Written by Areum Han (Associate Social Affairs Officer), Katinka Weinberger (Chief), Sayuri Cocco Okada (Social Affairs Officer), Selahattin Selsah Pasali (Social Affairs Officer), Stefan Urban (Social Affairs Officer), and Zilu Zhou (Associate Social Affairs Officer) from the Social Development Division at UN ESCAP.

The international community has positioned social protection as a key enabler to achieve the 2030 Agenda for Sustainable Development, echoed throughout normative frameworks of the United Nations and other international and regional bodies. Recently, social protection together with decent jobs, was identified as one of the six transitions and investment pathways to accelerate the achievement of the Sustainable Development Goals (SDGs) by 2030 (UNSDG, 2023).

A review of risks and challenges affecting the Asia-Pacific region underscores why strong and inclusive social protection systems are so important. Amidst increasing poverty and inequality since the onset of the COVID-19 pandemic, Asia and the Pacific is at a crossroads, facing climate change, demographic shifts including ageing, and digitalization that will further change its risk landscape. It is estimated that an additional 42 million people in Asia and the Pacific were pushed into extreme poverty in 2022 relative to pre-COVID levels (UN ESCAP, 2024). Based on a higher poverty line of $3.65, an additional 156 million people are estimated to have fallen into poverty. Equally important is that millions of households live just above the poverty line.

Climate change drives poverty and inequality

The negative impacts of climate change are being felt all over Asia and the Pacific and have started reaching previously unaffected territories, resulting in loss of life and livelihoods. For example, China, India, Pakistan and the Philippines accounted for 62 per cent of all internally displaced people globally in 2022, due mainly to flooding (UN ESCAP, 2023a). Heat waves increasingly lead to loss of potential working hours, with South and South-West Asia alone accounting for at least 250 billion of the 490 billion potential labour hours lost in 2022 (The Lancet Countdown, 2024) and the number of older persons expected to be exposed to heatwaves by 2050 in Asia and the Pacific is four times larger than in all other regions combined (Falchetta et al., 2024). Even under the 1.5-degree global warming scenario, which according to projections is likely to be surpassed, 85 per cent of the Asia-Pacific region’s population is expected to be exposed to multi-hazard risks (UN ESCAP, 2023b).

The exposure and vulnerability to climate-change-induced events and coping capacity are by no means equal between and within countries. For example, in Vanuatu, 61 per cent of households were directly affected by a cyclone or storm between 2016 and2019, but exposure was twice as high in rural areas as compared to urban areas. The highest exposure to cyclones and storms was by women-headed households in rural areas with 71% (Figure 1).

Figure 1 Exposure to Cyclones and Storms in Vanuatu (2016-2019)

Source: ESCAP estimates based on Vanuatu National Sustainable Development Plan Baseline Survey (2019) shared by Vanuatu Bureau of Statistics covering 4,509 households.

Note: This binary regression tree is estimated using Classification and Regression Tree Analysis which aims to capture the intersectionality of circumstances that lead to differential outcomes within mutually exclusive population groups. For more information on this methodology, visit ESCAP LNOB Platform.

Beyond direct climate event impacts, the impact of climate policies needs to be considered. While mitigation efforts to reduce greenhouse gas emissions are essential to address the climate crisis, such policies can have far-reaching effects, including potential job losses and shifts in economic structures (UN ESCAP, 2022). Sectors expected to go through a significant transition in Asia and the Pacific include agriculture, construction, transport and energy. Populations in vulnerable situations are especially exposed to challenges during this transition.

Social protection can be a powerful policy tool to support people affected by climate change policies and events, as it directly supports people’s health, income, and food security and helps those affected by climate change-induced displacement. Traditional social security schemes, such as unemployment protection schemes, provide income security during periods of unemployment, which may result from climate change events such as floods or tropical cyclones. Providing regular and predictable transfers across the life cycle reduces uncertainty and helps build resilience. Access to cash and other transfers before shocks can help people develop better coping strategies prior to shocks or get back on their feet faster post shocks.

Social protection systems will increasingly have to buffer the impacts of climate mitigation and adaptation policies to enable the transformative changes needed while also ensuring a just transition. This will require harnessing synergies and strengthening coordination with climate change initiatives, as well as social, economic and environmental policies and funding mechanisms. It is important to note that a fragmented and uncoordinated approach will likely diminish the impact of measures addressing the social consequences of climate change.

Asia-Pacific is ageing. Fast.

Asia and the Pacific is the fastest ageing region in the world, with the old-age dependency ratio expected to double by 2050 (UN DESA, 2020), while labour force participation rates are steadily declining.  By 2050, the share of individuals over 60 years old is projected to rise to 25 per cent, totaling 1.3 billion people (UN ESCAP, 2023c). In parallel, the working age and youth population is expected to decrease while demand for productive and decent work is expected to grow, especially for women. Despite women living longer, they often have less access to pensions and social security systems, leaving them financially more vulnerable in old age. Countries in the region are aging rapidly, with less time to adjust policies before demographic shifts take full effect.

To harness the benefits and address potential challenges arising from population ageing, countries in the region will need to strengthen pension systems, healthcare, and long-term care services, ensuring that these investments do not overburden public budgets. The goal is a smooth transition to an aged society, also paying attention to gender disparities. Financially sustainable pension systems that provide adequate benefits are imperative in an aged society to protect women and men from poverty in old age and to alleviate pressure on informal social protection arrangements, often provided by family members.

Digital transformations need to be harnessed for the good

As social protection systems become increasingly digitalized, schemes are becoming more accessible and efficient. Digitalized social protection information systems can maximize efficiency gains, helping to enhance coordination of data and reducing duplication. Digital payments enable transparent and efficient disbursement of benefits. However, the impact of digitalized social protection systems is contingent on achieving digital inclusion in Asia and the Pacific. Gaps in digital inclusion persist in Asia and the Pacific, where on average, 17.3 per cent of people in the region have a fixed broadband subscription, just 61.2 per cent of the population is using the Internet, and digital literacy rates range between 4 and 42 per cent of the total population (ITU, 2024).

Advances in technology and digitalization are automating different tasks and impacting demand for low-skilled labour, carrying the risk of replicating or exacerbating existing inequalities. The role of active labour market policies, such as building requisite technical and non-technical skills, remains untapped in the region, especially in support of people in vulnerable situations. Digital inclusion will be critical to enable the full capacity of digitalized social protection systems to reach those left furthest behind. Social protection systems will need to navigate these transformations to harness the power of technology to foster more inclusive and comprehensive social protection systems. The new types of work being created, such as platform-based work, need legal clarity to ensure access to social protection.

Steady but slow progress on social protection in Asia and the Pacific

Asia and the Pacific is making slow but steady progress in efforts to implement nationally appropriate social protection systems and measures for all, including social protection floors, and by 2030 achieve substantial coverage of the poor and the vulnerable (SDG target 1.3). Comparing the level of coverage between 2016 and 2022 in Asia-Pacific countries with available data, the region has made progress in extending coverage in main contingencies (excluding health) across the life cycle, in line with the concept of the social protection floor, covering children, persons with disabilities, people of working age, and those in old age,.

However, gaps in coverage and adequacy mean that many people, especially those in marginalized situations, are left unprotected. Social protection systems are all too often fragmented and under-resourced. Non-contributory poverty-targeted programmes fail to reach all intended beneficiaries, and the spread of contributory schemes remains thin.

The speed of change brought on by the megatrends discussed above adds urgency to close existing gaps. Universal, lifecycle, and multi-tiered social protection systems are needed to ensure a minimum income security for all people and build their resilience.

More investment is required and can be within reach

Countries in Asia and the Pacific on average spend only 7.5 per cent of GDP on social protection, compared to the global average of 12.9 per cent of GDP (ILO, 2022).  One third of countries in the region—mostly in the Pacific and South-East Asia—spend less than two per cent of GDP on social protection. About two-thirds of existing spending on social protection relates to schemes for older persons. This low level of spending will not be enough to protect people from falling into poverty and inequality as a result of anticipated changes from climate change, demographic shifts, particularly population ageing, and the emergence of digital technologies. Under a worst-case scenario, about 266 million additional people could fall into poverty by 2040 (Raihan, forthcoming).

More investment is required to address existing gaps and release the potential of social protection systems to build more protected and resilient populations, but such investment is not out of reach. Estimations from the SPOT Simulator show that the cost of universal, non-contributory benefits—at a benefit level in line with the global average—for four key lifecycle contingencies (child, disability, maternity and old age) would cost 3.3 per cent of GDP in 2030 in the region. Providing more generous benefits would increase the average cost to 4.3 per cent of GDP. These figures demonstrate that the implementation of universal non-contributory schemes is not out of reach, since most countries already spend over 2 per cent of GDP on social protection.

Future proofing social protection

Social protection will need to evolve to mitigate the above challenges. Future proofing social protection starts with the establishment of a universal social protection floor anchored in legislative and policy frameworks. The ideal multi-pillar social protection system blends non-contributory and contributory schemes and can be extended incrementally to achieve full coverage and adequate benefit levels. Universal non-contributory programmes would be an effective way to ensure everyone, especially poor and those at risk of falling into poverty, has access to income security when needed.

Some key areas to future proof social protection are highlighted below.

• Integrated Social Protection Schemes: Countries need to design integrated social protection schemes that forge greater linkages with different social services such as care and support services, education, health, nutrition, or employment, as well as climate policies. This requires stronger cross-sectoral and inter-ministerial collaboration. An iterative and integrated approach across government is key, particularly to reach population groups at the highest risk of being left behind.
• Building Capacities to Address Climate Risks: Capacities need to be built to identify, forecast and address climate risks, as well as new vulnerabilities related to health, food, income security, and human mobility. This will require better linkages with early warning systems and a better understanding of intersectional inequalities and how they relate to climate risks, especially for vulnerable groups such as women.
• Addressing Demographic Transitions: The demographic transitions underway will increase demand for old-age pensions and put upward pressure on pension costs. This will require a substantial extension of both non-contributory and contributory pension schemes.
• Harnessing Technological Change: Technological advancements offer opportunities to enhance social protection systems. Inclusive design and implementation, as well as ensuring respect for the data rights and privacy of beneficiaries, will be critical to ensure these changes reinforce positive development outcomes for all.

Only when anchored in strong foundations—policies and laws built through participation, with transparency and accountability— can social protection systems help meet the challenges ahead. Done right, social protection can build people’s resilience, facilitate adaptation and mitigate negative impacts of change. In October 2024, countries from Asia and the Pacific will gather at the United Nations Conference Centre, Bangkok for the eighth session of the ESCAP Committee on Social Development to deliberate on ways to develop inclusive policies that address rising poverty and widening inequalities in view of climate change, demographic shifts and digitalization. Social protection will be among one of the priority policy tools addressed at this meeting to meet this challenge and build the resilience of people and foster peace and prosperity in the region.

References

Falchetta, G., De Cian, E., Sue Wing, I. et al. Global projections of heat exposure of older adults. Nat Commun 15, 3678 (2024). https://doi.org/10.1038/s41467-024-47197-5.

International Labour Office (ILO). 2022. ‘World Social Protection Report 2022’. Geneva. https://www.social-protection.org/gimi/Media.action;jsessionid=Kf5sZVZlazE54oro4dVXL6qxxlhBE _jIujhCFFN1LM1b1Ml3hRLs!-1635723311?id=18683

International Telecommunication Union (ITU), ITU Datahub. https://datahub.itu.int/ (accessed in April 2024).

Raihan, Selim (forthcoming). ‘Cost of Inaction on Social Protection in Asia and the Pacific: A CGE Model for 27 Countries’. ESCAP Social Development Division Working Paper Series. Bangkok.

The Lancet Countdown. ‘Tracking progress on health and climate change’. Data platform https://www.lancetcountdown.org/data-platform/ (accessed on 12 March 2024). 

United Nations Department of Economic and Social Affairs (UN DESA), Population Division. 2020. ‘World Population Ageing 2020 Highlights: Living arrangements of older persons’ (ST/ESA/SER.A/451). https://www.un.org/development/desa/pd/sites/www.un.org.development.desa.pd/files/undesa_pd-2020_world_population_ageing_highlights.pdf

United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP). 2022. ‘Social Outlook for Asia and the Pacific: the workforce we need’. Bangkok. https://www.unescap.org/kp/2022/social-outlook-asia-and-pacific-workforce-we-need

UN ESCAP. 2023a. ‘Asia-Pacific Population and Development Report 2023’. Bangkok. https://www.unescap.org/kp/2023/asia-pacific-population-and-development-report-2023

UN ESCAP. 2023b. ‘Asia-Pacific Disaster Report 2023: Seizing the Moment. Targeting Transformative Disaster Risk Resilience’. Bangkok. https://www.unescap.org/kp/2023/seizing-moment-targeting-transformative-disaster-risk-resilience

UN ESCAP. 2023c. ‘Asia-Pacific Population and Development Report'. Bangkok.

UN ESCAP. 2024. ‘Economic and Social Survey of Asia and the Pacific 2024: Boosting affordable and longer-term financing for governments’. Bangkok. https://www.unescap.org/kp/2024/survey2024

United Nations Sustainable Development Group (UNSDG). 2023. ‘Six Transitions: Investment Pathways to Deliver the SDGs’. https://unsdg.un.org/resources/six-transitions-investment-pathways-deliver-sdgs