Asian Drivers
Development cooperation for social safety nets in East and Southeast Asia
Reaching out to the poor: prospects for safety nets in East and Southeast Asia
Authors:
K. Woo Lee
Publisher:
Korea Institute for International Economic Policy , 2009
Although East and Southeast Asia countries are commonly considered to be success stories in growth, they have yet to eradiate poverty and vulnerability. These problems have been exacerbated by the twin processes of globalisation and demographic transition, both of which have had negative social effects. The current financial crisis further highlights the need for East and Southeast Asian countries to institutionalise social safety nets for those adversely affected by recurrent shocks. In this context, a new report brought out by the Korea Institute for International Economic Policy investigates the safety net options for the region.
The economies of East and Southeast Asia are among the most open in the world. Although trade liberalisation raises the average standard of living in the medium term, some groups that have been favored by protection will see their incomes decline. And although Southeast Asia is lagging behind the East Asian countries and the world average in population ageing at present, as it approaches 2050, it will have a much more accelerated population ageing than the world average.
The 1997 Asian economic crisis provided an opportunity for the APEC member economies to realise the importance of social safety nets. Indeed, most governments have since taken steps towards establishing social safety nets, including social security systems and public assistance programmes. However, most initiatives remain relatively underdeveloped and in need of reform.
In the wake of the current financial crisis, countries in East and Southeast Asia now need to renew their interest in and efforts to strengthen social safety nets again. According to the report, international development assistance can play an important role in this process.
The report recommends that efforts should particularly focus on:
- expanding concepts of safety nets
- strengthening planning and management capacity
- improving data collection
- improving monitoring and evaluation
- capacity building
The report also advises countries to develop market-based solutions to complement safety nets thereby relieving governments of fiscal pressures, particularly in the current climate of economic instability.
