2007年-世界发展银行全球_Sri_Lanka___Strengthening_Social_Protection_126页_9mb

Summary of "Strengthening Social Protection" in Sri Lanka

Core Content

This document provides an analysis of Sri Lanka's social protection system, focusing on poverty, vulnerability, employment opportunities, and social insurance mechanisms. It outlines the current state of social protection in the country, identifies key challenges, and proposes policy options to enhance the system in order to promote equitable growth and reduce poverty and vulnerability.

Main Points

1. Poverty and Vulnerability in Sri Lanka

• Poverty Incidence: Approximately a quarter of the population is poor, with poverty concentrated in rural areas. Despite 4.5% annual GDP growth, poverty reduction has been modest due to increasing inequality.
• Vulnerability to Shocks: Poor households are more vulnerable to income shocks such as sickness, disability, death of a family member, and unemployment. Aggregate shocks like drought, crop failure, and natural disasters (e.g., the tsunami) also have significant impacts.
• Demographic Trends: Sri Lanka has one of the most rapidly aging populations in South Asia, with the share of the population over 60 years old expected to double from 10% to 20% in 25 years. This will increase the demand for social protection and place strain on existing systems.

2. Vulnerable Groups

• Children: Vulnerable groups include those in large families, disabled children, child workers/street children, children affected by the civil conflict, and malnourished children.
• Working Age Adults: Informal sector workers, unemployed youth from low-income families, displaced individuals due to conflict or disasters, and the disabled are particularly vulnerable.
• Elderly: While only the oldest face above-average poverty rates, the aging population may strain traditional and formal income support systems and increase future vulnerability among the elderly.

Key Labor Market Trends and Institutions

3. Employment Protection and Promotion

• Labor Market Institutions: Sri Lanka has strong labor legislation and tripartite mechanisms for social dialogue, but these have led to excessive job protection, especially for formal sector workers.
• Severance Pay (TEWA): The TEWA system is one of the most restrictive globally, with high compensation for laid-off workers. It contributes to labor market rigidity and exclusion of vulnerable groups.
• Wage Setting: Public sector and TEWA-protected private sector jobs command higher wages than informal sector jobs, creating wage disparities. This is partly due to institutional biases and patronage-based appointments in the civil service.
• Education and Training: Informal sector workers have lower education levels, which limit their employment prospects. School dropouts from poor families often end up in unskilled, low-paying jobs, contributing to poverty.

Social Insurance and Formal Sector Coverage

4. Social Insurance Schemes

• Pensions: The Civil Service Pension Scheme (CSPS) provides some consumption smoothing for civil servants, but other retirement schemes like the Employees' Provident Fund (EPF) offer insufficient benefits due to low investment returns and lack of longevity insurance.
• Disability and Survivor Insurance: These are part of the social security package for formal sector workers, but coverage is limited and not well developed.
• Unemployment Insurance: A formal UI system is being considered, but its design must be adapted to the local context, as OECD models may not be suitable for low-income countries.

Social Safety Nets

5. Safety Nets and Income Transfer Programs

• Samurdhi Program: This is the largest safety net program in Sri Lanka, covering about 40% of households. It provides cash benefits and social welfare services to the poor and vulnerable.
• Income Support for the Disabled: Specific programs exist for the disabled, but they are not well integrated into the broader social protection framework.
• Public Works: These have been used in response to large-scale disasters, such as the tsunami, to provide employment and income support.
• Targeting and Community Participation: The Samurdhi program includes mechanisms for community participation in targeting welfare benefits, such as the Janasaviya experience. Proxy means test formulas are also being developed to improve targeting efficiency.

Policy Recommendations

6. Policy Options

• Reforming Labor Market Institutions: Move from job protection to worker protection by reducing excessive termination benefits and improving transparency in the TEWA system. This can promote labor market efficiency and inclusion.
• Improving Access to Education and Training: Develop cost-effective, demand-driven training programs for the informal sector and vulnerable groups, including women, youth, and the disabled.
• Enhancing Social Insurance: Improve the coverage and efficiency of formal sector schemes, and develop a coherent approach to risks like death, disability, and ill health.
• Strengthening Safety Nets: Expand and improve the design of safety net programs, particularly the Samurdhi system, to address chronic poverty and income shocks more effectively.
• Combining Public Works with Financial Services: Develop integrated programs that combine employment opportunities with financial support to enhance resilience and income security.

Key Findings and Recommendations

• Fiscal Costs: The current social protection system has significant implicit debt, particularly in the pension sector, which needs to be considered in fiscal planning.
• Equity and Productivity: Enhancing social protection can contribute to both equity and productivity by reducing inequality and improving labor market flexibility.
• Political and Institutional Reforms: Reforms are necessary to address the inefficiencies of current labor market institutions and to promote a more inclusive and effective social protection system.

Conclusion

Sri Lanka has made significant progress in social policy, but its social protection system faces challenges in terms of coverage, efficiency, and equity. The country needs to shift from job protection to worker protection, reform labor market institutions, and improve social insurance and safety net programs to better address poverty and vulnerability. These reforms should be informed by both domestic and international experiences, and tailored to the specific economic and social context of Sri Lanka.