Key Insights from Jomo Kwame Sundaram
Jomo Kwame Sundaram, Former Assistant Secretary-General for Economic Development, UNDESA, discussed the global economic challenges since the 2008 financial crisis, highlighting lackluster growth, contractionary policies, and the increasing threat of stagflation. He emphasized the impact of US-led economic policies, including interest rate hikes, fiscal austerity, and protectionist measures, which have exacerbated supply disruptions and affected developing countries. Jomo also emphasized the need for bold national policies to counter these trends and proposed forging new alliances—much like the previously unheard-of partnerships now emerging among Japan, China, Korea, and several European nations—to better navigate the shifting geopolitical landscape.
Global Stagnation and Rising Vulnerabilities
- Since the 2008 Global Financial Crisis, world growth has been weak, marked by contractionary fiscal and monetary policies.
- Post-2022 U.S. Federal Reserve interest rate hikes triggered global increases, leading to capital outflows from developing countries, worsening debt crises and limiting fiscal space.
- Commodity prices have remained low since 2014, reducing export earnings and incomes, especially in the Global South.
- Climate change, conflicts, and the COVID-19 pandemic have intensified supply disruptions, fueling “cost-push” inflation that hits developing countries hardest.
The Role of Geopolitical Dynamics
- Shifts in global economic and foreign policies—including trade disputes, sanctions, and carbon adjustment measures—have added to economic uncertainty and affected market access for developing countries.
- Rising military expenditures in several regions are diverting resources from social development and climate action.
- The increasing use of economic measures such as tariffs, sanctions, and financial restrictions has strained multilateral frameworks and complicated prospects for global cooperation.
- Ongoing policy shifts in major economies—ranging from fiscal retrenchment to changing approaches to international alliances—have contributed to volatility in the global order. In particular, the role of US in catalysing most of these policy shifts was highlighted.
Distributional Consequences
- Employment growth has slowed dramatically worldwide, with job losses compounded by automation and AI, which are replacing labour rather than creating opportunities.
- Poverty and hunger have been rising since 2014, accelerated by the pandemic.
Rethinking Social Protection
Jomo emphasized the urgency of reimagining social protection systems in ways that safeguard dignity, resilience, and sustainability in the face of deepening global crises. Inclusive, realistic policies with multiple benefits are essential to protect the most vulnerable, especially women, who face the harshest impacts of economic stagnation and social insecurity.
Key Insights from Gerry Rodgers
In his remarks, Gerry Rodgers, Former Director, International Institute for Labour Studies, ILO Geneva, highlighted the urgent challenges and potential pathways for strengthening social protection in the developing world, particularly against the backdrop of deepening inequality, global economic shifts, and rising informal employment.
The Gaps in Global Social Protection
- Existing systems are inadequate: Less than 52% of the world’s population is covered by at least one social protection benefit, and only one-third has comprehensive coverage.
- Coverage is highly disparate: While 86% of people in high-income countries have access, only 10% do in low-income countries.
- Gender gaps persist, with 39% of men covered compared to just 28% of women.
- Financing shortfalls and declining international resource flows further undermine social protection in the Global South.
Models of Social Protection
Rodgers emphasized three broad approaches:
- Employment-based insurance systems linked to formal jobs and life-cycle risks.
- Redistributive, anti-poverty programs aimed at supporting vulnerable groups regardless of employment status.
- Universal guarantees such as basic income—an idea gaining traction but not yet realistic at scale.
Most developing countries, including India, combine the first two, but often in fragmented, piecemeal ways that leave large sections of the population unprotected.
Lessons from Brazil
Brazil offers a more systematic approach with a formal labour system built around the “signed labour card”, which ensures rights such as pensions, sickness, and unemployment insurance for nearly half the workforce. Complementary redistributive programs—most notably “Bolsa Família”, reach a quarter of households and preferentially supporting women—help cover informal workers. Despite setbacks under previous administrations, Brazil has shown that coordinated policies linking redistribution, labour market formalization, and strong labour institutions can impact poverty and inequality.
Key Takeaways
Comprehensive and coordinated systems are more effective than fragmented, piecemeal approaches. While shaped by Brazil’s unique historical and political context, its experience demonstrates that even economies with large informal sectors can build inclusive social protection. For other developing countries, the challenge lies in creating similar policy space and adapting lessons to local realities.
Key Insights from Dalal Moosa
Dalal Moosa, Senior Economist, Social Protection and Jobs Global Practice, World Bank, presented an in-depth analysis of social protection systems in the Middle East and North Africa (MENA) region, highlighting both progress and persistent challenges.
Diversity and Fragility in the MENA Region
- The MENA region is marked by wide disparities—ranging from high-income, oil-rich Gulf countries to conflict-affected fragile states.
- Poverty rates vary dramatically: Yemen has nearly 74% living below the national poverty line, while Morocco reports only 3–4%.
- Expatriate and migrant workers, particularly in Gulf countries, face significantly lower incomes and limited protections compared to citizens.
Labour Market Realities
- High youth unemployment/NEET rates: About 32% of youth are not in education, employment, or training—much higher than South Asia (23%).
- Female labour force participation remains the lowest globally, averaging just 22%.
- Informality is widespread: Between 50–74% of private sector workers lack social insurance coverage.
Progress in Social Protection
- Jordan: National Unified Registry (NUR) covers 55% of the population; targeted cash transfers to the poor using a PMT-like method reach 16% of households, with half of beneficiaries being women.
- Morocco: Built a biometric ID system inspired by India’s Aadhaar. Unified Social Registry (RSU) covers 50% of the population while its newly launched Family Allowance Program now covers 40% of the population.
- Egypt: Unified National Registry includes information on 70%+ of households. Their main cash transfer program (Takaful and Karama Program – TKP) provides support to 30% of Egypt’s households, with transfers delivered exclusively to women.
These systems proved critical during the pandemic, though coverage gaps and exclusion errors (e.g., refugees, migrant workers, rural populations) remain.
Persistent Challenges
- Fragmented Active Labour Market Programs (ALMP): Most MENA countries offer limited, small-scale initiatives; only Saudi Arabia has invested heavily (e.g., training subsidies, entrepreneurship support, childcare and transport subsidies for women).
- Social insurance coverage is low, especially for women and informal workers, and mostly financially unsustainable.
- Pension schemes are often defined-benefit, pay-as-you-go, with early retirement incentives and high fiscal deficits.
Key Takeaways
While MENA countries have made significant progress—especially in building registries and expanding cash transfers—structural labour market issues, informality, and weak insurance systems continue to limit impact. Reimagining social protection will require not just technical reforms but also political will to reshape long-standing social contracts.
