table in the United Nations Sustainable Development Goals tracker, according to a recent report.

Nepal scores well below the global average of 46.9 percent, even though the constitution guarantees social protection for the poor and vulnerable.

In Asia and the Pacific, the average percentage of the population who has access to at least one Social Security benefit is 44.1 percent.

The report titled World Social Protection Report 2020-22: Regional Companion Report for Asia and the Pacificpublished by the International Labor Organization (ILO) on Tuesday, says there are wide differences between countries in the progress made.

“The majority of people in Asia and the Pacific do not have access to Social Security benefits,” the report said.

Social Security coverage for women has been extremely low, it said. Gender inequality remains a central feature of labor markets, with women receiving lower wages than men and spending more time on unpaid care work.

In South Asia, Nepal lies above Afghanistan, Bhutan and Pakistan; and among Sri Lanka, Bangladesh, India and the Maldives.

Public spending on social protection in Asia and the Pacific was found to be significantly below the global average.

Spending on social protection in the region has averaged 7.5 percent of gross domestic product over the past two years, with half of the countries spending 2.6 percent or less, the report said.

The figures for China and India are 70.8 percent and 24.4 percent respectively.

Covid-19 threatens to jeopardize years of progress toward achieving the sustainable development goals and wipe out gains in poverty reduction, the report said.

“It has also exposed the major gaps in protection that already exist in all countries and made it impossible for policymakers to ignore the persistent social protection deficits that are particularly experienced by certain groups, such as informal workers, migrants and unpaid carers. This crisis has resulted in an unprecedented but uneven global response to social protection.”

In the region, some of the specific benefits include new mothers who receive paid maternity leave and the unemployed who receive unemployment benefits, the United Nations agency said in a statement.

While non-contributory social protection schemes are typically limited to those working in the formal sector, non-contributory schemes typically target a small group of the poorest in a society, the report said.

“A large and important group of workers remains unprotected.”

Many women, migrant workers, the self-employed, employees in micro and small enterprises, domestic workers, homeworkers and family workers are not covered by such schemes.

In Nepal, the number of informal workers is high and yet they are excluded from the social security scheme.

According to an analytical report on the informal sector published by the Central Statistical Office last year, half of the companies in Nepal are unregistered, unmonitored and untaxed.

The report showed that of the 3.22 million individuals employed in the country, 25.8 percent or 832,187 individuals are employed in the informal sector.

In addition to providing a limited number of people with access to social protection schemes, the new ILO report states that the benefits available are often too low to provide adequate protection.

“This region is at a crossroads. It faces challenges in benefit adequacy and system sustainability coupled with low government spending and the persistence of non-standard forms of employment,” said Panudda Boonpala, deputy regional director of the ILO Regional Office for Asia and the Pacific. Ocean.

“The Covid-19 crisis has made it clear that an urgent paradigm shift is needed for most countries in the region. The need for social protection has never been more evident.”

The report calls on countries in the region to choose between different development paths.

One is the “high-road” approach, with an important new role for social protection, which aims to be more inclusive and leave no one behind, while supporting greater growth, driven by domestic demand, and contribute to the further development of human capabilities.

The other option is to focus on fiscal consolidation and pursue a “low-road” approach that traps countries in a “low cost-low human development” growth pattern.

“Compared to other countries, we have taken some better initiatives to provide a universal social protection system,” said former government secretary Purna Chandra Bhattarai, who once headed the Ministry of Labor.

“However, the majority of workers are employed in the informal sector and have remained outside the contribution-based social security schemes. To ensure better social protection, social protection spending can be increased, but it should not be a populist move,” Bhattarai said.

Nepal started its first insurance-based measures in 2019, with the aim of increasing the coverage of its premium plans.

The government of KP Sharma Oli launched a contribution-based social security fund in November 2018 targeting formal private sector workers. However, the scheme has been criticized for not gaining traction.

Labor rights organizations have demanded that coverage be extended to the informal and self-employed sectors.

Under the scheme, workers receive financial security in four categories of support: medical treatment, health protection and maternity plan; accident and disability plan; dependent family plan; and age protection plan.

An amount equal to 31 percent of an employee’s monthly base salary — 11 percent withheld from the employee’s monthly salary and 20 percent employer contribution — is collected by the Social Security Fund.

Of the 31 percent, 1 percent goes for medical treatment, health protection and maternity care; 1.40 percent for accident and disability plan; 0.27 percent for dependent family arrangement; and 28.33 percent for retirement or old age insurance.

The scheme provides for the provision of a retirement pension to employees over the age of 60 who have contributed to the fund for 15 years.

“The number of donors and employers in the fund has reached 359,373 and 17,347 respectively. Every month about 7,000 donors and 100 to 200 employers are added,” said Bibek Panthee, spokesperson for the Social Security Fund.

“The fund has raised Rs 22.93 billion. It has so far provided financial support totaling Rs 2.09 billion to 39,765 donors,” Panthee said.

Although currently only employees in the formal sector can contribute to the fund, a procedure has been prepared to include employees in the informal sector.

“We have created an implementation procedure for the inclusion of informal sector workers in the fund,” Kapil Mani Gyawali, the fund’s executive director, told the Post. “We’re in talks to implement it.”

“A key lesson from the pandemic is that economic growth without adequate investment in social protection generates unsustainable profits, usually concentrated in a limited segment of the population, leaving others extremely vulnerable to shocks,” the report said.

The Valley Voice
The Valley Voice
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.


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