3 out of 5 People in Developing Countries Lack Safety Nets

The World Bank today released new data showing that at least 60 percent of people in developing countries – and nearly 80 percent in the world's poorest countries – lack effective safety net coverage as countries struggle to protect their most vulnerable citizens from the negative impacts of global financial volatility and food and fuel price hikes.

Sixty six million children around the world go to school hungry and struggle to concentrate and learn, a deficit that can be addressed with school feeding programs for the poorest. More than 2.8 million newborns die in the first week of their lives. Many of these deaths can be prevented by providing more pre- and post-natal care for mothers and their children. Food insecurity leads to greater family conflict and divorce rates.

Expanding cost-effective safety nets – including cash transfers, food assistance, public works programs, and fee waivers – to help countries respond to crises and address persistent poverty will be a main item for discussion by finance and development ministers at the World Bank-IMF Development Committee meeting on April 21.

"Safety nets can transform people's lives and provide a foundation for inclusive growth without busting budgets,” says Robert B. Zoellick, President of the World Bank Group. “Effective safety net coverage overcomes poverty and promotes economic opportunity and gender equality by helping people find jobs, cope with economic shocks, and improve the health, education, and well-being of their children."

The Bank's new 2011 Atlas of Social Protection: Indicators of Resilience and Equity (ASPIRE) provides the first-ever online snapshot of household-level data on safety nets and other social protection and labor (SPL) programs in developing countries, and was launched together with the Bank's new Social Protection and Labor global strategy for the next 10 years. While sustained growth in many developing countries has pulled hundreds of millions of people out of poverty and into the middle class, this economic progress has yet to reach a majority in the poorest countries that face unemployment, disability, illness, and struggle to protect themselves against economic shocks, persistent poverty, natural disasters, or other crises.

A new strategy for expanding coverage to the poorest people

The Bank's new strategy calls for investing in stronger SPL systems in countries to improve the quality and reach of safety nets and other SPL programs in four areas:

• First, extending coverage to the poorest countries and poorest and most vulnerable people, where the needs are greatest.

• Second, building a coherent and integrated portfolio of national SPL policies and programs that help people deal with multiple risks, and can be scaled up or down in response to crises.

• Third, increasing access to jobs and economic opportunities, with a strong focus on investing in early childhood development and in workers' skills and productivity.

• Fourth, emphasizing evidence-based action and South-South sharing of knowledge of what works.

"With this new strategy, the Bank will help countries move their social protection and labor coverage from a set of isolated interventions to a smarter, more inclusive, and more responsive approach," says Arup Banerji, World Bank Director of Social Protection and Labor. "This systemic approach helps countries address fragmentation and duplication across programs and create solutions tailored to their own contexts. With stronger social protection and labor systems, countries can expand effective coverage to the people who need it most."

Well-designed SPL programs, such as Bolsa Família in Brazil and Oportunidades in Mexico, are cost-effective, costing countries as little as half a percent of GDPThe Bank developed its new SPL strategy following extensive global consultations with governments, international development agencies, trade unions, and other civil society organizations. The three-tiered strategy discusses why and how the Bank can help countries invest in well-designed safety nets and other SPL programs that promote resilience by insuring people against risk; increase equity by protecting against dire poverty and catastrophic loss of human capital; and create opportunity through investments in young children, skills development, and improving ways for people to find jobs.

"It's not a question of whether countries can afford to have safety net programs," says H.E. Sufan Ahmed, Minister of Finance and Economic Development of Ethiopia, where the Productive Safety Nets Program has protected millions from famine during recent droughts in the Horn of Africa. "It's whether we can afford not to have them."

"Our experience in Brazil shows that a strong safety net can help the poorest children grow up healthy and well-fed, go to and stay in school. In the future, we also expect that they will graduate, and get better jobs – so we can close the gap between rich and poor," says Rômulo Paes da Sousa, Vice Minister of Social Development and Fight Against Hunger in Brazil. "The World Bank's new strategy to help expand safety net coverage to the poorest countries and poorest populations is the right one – because safety nets are a critical investment to reduce poverty, promote equity and sustainable growth, and be prepared for the next crisis."

New data on social protection in countries

As a companion to the new strategy, the Bank's ASPIRE online tool is the most up-to-date compilation of global SPL estimates, including data from 57 countries – mostly in the developing world – from 2005-2010. ASPIRE provides open and accessible household-level data on populations' social and economic status; assessments of SPL programs, including weaknesses such as low coverage and poor targeting; SPL program impacts on poverty and inequality; and ways to improve household data collection for SPL programs. Data from additional countries – especially those in Africa and the Middle East – will be added in the coming months, and the database will be updated twice a year.

World Bank support for social protection and labor

World Bank Group support for SPL programs reached US$11.5 billion in 83 countries during the last decade. In response to the global financial, food, and fuel crises, the Bank almost tripled its SPL financing from an annual average of US$1.6 billion in 1998-2008 to an annual average of US$4.2 billion in 2009-2011. During the last six years, Bank-financed safety net projects have directly benefited more than 267 million people, mainly through conditional cash transfer programs (94.5 million), other cash assistance transfers (78.5 million), and public works (12.8 million).