Borrowing or restructuring internaional organizaions in order exising debt:

7. Borrowing or restructuring internaional organizaions in order exising debt:

to ramp up North-South or South- South transfers. Despite being much This involves acive exploraion of smaller than tradiional volumes of domesic and foreign borrowing ODA, bilateral and regional South- opions at low cost, including South transfers can also support concessional, following careful social investments and warrant assessment of debt sustainability. atenion.

For example, South Africa issued municipal bonds to inance basic

5. Eliminaing illicit inancial lows: services and urban infrastructure. For countries under high debt Esimated at more than ten imes distress, restructuring exising debt the size of all ODA received, a itanic may be possible and jusiiable if the amount of resources illegally escape legiimacy of the debt is quesionable developing countries each year. and/or the opportunity cost in To date, litle progress has been terms of worsening deprivaions of achieved, but policymakers should vulnerable groups is high. In recent devote greater atenion to cracking years, more than 60 countries have down on money laundering, bribery, successfully re-negoiated debts, tax evasion, trade mispricing and and more than 20 have defaulted/ other inancial crimes that are both repudiated public debt, such as illegal and deprive governments Ecuador, Iceland and Iraq, direcing of revenues needed for social and debt servicing savings to social economic development.

programs.

8. Adoping a more accommodat- foreign exchange reserves:

6. Using iscal and central bank

ing macroeconomic framework:

This includes drawing down iscal This entails allowing for higher budget savings and other state revenues deicit paths and/or higher levels stored in special funds, such as of inlaion without jeopardizing sovereign wealth funds, and/or using macroeconomic stability. A signiicant excess foreign exchange reserves in number of developing countries the central bank for domesic and have used deicit spending and more regional development. Chile, Norway accommodaive

macroeconomic and Venezuela, among others, are frameworks during the global

Financing universal social protecion

recession to atend to pressing United Naions agencies and others, demands at a ime of low growth and

is fundamental to generate poliical to support socio-economic recovery.

will to exploit all possible iscal space Each country is unique, and all

opions in a country, and adopt the opions should be carefully examined,

opimal mix of public policies for including the potenial risks and

inclusive growth and social jusice. trade-ofs, and considered in naional

Quesions to consider on iscal space social dialogue. Given the importance

opions during naional dialogue of public investments for human

include:

rights and inclusive development, it is

i. Reprioriizing Public Spending: imperaive that governments explore

government expenditures all possible alternaives to expand

Can

be re-allocated to support social iscal space to promote naional socio-

investments that empower vulnerable economic development with jobs and

households? Are, for example, current social protecion.

military, infrastructure or commercial sector expenditures jusiied in light

Social dialogue: Fundamental to of exising poverty rates? Has a recent generate poliical will to exploit all study been conducted to idenify

potenial opions

measures to enhance the eiciency of current investments, including steps

Naional social dialogue is best to tackle and prevent corrupion and to ariculate opimal soluions in

the mismanagement of public funds? macroeconomic and iscal policy, the need for job and income security

ii. Increasing tax revenues: Have all and human rights. While in some

tax codes and possible modiicaions countries, naional development

been considered and evaluated to strategies and their inancing sources

maximize public revenue without have been shaped though social

jeopardizing private investment? Are dialogue, in many other countries

personal income and corporate tax this has not been the case. Public

rates designed to support equitable policy decisions have oten been

development outcomes? What taken behind closed doors, as

speciic collecion methods could technocraic soluions with limited or

be strengthened to improve overall no consultaion, resuling in reduced

revenue streams? Could minor tarif social investments, in lack of public

adjustments increase the availability ownership, adverse socio-economic

of resources for social investments? Is impacts and, frequently, civil unrest.

natural resource extracion adequately Naional triparite dialogue, with

taxed? Can tax policies beter respond government, employers and workers

to “boom” and “bust” cycles? Have as well as civil society, academics,

inancial sector taxes been considered

Financing universal social protecion

to support producive and social social and economic development? sector investments? Has there been any atempt to earmark an exising vi. Using iscal and foreign exchange tax or introduce a new one to inance reserves: Are there iscal reserves, for speciic social investments – taxes example, siing in sovereign wealth on property, inheritances, tourism, funds that could be invested in poor tobacco, etc.?

households today? Are excess foreign exchange reserves being maximized

iii. Expanding social security coverage and used to foster local and regional and contributory revenues: What is the development? percentage of workers contribuing to social security? Can contribuions to

vii. Borrowing or restructuring social security be extended to more debt: Have all debt opions been workers? Are current contribuion thoroughly examined to ramp up rates adequate? Is there scope social investments? What are the to introduce innovaions (e.g. distribuional impacts of inancing like Monotax in Lain America) to government

expenditures by encourage the formalizaion of addiional borrowing? Have diferent workers in the informal sector?

maturity and repayment terms been discussed with creditors? Has a public

iv. Lobbying for increased aid and audit been carried out to examine the transfers: Has the government legiimacy of exising debts? delivered a convincing case to OECD countries for increased aid, including viii. Adoping a more accommodaing budget support, to support the macroeconomic framework: Is the scaling up of social investments? Has macroeconomic framework too there been any formal or informal constricive for naional development? atempt to lobby neighboring or If so, at what cost to macroeconomic friendly governments for South- stability? Could increasing the iscal South transfers?

deicit by a percentage point or two create resources that could

v. Eliminaing illicit inancial lows: support essenial investments for Has a study been carried out or a the populaion? Are current inlaion policy designed to capture and re- levels unduly restricing employment channel illicit inancial lows for growth

and socio-economic producive uses? What can be done to development? curb tax evasion, money laundering, bribery, trade mispricing and other Lastly, have all opions been carefully inancial crimes are illegal and deprive examined and discussed in an open governments of revenues needed for social dialogue? Have all possible

Financing universal social protecion

iscal scenarios been fully explored? Is there any assessment missing from the naional debate? Are all relevant stakeholders, government, employers, workers, civil society, academics, United Naions agencies and others, being heard and supporive of an agreement that ariculates an opimal soluion in macroeconomic and iscal policy, the need for job and income security and human rights?

A good staring point for country level analysis is a summary of the latest iscal space indicators for 187 countries, available in Annex I of “ Fiscal Space for Social Protecion and the SDGs: Opions to Expand Social

Investments in 187 Countries ” 1 .

This Universal Social Protecion brief is based on the paper “Fiscal Space for Social Protecion and the SDGs: Opions to Expand Social Investments in 187 Countries ” by Isabel Oriz, Mathew Cummins and Kalaivani Karunanethy, published by the ILO, UNICEF

and UNWOMEN.

1 Available at: htp://www.social-protecion.org/ gimi/gess/RessourcePDF.action?ressource.res- sourceId=515377

A SHARED MISSION FOR UNIVERSAL SOCIAL PROTECTION