Brussels, 03/05/2014 (Agence Europe) - On Tuesday 3 June, the International Labour Organisation (ILO) published a stark assessment of the social impact of budget adjustment measures, noting that only 27% of the world's population have access to a full social welfare system, and the reduction in the number of people who can access welfare is hindering economic recovery.
In its report on social protection around the world in 2014-2015, the ILO explains that, in the first phase of the economic crisis (2008-2009), at least 48 medium or high-income countries introduced economic recovery programmes, a quarter of which were composed of social protection measures. The ILO says that this support acted as an automatic stabiliser and helped economies return to balance and protect the most vulnerable sections of the population. In the second phase of the crisis, however, new governments did a U-turn and prematurely began budget consolidation measures despite the imperative need to extend support to vulnerable sections of the population and stabilise consumption, it argues. Despite commonly accepted ideas, the ILO points out that the budget consolidation strategy is not a European remedy because, “in 2014, 122 countries are limiting their public expenditure in terms of GDP, at a time when populations are most in need. Fiscal consolidation measures have contributed to increases in poverty and social exclusion in several high-income countries, adding to the effects of persistent unemployment, lower wages and higher taxes. The resulting depressed household income levels are jeopardizing domestic consumption and demand, and slowing down recovery”.
The figures quoted by the ILO are gloomy. In the EU28, cuts in welfare protection have increased poverty levels to 24% of the population, many of them children, women, the disabled and the elderly. More than 70% of people around the world have only partial welfare coverage or none at all. Only 12% of the unemployed receive unemployment benefits (64% in Western Europe) and 49% of people past retirement age do not receive any pension payments. Those that do receive a pension are often living below the poverty level. Those who retire in the future in at least 14 European countries receive lower pensions. Sandra Polaski, ILO Deputy Director General, says the justification for social welfare is even more undeniable in times of economic uncertainty, low growth and growing inequality, adding that the international community should put the issue high in their development programme for the post-2015 period. (EL)