An article by the ODI argues that social protection is now a global imperative. It is in all of our interests to ensure that progress made in development over the last decade, particularly towards meeting the Millennium Development Goals isn’t undone by the current financial climate. McCord, from the ODI, argues that in previous crises, a lack of action to protect the poor exacerbated poverty and inequality and had a negative effect on economic growth. The crisis, has reminded us, more than ever, how very interconnected the world is. Countries are no longer immune from financial crisis in another.

The G20 made an commitment to care for the poor through a fund for social protection – McCord suggests ways in which this fund should be put to use. However, she does not deny the difficulties in providing urgently needed social funds when countries are faced with falling revenues – what she calls ‘the paradox facing developing country governments’. Macroeconomic stabilisation and growth strategies will not be enough – they will fail to help the impoverished.

What should be done?

McCord believes we should:

  1. Increase funding flows to the developing world on a medium-term basis. Predictability of ODA (overseas development assistance) becomes even more crucial if developing governments are to take ownership of social protection programs. They should ‘include multi-year ODA packages to safeguard the provision of basic health and services and the extension of social protection for growing numbers of poor’.
  2. Recognise institutional constraints. Many developing countries lack the technical and managerial skills required to develop, manage and implement social protection programmes. This could limit the effectiveness of increased flows of ODA for social protection programmes. As a result money should also be invested in capacity building and institution building.
  3. Rationalise existing social protection expenditure. This could enable governments to improve targetting to the poor, focus on more equitable social protection coverage and harmonise initiatives at the country level to improve efficiency and reduce duplication of effort and resources.
  4. Protect social protection expenditure. The temptation exists to cut health and education budgets during periods of financial constraints. It is essential that expenditures in these areas are protected.