Created: 07 December 2012

The World Bank plays a major role in the global spreading of new ideas and discourses. While many people might think the UN, UNDP or the ILO have more interesting things to say on development, more often than not, it is the World Bank which succeeds in promoting a new ‘order of discourse’.

In 1990, it was the World Bank which put poverty on the international agenda. While the ‘human development’ concept of UNDP was launched in that same year, five years later UNDP also adopted the priority of reducing extreme poverty.

In 2000, the World Bank proposed a strategic framework for social protection, and while this ‘risk management’ strategy did not have immediate success, it now has been re-launched and probably will influence the new way of thinking on social protection.

The reasons for this success are quite simple. The World Bank has willing media for its economic (neoliberal) messages, and it has huge resources to implement its ideas in countries all over the world.

In June, the ILO adopted a Resolution on a Social Protection Floor, which it is now trying to implement. The European Commission published in 2011 its Development Report on Social Protection, and in 2012 a Communication for a social protection strategy in its development cooperation policies[1].

What exactly does the World Bank propose?[2]

Words we already know

The ‘Social Protection and Labor’ strategy builds on the proposals of 2000[3], though it has added ‘labor’ to it. The core focus of the new proposals are ‘to move the Social Protection and Labor strategy from isolated interventions to a coherent portfolio of programs’, ‘from fragmentation to systems’.[4] The World Bank has in the past indeed mostly been working around separate programs, like safety nets and conditional cash transfers. If it now succeeds in building around these different programs a coherent social protection strategy, then developing countries can only win, provided they are brought together with a vision of offering genuine social protection.

The words that are used in the proposal are not reassuring. It is the language of the World Development Report of 2000[5]. It is about risk and managing risks, therefore building ‘resilience’ in order for individuals and families to be able to ‘cope with sudden shocks’.

What this means, in a nutshell, is that social protection is reduced to protection against ‘risks’, that ‘risks’ and ‘shocks’ are considered unavoidable and that people have to learn to live and cope with them.

The analysis of this discourse has already been made.[6] It first of all builds on an equation between economic shocks and natural catastrophes – economic shocks and epidemics’[7] –, things that just happen, ‘acts of God’ that cannot be avoided. Resilience means that the protection against these shocks has to come from individuals and families themselves, they have to be resilient and strong in order to quickly re-bounce. These are the ‘risks’ and they logically exclude things that do happen to people but are not considered ‘shocks’, such as childbirth or old age. And of course some risks can be avoided, natural catastrophes – solid building rules against earthquakes – as well as some economic crises – the subprime crisis, for example.

This is a very limitative approach to social protection, and in contradiction with the old age pension that the World does propose for people. But it seems to orient the strategy towards a neoliberal approach that will not give people economic or social security, but just and in the best of cases, a series of social insurances to be bought on the private market. ‘Private sector actors are critical partners’.[8]

New elements in the strategy

The adding of ‘labour’ to the strategy has to be welcomed, since jobs can indeed be an important highway to achieve a decent level of income. We know jobs are not necessarily a way out of poverty but they have at least the potential, provided there is a good labour market regulation and wages are at the level of at least the poverty line.

For the World Bank, jobs are mainly linked to the ‘opportunities’ people need to have, and therefore it proposes better education and skills development and indeed improved labour market regulation. This is a very positive step, though it remains to be seen what ‘improved’ means in this context.

In its ‘Doing Business’ Report of 2013[9], it considers fixed term contracts and 50 hour workweeks as positive achievements, whereas premiums for night-work and paid annual leave are on the negative side.[10]

‘Employment laws are needed to protect workers from arbitrary or unfair treatment’, says the World Bank. It claims its indicators are consistent with ILO conventions, though they do not cover its Core Labour Standards. But ‘upholding Core Labour Standards is central to protecting workers and improving their productivity’[11]. Once again, while this is a huge step forward for the World Bank, it wants ‘to strike the right balance between protection and competitiveness’. This is one of the first texts in which the World Bank implicitly accepts trade unions and collective bargaining, included in the Core Labour Standards. The same happens in its World Development Report 2013[12] on jobs, where it is said that ‘collective bargaining does not have a major impact’[13], as well as that ‘there is little evidence on the impact of trade unions’.[14] Though it also adds that ‘there is no consensus on what the content of labour policies should be’.[15]

Where the World Bank remains silent

What is not clear is where this strategy really differs from the Poverty Reduction Strategies of the World Bank. The same question arises concerning the ILO and European Commission documents.

‘Billions have been lifted out of poverty’, says the World Bank, and around 1,2 billion people have joined the ‘middle classes’. Now this is something controversial, it all depends on how you define ‘middle classes’. If the World Bank refers to the people who are now above the 2 $ a day poverty threshold, serious questions can be put to its assessment. Most people do indeed remain only just above that poverty line and thus remain as vulnerable as the poor themselves. Middle class should mean no risk of poverty.[16]

The World Bank does not say anything about the scope of its new strategy. It seems clear it does not concern a ‘universal’ social protection, but will remain targeted on the poor. ‘Well designed, well targeted social protection’[17], ‘Resilience for the vulnerable, equity for the poor, opportunities for all’.[18]

This has to be seen as one of the major shortcomings of the proposal, since poverty remains to be seen as a problem of poor people. It is only when poverty is conceptualized as a social problem of the whole of society, and consequently as a problem that has to be tackled by the whole of society – through a system of taxes and redistribution – that poverty can be seriously diminished. This does not mean that the proposals of the World Bank are useless, but that their effect will remain marginal and will not really tackle inequality. It is clear that more jobs will lead to more income and thus to less poverty, but it is not enough to achieve equitable and socially just societies.

Some other problems

The World Bank does not remain silent on a couple of other issues which are problematic.

A first point is the objective of social protection. Here, it remains in line with the ILO and the European Commission, though these institutions do stress that social protection is a human right. The World Bank only has this vague phrase of ‘securing people’s rights and fulfilling their obligations’.[19] But totally in line with ILO and CCE, the World Bank emphasizes the importance of social protection for growth and productivity. ‘Social protection is central to growth promoting reforms’.[20]

It also emphasizes its role in stabilizing aggregate demand, in labour market mobility, in promoting the security to invest, in building human capital and finally in reducing inequality. ‘Growth-enhancing reforms are made more politically feasible’.[21]

In other words, the social protection strategy is in fact an economic strategy that will help to achieve the neoliberal reforms the World Bank has been working at for a couple of decades already.

A second element that has to be emphasized is the ‘transformational’ character of the proposed strategy. Now, as was already clear in the European proposal, a lot of things can be ‘transformational’ and the concept as such has already lost its meaning even before it becomes commonly used. What it means for the World Bank: ‘providing a foundation for inclusive growth and social stability’[22] and ‘a transformational effect on people’s live’. In its Development Report on Jobs it is ‘jobs’ which are ‘transformational’.[23]

The European Commission referred to the 2004 document of Devereux and Sabates-Wheeler[24] for whom transformative approaches extend the concept of social protection to include ‘areas such as equity, empowerment and economic, social and cultural rights, rather than confining the scope of social protection to targeted income and consumption transfers’. In other words, according to this definition, social protection becomes ‘transformative’ when it is real social protection…

According to Global Social Justice, the transformative potential of social protection can also refer to democracy and human rights, to emancipation of people and communities, to the promotion of a social economy, etc., but these elements do not come into the World Bank’s remit.

Conclusion

The Social Protection and Labour Strategy of the World Bank has to be welcomed. It has the potential of making poverty reduction strategies more coherent and effective.

However, it does not seem to go much further and will not become a universal social protection for all people, a condition for giving people truly economic and social security and for reducing inequality.

The World Bank mainly aims at social insurances, against unemployment as well as against old age, crop and weather insurance as well as health insurance[25]. Its objective is not to build a state guaranteed and institutionalized social protection system. It still sees a role for ‘charitable institutions and worker’s remittances’.[26] Its ‘Rapid Social Response’[27] looks more like a humanitarian programme than like social protection. Its proposal is meant for individuals and families, not for societies.

The World Bank has huge resources to fund this strategy. It also wants to use South-South knowledge-sharing procedures, which is an excellent idea. The Southern country which has most experience with new systems of social protection is Brazil, not only because of its conditional cash transfers (Bolsa Familia) but also because it tries to give it a structural framework which could, in the end, be linked up to its social security system.

If the World Bank allows this to happen in other countries, the strategy might have a very positive impact. Chances are minimal however if it remains with its objectives of economic growth, social stability and targeted aid. These two approaches are not compatible, they are in contradiction with each other, because in the World Bank approach social protection will stop when it stops serving growth.

[1] An analysis of these proposals can be found in Mestrum, F., Social Protection Floor: Beyond Poverty Reduction?, http://www.globalsocialjustice.eu/index.php?option=com_content&view=article&id=301:social-protection-floor-beyond-poverty-reduction-&catid=10:research&Itemid=1

[2] World Bank, Resilience, Equity, and Opportunity, Washington, The World Bank, 2012 – this document will be further referred to as ‘WB’.

[3] Holzmann, R. and Jörgensen, S., Social Risk Management: A new Conceptuam Framework for Social Protection and Beyond, Social Protection Discussion Paper n° 0006, World Bank, Washington, 2000.

[4] WB, foreword and p. XV.

[5] World Bank, World Development Report 2000. Attacking Poverty, Washington, The World Bank, 2000.

[6] A complete analysis can be found – for those who read Dutch – in ‘Mestrum, F., De rattenvanger van Hameln, Berchem, EPO, 2005; it has been partially reproduced in Mestrum, F., Poverty Reduction and Sustainable Development, Environment, Development and Sustainability 5: 41-61, 2003.

[7] WB, p. XI.

[8] WB, p. XVII.

[9] Doing Business 2013, Washington, World Bank, 2013.

[10] Doing Business, p. 216.

[11]WB, p. XVII.

[12] World Bank, World Development Report 2013, Washington, The World Bank, 2013.

[13] World Bank, 2013, op. cit., p. 26.

[14] World Bank, 2013, op. cit., p. 263.

[15] World Bank, 2013, op. cit., p. 25.

[16] Summer, A., The Buoyant Billions: How ‘middle class’ are the New Middle Class in developing countries? (And why does it matter), CGD, WP309, October 2012.

[17] WB, p. XII.

[18] WB, p. 1.

[19] WB, p. XIV.

[20] WB, p. X.

[21] WB, p. XIV.

[22] WB, p. X.

[23] World Bank, 2013, op. cit., p. 8.

[24] Devereux, S. & Sabater-Wheeler, R., Transformative Social Protection, IDS Working Paper 232, October 2004.

[25] WB, p. XIII.

[26] WB, p. XIII.

[27] WB, p. XVII.Focus onSearchSearch …Interesting links

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