LAW MANTRA     (Think Beyond Others)

Extending Social Security to Developing Countries

Abstract

The complicated, confusing and inefficiency in the system of the developing countries has created a lot of hurdle in delivery of workable social security schemes. The need of an hour is to pump support from external sources. The viability of schemes implemented by developed world and International organizations have been able to improve the standards of people in developing countries, though handful. It is urgently required to broaden its scope, but at the same time such schemes should be made while taking under due deliberation the probability of its success because generally the designs of such schemes as drawn by developed countries and International organizations are too extensive and expensive that it almost becomes impossible to successfully carry it out and thus larger portion of population is unable to enjoy those.

Introduction

With the advancement in the field of communication technology, the world has got a better opportunity to align itself with each other and cooperate together towards attainment of specific goals. This improvement has also helped to a vast extent to bring to surface the pathetic and sorry state of a human being in which he is compelled to live only because his government could not provide him with basic infrastructure and support. He loses basic security from within his own state. The outdated structure of the state fails to meet the standards as laid down by several international organizations. Pension system, unemployment benefits, maternity subsidies and so forth are not attained to a level as expected of which are already present in several developed countries.

Income and savings are very low in such state, people are mostly uneducated and most importantly these countries therefore falls in a vicious circle of poverty a concept postulated by Nurkse which furthermore victimizes the country to the germs of Neo-Imperialism by subordinating itself to the mercy of aid provided by superior west or other developed or major developing countries.

Today in 21st century, the developed and major developing countries along with several other International organizations have undertaken a task to help such developing economies to overcome their problems, an initiative really desirable because there is no denying the fact that unless the world overcomes the problems of these countries it cannot expect a peaceful and healthy environment. Several countries, and even UNO, have started launching welfare programmes for such states.

The main focus of these programmes is those people who cannot exploit the resources to their benefit or are actually unable to attain those. Article 22 of the Universal Declaration of Human Rights (UDHR) states that “Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.”

Though form time to time states have taken several initiatives  regarding social security of its citizens but the declaration of UDHR is worth mentioning because it is an umbrella under which all states can cooperate together for ensuring the same and support of one can easily push an attempt of other in positive direction.

Social Security in Support with Developed Countries and International Organizations

In many countries, social security comprises a large fraction of the government budget. Social Security expenditures account for over a third of total government spending in most industrialized countries. Since the early 1980’s social security programs have grown in size almost everywhere. Yet, it is difficult to explain why a social security system exists, let alone why it is so large. At any time the number of recipients of social security benefits is smaller than the number of contributors.

The developed countries have been able to implement large social security schemes but same cannot be feasible to developing economies owing to the reason of their lower income and infrastructure. The labour structure is based on traditional structure immune to outside changes which further complicates the task of governments of respective states to introduce new changes. It is therefore needed that several international organization which receives a huge sum of money from various sources should play a decisive role in helping developing with implementing several social security schemes.

After the end of Second World War many of the countries became independent in Africa and Asia. Because of the poor or weak economic development these countries were called developing or underdeveloped countries. Under the emerging international political and economic order, these countries depended on more developed countries for much needed financial resources and technology. The financial assistance given in different form by developed countries to developing countries for the development of the latter was known as development assistance. Technically the term attributed for the same was Official Development Assistance (ODA). ODAs emphasized only on welfare activities of the nations concerned, wherein, the donors were not assisted for military or terrorism related activities. European powers and Japan emerged as major donors to developing countries. The development assistances were disbursed through three main mechanisms viz. Multinational agencies, bilateral funding and international NGOs. At present, the donors are providing a major portion of their grants through international NGOs due to perceived inefficiency and corruption in the state agencies concerned with the use of development funds.

Role of India in extending Social Security to Other Developing Countries

It is in best interest for India’s economic diplomacy to strengthen her development partnership with developed and developing economies. For a longer period of time India had been a beneficiary of the ODA from developed countries, but with the passage of time things have changed to a greater degree and India has also emerged as a major donor, despite the fact that back in home yet it has many major problems with are a severe threat to its booming economy like high IMR and MMR, population explosion, unprecedented migration and large number of people living under daily income less than $ 1.25. In 2009, the total net official development assistance received by India from all donor countries was about US$ 2.502 billion, of which US$ 1.578 billion was in the form of net bilateral aid flows from countries organized in the Development Assistance Committee (DAC) (OECD 2012).

Nevertheless, the contributions from India are of indispensable cost and cannot be simply overlooked.

The policy of South-South Cooperation highlights the policy of India in scoring its objective for extending social security to developing economies. It is a broad framework for collaboration among countries of the South in the political, economic, social, cultural, environmental and technical domains. Involving two or more developing countries, it can take place on a bilateral, regional, sub regional or interregional basis. Way back in 1964, India launched the Indian Technological and Economic Cooperation (ITEC). It is the flagship programme of the Indian Government’s technical cooperation effort, not only because of its wide geographical coverage but also for innovative forms of technical cooperation. Under ITEC and its corollary SCAAP (Special Commonwealth African Assistance Programme), 158 countries in Asia, East Europe (including former USSR), Central Asia, Africa, Latin America, the Caribbean as well as Pacific and Small Island countries are invited to share in the Indian developmental experience in various fields. Thus, the ITEC Programme constitutes an integral part of India’s South-South Cooperation effort which has been a traditional pillar of the country’s foreign policy and diplomacy.

Similarly another initiative “Africa Connect”  has been launched by the Indian Ministry of External Affairs to ensure that e-connectivity programmes could extend to African continent.

From time to time the Indian leadership has been very active in raising voice for extending more aid to the developing countries so the citizens of such countries can develop to a certain desirable level.

In 2008, India allocated approximately Rs 26.7 billion (or $547 million) to aid-related activities.

Social Security Conditions in Developing Countries

The fact that any given country is a developing country in itself proves that in such countries several dimensions of human development cannot be considered to be perfect or will have a major drawback. The developing countries lack a properly laid down system of effective administration of governance because of its inefficiency in exploiting the resources to the optimum utilisation. The inefficiency in the system leads to the wider level of the corruption both at the political and bureaucratic level. The amount of money meant for spending over social security schemes is used for satisfaction of self interest through illegitimate cannels. The failure of proper infrastructure and lack of efficient monitoring system also ensures that corruption grow to unprecedented level and thus keep poor citizens at the loss.

The lack of proper infrastructure also hinders the government’s ambition to expand its ambit of several social welfare schemes. Only one-third of countries globally (inhabited by 28 percent of the global population) have comprehensive social protection systems covering all branches of social security (plus social assistance) as defined in Convention No. 102. However, most of these social security systems cover only those in formal employment as wage or salary workers. Such workers constitute less than half of the economically active population globally, but over 70 per cent in those countries with comprehensive social security systems. Taking into account those who are not economically active, it is estimated that only about 20 per cent of the world’s working- age population (and their families) have effective access to such comprehensive social protection systems.

Developing countries have two types of system running parallel to each other, one is Formal sector or organized sector and other is Informal or Unorganized sector. The former is a system where the workmen are a party to any agency through an enforcement of a valid contract and he enjoys a certain degree of rights and privileges but in latter i.e. informal sector the recruitment is through unrecognized channels. The procedures are flawed and therefore the workers here are vulnerable to several threats. The state’s sponsored social security schemes mainly covers only those individuals which are recognized under the course of law enforceable at that instance of time. In such situation the workmen in informal sector stand at loss of being a non-beneficiary of these state sponsored schemes.

The most vulnerable groups outside the labour force are women, persons with disabilities, migrants  and older people who cannot count on family support and who have not been able to make provisions for their own pensions.

There is yet one another category of people who are “Self Employed” and this category is also mainly overlooked by the state and thus they too fall in category of non-beneficiary of social security schemes. The reason behind this is mainly attributed to the rationale that such people are actually engaged in activities confined to their own means and methods of working as a result thereof they fail to register themselves with the system and thus by virtue of this becomes alleviated from the government’s channel.

The developing economies have a system immune to outside changes their labour systems are based on traditional practices. These traditional systems are mostly informal in structure and unorganized. People in such countries are inexperienced and ignorant of the latest development and working pattern. The governments of such states therefore face several hardships in ensuring a workable social security programs. As a result the need of developed countries assistance is greatly felt. Developed countries with several other international organizations can help improve standards of these developing systems by influx of know-how, several awareness programs and people to people contact.

Social Security and Corporate Social Responsibility

The post-war world has been seeing many new emerging trends of state to state relationship. The increase in production and demand of the goods from around the globe made the policy makers work towards integrating each other’s economy. As a result the Globalization started. The advent of globalization also helped various corporate houses to establish their business in other countries and produce goods so as to supply the local people at much a cheaper cost. This gave birth to MNCs and TNCs. Globalization also helped business establishments by allowing them to establish in various resources rich African and Asian countries to produce the commodities without having to pay for excessive amount incurred in unnecessary transactions and various duties imposed. The local workers were employed in such production houses and it in a way helped increase employment rate in such countries where these units were established. With this a need was felt of making businesses self-regulating mechanism whereby it can monitor and ensures its active compliance within the spirit of the law, ethical standards, and international norms. Thus the idea of Corporate Social Responsibility was formulated in 1970’s.

Today CSR play a pivotal role in safeguarding interests of employees. It helps them provide with required social security benefits. Businesses establishments functioning at various countries are required to follow a due procedure of law and ensure that their activities will run only paralleling with safeguarding the general interest of workers.

The role among corporate stakeholders is to work collectively to pressure corporations towards ensuring that they function while limiting themselves to the ethics and social responsibility. Several NGOs backed by media have also been leveraging an attempt to ensure that business houses these foreign establishments act in accordance with prescribed standard. The companies have themselves been active enough to meet the minimum proper requirement of its employees. They have launched several services for providing education, medical treatment and various other desirable services.

The need for an active participation of foreign business establishments based in developing countries holds its own importance. The government in developing countries run a major problem of Deficit Budget. The expenditure cannot be much in any particular sector because governments are also required to undertake responsibility of various other sectors. For such countries development of infrastructure and from external threats are a priority. In Africa, it is most obvious that one country is always hostile towards the other and thus they always try to influence the politics of each other by instigating unrest. As such the roles of established foreign business units come to be of immense importance to help local citizens in providing welfare services.

Conclusion

The developing countries might come up with several new social security schemes but that doesn’t mean that the citizens are aware enough to exploit such benefits to the optimum. The unawareness many a time leads to a situation wherein the citizens take such schemes for granted and most probably doesn’t know that how it functions and ends up without even taking a slightest benefit of it. The government is also helpless in such a situation mainly because its resources are concentrated towards improvements of scheme rather than making people understand the real essence of such social security schemes. It is therefore the urgency is felt for external support for proper implementation.

Social Security works because it is a compact that extends across income groups. The developed world can well play a leading role in his regard. If the affluent leave the system, it would become a welfare program which is just a system but vacuum from within. Social Security protects people against a variety of risks to ensure them a basic fulfilment of income in old age and to enable many people, who have to struggle all their lives, to look forward to a decent standard of comfort and dignity when they retire.

The world has seen enough of evils, and now is the time that one contributes towards humanity. The developed world, be it Developed Countries or International Organizations, have to play a crucial role in ensuring the proper extension of various social security programmes to developing countries so that the world can be made a better place to live in.

 

Submitted by:- UTKARSH PANDEY

                         B.A LL.B (HONS)

                         SEM 5TH

                         NATIONAL LAW UNIVERSITY AND JUDICIAL ACADEMY,ASSAM

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