Developing countries will need to invest $1.2 trillion or an average 3.8% of their GDP while the low-income countries will need to pump in $80 billion or 16% of their GDP to guarantee at least basic income security and access to essential health care for all in 2020 alone, the International Labour Organisation has said.
ILO estimate shows currently, only 45% of the global population is effectively covered by at least one social protection benefit. The remaining population, more than four billion people, is completely unprotected.
“Since the onset of the Covid 19 pandemic, social protection financing gap has increased by approximately 30%. This is the result of the increased need for health-care services and income security for workers who lost their jobs during the lockdown and the reduction of GDP caused by the crisis,” the ILO said in its latest study released on Thursday.
Regionally, the relative burden of closing the gap is particularly high in central and western Asia, northern Africa and sub-Saharan Africa (between 8% and 9% of their GDP), it said.
ILO is of the view that the global community was failing to live up to the social protection legal and policy commitments it had made in the wake of the last global catastrophe — the 2008 financial crisis, even before the COVID-19 crisis.
“Closing the annual financing gap requires international resources based on global solidarity,” Shahrashoub Razavi, director of the ILO’s social protection department said.
Mobilization at the international level should complement national efforts, it said, adding that the international financial institutions and development cooperation agencies have already introduced several financial packages to help governments of developing countries tackle the various effects of the crisis but more resources are needed to close the financing gap, particularly in low-income countries.
ILO pointed out that the national and international measures to reduce the economic impact of the COVID-19 crisis have provided short-term financing assistance with some countries seeking innovative sources to increase the fiscal space for extending social protection, like taxes on the trade of large tech companies, the unitary taxation of multinational companies, taxes on financial transactions or airline tickets. “With austerity measures already emerging even with the crisis ongoing, these efforts are more pressing than ever,” the study said.