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Poverty headcount in Asia and the Pacific could increase by more than 15 percentage points in some countries, given the current low social protection expenditure levels in the region, according to new estimates. In a pessimistic scenario, about 266 million additional people, or 8.7 per cent of the region’s population, could fall into poverty by 2040.
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) reported that if social protection spending does not increase between 2024 and 2040, significant resources will be required in 2040 to address the combined adverse impacts of climate change, demographic changes and digitalisation.
Social protection is a powerful policy tool to prevent and reduce poverty, inequality, social exclusion and insecurity emanating from risks and shocks, including those related to life cycle contingencies.
After decades of progress in Asia and the Pacific, poverty is back on the rise amid complex global shocks — COVID-19, natural disasters, climate change and inflation. However, challenges are not affecting people uniformly.
Inequalities are widening with respect to income, wealth and access to opportunities. This, in turn, is worsening the existing divides that have hindered inclusiveness, sustainability and economic growth.
Without adequate social protection, such as benefits for children, mothers and disabled persons and old-age pensions, the number of people in vulnerable situations in the region is expected to rise.
Currently, nations in Asia and the Pacific allocate just 8.2 per cent of their GDP to social protection on average, which is only half of what OECD countries typically spend. A third of the countries in this region, predominantly in the Pacific and South-East Asia, dedicate less than 2 per cent of their GDP to social protection.
While the region has seen slow progress to extend social protection to all, coverage and benefits levels remain low — 45 per cent of people still lack access to any social protection scheme.
Similarly, vulnerable groups such as women and girls, individuals with disabilities, informal workers, migrant workers, and internally displaced persons find it difficult to get coverage.
Lack of inaction means a future where each shock, whether it's a health crisis, severe storm or loss of a job, can push up to 266 million people to poverty. Investing in social protection today by at least 3.3 per cent of GDP will be more affordable than responding to shocks in the future.
Food is an important feature of many social protection systems, including through school-based programmes, in-kind support and food fortification.
India's Public Distribution System (PDS), along with other social protection initiatives, serves more than a billion individuals. In Cambodia, India, Kyrgyzstan, Nepal, Lao People’s Democratic Republic, Sri Lanka, and Tajikistan, school meals are recognised as critical social safety net programmes and governments are seeking ways to transition national programmes to universal coverage.
In Cambodia, India, and New Zealand, financial aid is provided to mothers of newborns. In addition, public works programmes like India's Mahatma Gandhi National Rural Employment Guarantee Act ensure up to 100 days of work each year for any rural household that requests it, offering a measure of unemployment protection.
The report suggested that funds for social protection can be found by shifting money away from less beneficial efforts such as fossil fuel subsidies, clamping down on fraud, improving tax systems, partnering with international funding mechanisms and even by increasing short-term debt.