International Social Security Conference
KEYNOTE ADDRESS BY MINISTER OF SOCIAL DEVELOPMENT, DR ZST SKWEYIYA TO THE INTERNATIONAL SOCIAL SECURITY CONFERENCE
HELD IN CAPE TOWN SOUTH AFRICA: 10 – 15TH MARCH 2008
Programme Director,
Excellencies, Ministers and Deputy- Ministers from the African Union and SADC,
Members of the Bureau and the leadership of the International Social Security Association (ISSA),
Representatives from our International development partners
Senior officials and academics from our beloved continent and abroad,
Esteemed guests,
It is indeed a great pleasure to acknowledge your attendance at this International Social Security Conference.
On behalf of the Government and people of South Africa, I would like to extend a warm welcome to everyone. I am especially pleased to note that we have the honour of hosting our fellow Africans from across the continent, the USA and Europe. Our friends from the Republic of Cuba, who will carry with them messages of support from Latin America, will join us later in the week.
We are also honoured to be joined by our friends from our development partner community and the diplomatic corps serving in South Africa and the sub-continent.
This gathering is the first of its kind in this country, but it is certainly not the last, as we envisage that South Africa will be the first African country to host the International Social Security Association’s 30th International Conference and 2nd World Social Security Forum in 2010. We would like to express our sincere appreciation to the ISSA and its members who unanimously supported the endorsement that the members of ISSA will come to Cape Town in 2010.
The conference marks the initiation of a long overdue conversation that we need to have about the position of the African Continent on the social security landscape. Coming as it does so soon after the World Economic Forum, it must impress upon developing countries such as ours the need to position ourselves at the heart of global conversations on defining issues of our time. The rise in demand for resources form India and China, climate change, energy and food security concerns, and the growing economic nationalism as a counter to the forces of globalization are currently dominating global economic conversations. The theme for this year’s WEF meeting was ‘the power of collaborative innovation.’ Simply put, the solutions to the world’s biggest problems require a combination of collaboration and innovation.
This week presents us with an opportunity as the people of Africa to articulate our concerns and challenges, to share our experiences and learn from those who have implemented some solutions. We would like to use the occasion to put Africa on centre stage, to highlight not only the plight of our poor, but also the richness of our solutions. The conference, organised under the theme: Comprehensive Social Security for Poverty Reduction and Sustainable Livelihoods in Africa: Challenges and Milestones, will be a first step by African countries towards sharing relevant social security research, exchanging applicable information on challenges and appropriate best practices, searching for pertinent options for interventions to build comprehensive social security systems and building a network of experts.
There is a real need to elevate into the international social security discourse the peculiar challenges facing the developing world in general and the African continent in particular. We envisaged that this conference will contribute to the enhancement of social security policy development, improve member countries’ efforts towards addressing underdevelopment and the challenges of poverty, income inequality, and poor health indicators. The establishment of comprehensive social security systems in Africa is essential in reaching the Continent’s Millennium Development Goals.
Ladies and gentlemen,
It would not be an exaggeration to state that Social security is one of the most significant achievements of the twentieth century. Systems of social security have in the past made major contributions in helping to build stronger economies, while enabling societies to advance the well-being of their citizens by protecting them from vulnerability and deprivation. These contributions we have witnessed when the world often faced its darkest hours in history. I cite as example the period of political turmoil that threatened peace and stability in Great Britain. It is argued that the combination of the franchise and the introduction of the Poor Laws, a social security response, brought Britain back from the precipice of a revolution such as the one in France. Another example is the turmoil in Germany and the response of Chancellor Bismark to introduce the first social insurance schemes between 1883 and 1889. The rest of Continental Europe followed these practices and in this way employment based benefits expanded. The period from 1919 to 1945 perhaps posed the greatest threat to the very survival of mankind. It was during these days of great peril that mankind sought interventions through social security measures. This period witnessed the introduction of old age pensions, disability benefits and family benefits. One of the greatest economists of our time, Maynard Keynes, dislodged the principles of classical economics and pointed out the failures of the market to provide what should be public goods. The recommendations in the Beveridge report of 1942 became the standard for many western countries. The expansion of social security was significant as societies realised that nation states had to take responsibility for life-cycle risks beyond the interest of an elite few.
The successes of social security and its ability to build human capital reached is apex in the seventies when arguments for limited state intervention became the new trend. It is argued that the welfare state came under threat as pseudo-scientists argued that the poor are in their conditions as a result of their own making. Minimalist government was propagated and the threat of dependency publicised as if they were truths. These developments in the developed world unfortunately found willing ears in the developing countries where failed development paradigms of modernisation and later structural adjustments meant further reduction of social security. The developments over the last 30 years beg the question whether we are seeing the end of the expansion of protection that society must offer its members.
We will argue that social security is an indispensable component of social justice. Individuals and families seek secure lives. This is an age-old aspiration, but it is threatened by the risk of occurrence of a social contingency such as illness, accident, invalidity, death, old-age or unemployment. In addition to fostering economic progress, modern societies must develop public policies which reduce insecurity and minimise the harmful consequences which can result from the occurrence of a social contingency. The new focus on dynamic social security today, as advanced by the ISSA under the able leadership of Mr Hans Konkolewsky, must mean developing proactive responses to evolving social and economic needs. A widening of our understanding of social security’s role is therefore required. It is incumbent on us as we deliberate during this conference to ensure that globalisation has a stronger social dimension, since it has become very clear that economic growth in itself is insufficient to realise more equitable societies. To quote from one of the most influential economists of all time, Adam Smith:
“In civilized society, humankind stands at all times in need of the co-operation and assistance of great multitudes, while his individual life is scarce sufficient to gain the friendship of a few persons.”
This, in summary is the reason why we need to continue to work together to give a human face to globalization, even as we adapt to the new environment. Of course, the new environment may in some instances call to question the very values that inform how we adapt. For example, how much credence do we place on social solidarity and risk pooling as opposed to reward for individual success? How are these values then reflected in the policy choices we advocate?
While adaptation is not new to social security, the speed and complexity of social and economic change that we are experiencing requires us to adapt to a broader concept of social security. Challenges such as the expansion of informal labour markets, changing family structures, lower fertility rates, longer life expectancy, increasing urbanization and migration as well as political instability in many parts of the world are all putting pressure on social security’s capacity to fulfil its vital function. For this reason, we need to seek sustainable solutions to address the plight of non-citizens in our own countries.
The approaches and tools available to us as we try to expand access to social security require a more comprehensive approach which recognizes the very direct links between social security, political stability and international economic policy. The session on regional integration and cross border migration will begin to shed some light and initiate debate on these matters.
Because of the wide range of challenges facing social security on the continent, our social security institutions can no longer be limited to playing a passive role of income redistribution. We now need to be active and proactive players, putting into place preventive measures against life-cycle risks, as well as initiating programmes that invest in people, maximize their potential and productivity, and facilitate social integration. Competitiveness, innovation and growth are increasingly seen as part of the domain and responsibility of social security. To this end, we must accede to the International Social Security Associations’ call to a new approach called “Dynamic Social Security”. Such an approach calls for sustainable and accessible social security systems that are based on integrated, proactive and innovative responses to help manage the risks and realize the opportunities that economic globalization could offer.
Of course in broadening the concept of social security, we add new dimensions to the tasks of social security institutions, but this should ensure that social security remains a positive force in the development of societies and individuals. In the context of Africa, the most important challenge for social security remains the extension of coverage. Given our place on the economic world stage, our social security approach needs to place greater emphasis on poverty reduction and social inclusion.
Because of our limited resources, it is critical for us to talk about new paradigms, to prioritize different groups for improved protection. Of course, we cannot ignore the important influence of our cultural heritage in determining our prioritization. Our African heritage has taught us to revere our older people, and to care for the poorest in our society. It has also taught us the principle of sharing the little we have, which is referred to in the language of social security as social solidarity. The priority status accorded to old age poverty is one of many reasons that can explain the current worldwide focus on pension reform.
The position of women in society is an issue that has acquired great prominence in recent times, and this adds a further dimension to our social security design. The prevailing inequity and lower status accorded to the role they play in the economy must occupy our minds as we deliberate in this conference, and this is why we have planned one of the commissions to address gender and social security.
The extension of coverage to the informal sector and to the poor in remote rural areas is a particularly challenging task we face. In Africa, this presents one of the biggest challenges we must address if we want to make any dent on poverty. We cannot avoid issues of the need to improve the performance of our economies, so that we can improve affordability even as we deal with the more immediate challenge to develop innovative approaches to collect contributions.
We must find ways to close the gap between social security provision for those in the formal and those in the informal sector. While difficult choices must be made, we must discuss how we prioritize between children, older persons, women and the poor in the informal sector. Even as we acknowledge that there is no one answer, and that we must respect each other’s national and political realities, I encourage you to use this forum to share all the interesting approaches in your countries. The country examples that will be presented during the conference should serve as a good starting point for the discussion.
At the very least, I would urge that we discuss a minimum level of coverage that our citizens should obtain, and how this is to be facilitated. Of course, such a conversation will immediately raise debate about sustainability. This is particularly challenging when we consider issues of pension provision and health care services. While the developed world is facing major challenges of aging of their populations, we have relatively young populations. However, we cannot take comfort in this, as our existing older populations are experiencing extreme poverty even as we speak. So although we do not yet have a significant aging problem, we have a major problem of old age poverty. This highlights the need to ensure greater intergenerational fairness in the reform of our social security systems as we move forward. So the seminar discussions on retirement reform and the financing of pensions should shed further light on this matter.
The experts tell us that although we have young populations, our pace of aging is more rapid than that experienced in the developed countries. This then raises questions about how we address the needs of young children and break the back of inter-generational poverty. Our education system as a key pillar in the development of sustainable economic growth and effective social security systems cannot be over-emphasised. This must clearly be supported by well-functioning healthcare systems, to enhance school performance and support the creation and maintenance of an adequate labour supply. The rapidly rising cost of health care across the globe is a major challenge and expenditures are more difficult to control, than for retirement. For this reason, public policies need to use incentives to control costs and improve health system performance. Given the scourge of HIV/AIDS and other communicable diseases, this is a battle that must be won. We will hear more in the plenary about some planned research work to determine the cost-effectiveness of alternative interventions to support the vulnerable in the context of HIV/AIDS.
Even as we acknowledge that prioritization might differ greatly according to national contexts, an important issue is how to ensure that improved accessibility was well implemented. The role of good information systems becomes paramount, to help us target our resources efficiently and ensure maximum impact. Because we live in a more interconnected and mobile world, our social security systems must increasingly work together and take advantage of the opportunity to share information technology, thereby reducing costs and increasing flexibility as needs and policies evolve.
In acknowledging the limited resources available to governments on our continent to provide adequate social security system, we must not become despondent. We must examine the work that has been done by various multinational organizations that suggest that in fact a minimum level of social security in developing countries is not only necessary, but indeed feasible. Those who choose this will have an opportunity to discuss this at length in one of the commissions. So as we examine government funding, we must also consider the role that must be played by the private sector both locally and globally. We must ensure that we use the support available to us from organizations such as the International Social Security Association and the International Labour Organisation to lobby and promote a positive role for the private sector not only in the provision of financing, but also in the administration of benefits to our citizens. Of course, this will of necessity require robust and effective regulation and governance on the part of the government. .
Ladies and Gentlemen:
A key determinant of success in any policy is the role played by the community or beneficiaries of any social security system in its design and implementation. Given the importance of culture, education and political context in enhancing or constraining social security development, it is only reasonable that we should raise the profile and importance accorded to the inclusion of our communities in the dialogue, so that we can build confidence in and commitment to any new approaches that we develop.
In the context of South Africa, which has emerged from a bleak history of deliberate deprivation and social exclusion, it is only fitting that we have placed social security at the top of the economic and political agenda. In fact, I can safely say that even before the advent of democracy, the pursuit of social justice in South Africa had as a key cornerstone the pursuit of social security rights for all the citizens of the country. It was this aspiration that deepened our own commitment and enlisted the concerted support we received from the international community. It is no wonder then that social security has enjoyed such prominence in our national discourse that it is a regular feature of our presidential State of the Nation address and our Finance Minister’s Budget Speech.
A key achievement of the democratization of the state in South Africa was the status accorded to social security in our legal framework. Our constitution states in the Bill of Rights that “everyone has the right to have access to social security, including if they are not able to support themselves and their families, appropriate social assistance.” It goes even further, and requires the state to take reasonable legislative and other measures, within its available resources, to achieve the progressive realization of these rights. The democratisation of our society in 1994 was therefore a defining moment not only in political terms, but for human solidarity. The consequence of starting a more egalitarian society in 1994 was a rapid expansion of our social security system as we extricated the system of Apartheid. In 2001, the government appointed a Committee of Inquiry into a Comprehensive Social Security System. The findings and recommendations of this Committee have continued to inform our current reform project. Much work has been done since then in extending coverage of our social grants, and we are now able to state that 12,5 million out of the 48 million citizens of this country are benefitting from some form of direct state support in the form of either an old age grant, a child support or foster child grant or disability grant. While the cost to the country has been quantified as being more than 3,4% of our Gross Domestic Product, the impact that this has had on poverty alleviation and social cohesion in the country is incalculable. Of course, some concern has been expressed about long term sustainability and affordability of our social security system.
In similar vein to the rest of the world, we have debated the merits of universalisation versus targeting, the relative importance accorded to social grants versus contributory social security, the role of the state and the role of the private sector in the provision of social security. In South Africa, there has been vigorous debate about the merits of extending social transfers compared to accelerated job creation, with views expressed that the increasing cost of our social transfers could reduce the incentive to work. Of course, some of these debates are more ideological than factual, but then this audience will have an opportunity to discuss this further in one of the commissions.
In the afternoon our Director-General, Mr Vusi Madonsela will take you through the details of how far our government has gone in attempting to meet our constitutional obligations, especially in the context of competing claims on our resources. He will also describe in greater detail the new work we are currently engaged in as we consider reforms to the contributory side of our social security system. I will therefore not take you through this, and rather invite you to hear about our system even as we spend the rest of the week hearing about your systems and discuss how and what we can learn from each other.
Let me conclude by once again thanking you for making the time to come and participate at this conference, and accept the hand of friendship offered by the various countries that have attended to help us create a better life for the citizens of this beautiful continent. I hope that you will find the discussions fruitful, and the deliberations helpful as you consider how we can build a better life for the citizens of our respective countries.
I now have the singular honour of declaring this Conference open.
And I thank you all.
