The United Nations Development Program (UNDP) raised here The need to take a comprehensive look at social protection systems in order to provide a clear response to the challenges they present in the Latin American and Caribbean region, including the Dominican Republic.
UNDP observesserious deficiencies and a high fragility in the social protection systems, which understands that it must go towards universality in health insurance and pensions, always thinking about how they will be financed.
Representatives of the organization visited the country to promote a national dialogue that gives response to these systems, because the data shows that they work very poorly.
Marcela Meléndez, Chief Economist for Latin America and the Caribbean of the UNDP; and Santiago Levy Algazi, advisory economist to the Regional Bureau for Latin America and the Caribbean on social protection policies, visited the country with the aim of motivating discussion on the social protection system. Social security and social security in the LAC region. They visited Listín Diario in the company of Inka Mattila, resident representative of the United Nations organization.
During their visit, UNDP senior executives met with representatives of the Government, civil society, academics and business, the members of the reform roundtables, to contribute to this debate.
Mattila maintains that in the Dominican Republic it is a good in the discussion of reforms and therefore it is urgent to think about a transition towards universality in health and pensions.
Successful case, with more informality
The UNDP observes The Dominican Republic is a success story in terms of economic growth and has managed to reduce poverty quite significantly, but instead of decreasing informality has increased slightly in the last ten years. os.
In addition to the fact that more than 50% of Dominicans are not only self-employed or employed in micro-enterprises of less than five people, indicated Mattila.
Melendez explains that the big problem of the labor market and social protection precedes the pandemic,but it was evident more with Covid-19 in a region like Latin America, with weaknesses and some successes, “but ultimately where the fragility of protection systems is one of the elements that has contributed to us being a very unequal region and that we grow little.”
One of the strong themes of the region, according to Melendez, is that it was understood that social protection systems had to be based on transfer systems, when they should be focused on the care pillar to rescue those who have fallen into poverty and, on insurance, to respond in times of crisis. He gave the example of the immediate activation of unemployment insurance seen in first world countries.
that there were many workers in the informal sector, that they did not appear in the social registries and the reaction in the region was with the transfer registries because it was the only thing they had and that is why many people he stayed outside, but there was also no prosecutorial capacity to respond.
In this context, it revealed that the result of a joint survey with the World Bank is that food insecurity increased, and that growth was just as similar for those who received transfers from governments as for those who received nothing.
In the region, health security it is insufficient and in old age the same thing happens because there is a very high proportion in informality, almost 60% in the Dominican Republic, and whom governments try to attend to “playing caroms” with lower quality non-contributory systems or trying to serve poor people with transfers, he indicated.
La Chief Economist for Latin America and the Caribbean of the UNDP emphasized that only with transfers is not going to solve any problem, not even that of poverty.
“We have invented this imperfect system that depends on the status of worker so that one can contribute and have a pension. ;n. The challenge is one of universality. It is how we finance an old-age pension that is the same for all citizens, charged to the general tax budget and that does not depend on work status”, he stressed.
Specified In addition, as an addition, distortions are introduced into the labor market with payroll taxes and withholdings for workers, affecting the decisions of companies and workers.
The movie is not pretty
Santiago Levy Algazi ratified that “this is a good time to take a serious and in-depth look at the issue of social protection in Latin America”.
to the UNDP report and the The need to take a look, post-Covid-19, at the findings and, above all, at what has happened since the 1990s in the region and in Latin America since the 2000s, because “the movie ;cula it’s not pretty”.
Citing the specific case of the Dominican Republic, Levy Algazi emphasized in that the architecture of social protection in this country, which is also no different from any other in the Latin American region, “has a fundamental problem”, due to the fact that access to health insurance From retirement pensions to protection against invalidity, the gateway is a salaried job that was thought to be that it was going to cover universality, but that did not happen. nor will it happen.
The Dominican Republic, he said, is a perfect example of deeply segmented labor markets, with groups of formal workers and informal groups, where the informal only have access to some support if they are vulnerable poor, conditional on income below the poverty line. This system that operates in the Dominican Republic and also in all of Latin America, “and the data says that the global system operates very badly”.
Against this background the UNDP report says that it is necessary to have a comprehensive vision and an approach of how the social protection system should be restructured, which can be done gradually, because in the last three decades They have made reforms in health, pensions and transfers in Peru, Mexico, Colombia and others in the region, without the Dominican Republic being the exception, but “when we put the pieces of the clock together, the clock it does not mark the time”.
Patches have been made that have resulted in a patchwork quilt, because there is no point in adding yet another patch to the system.
And that is why the idea of participating in a dialogue with the authorities in the understanding that a system segmented by design is going to be able to achieve social cohesion. This is the purpose of our visit, he indicated. Levy Algazi.
Marcela Meléndez
Chief Economist for Latin America and the Caribbean of the UNDP. She has a Ph.D. in Economics from Yale University and is an Economist from Universidad de los Andes. Before joining UNDP in 2019, Marcela was a partner and director of ECONESTUDIO for 10 years, a Colombian economic research and consulting firm, recognized for its contributions to the public policy debate.< /p>
Santiago Levy Algazi
He is an advisor to the Regional Bureau for Latin America and the Caribbean (RBLAC) on Social Protection Policies. He is a Mexican researcher, politician and economist who has held various positions in the public administration of Mexico and international organizations. He recently he played as Vice President of Sectors and Knowledge of the IDB.