TO ADVANCE ANY reasonable argument in support of a rather close relationship between social security and economic development, it would be necessary, if only for clarity, to first highlight what precisely is meant by economic development.
And that makes sense given the extensive definitions that can be found in the literature of that important term.
Envisaged generally by Gerald Meier, “economic development may be thought of as the process whereby countries attain a rise in their per capita income, achieve a diversification of their production and employment structures, and secure an improvement in the standard of living of their population.
Hence, this process involves quantitative growth, qualitative transformation, and economic welfare and affects individuals as well as the broader structures of the national economy within which they act and interact”.
To translate this definition of economic development into practical terms, one has to first determine the precise goal of this phenomenon. In so doing, it is likely that you will come across several different approaches to economic development in the literature.
One such approach is outlined by famous British development theorist, Dudley Seers, who sees economic development as a mechanism for fashioning the circumstances for the “realisation of the human personality”.
These, Seers notes, are: food, a job and equality. Consequently, for Seers, the primary objectives of economic development are to reduce poverty, unemployment, and income inequality inside an emergent economy.
If these are primary goals of economic development, does social security have any role to play within the process? An understanding of the concept of social security as well as some of the critical issues involved may very well shed light on this important question.
The World Social Security Report 2010/11: Providing coverage in times of crisis and beyond, defines social security as “measures providing benefits, whether in cash or in kind, to secure protection, inter alia, from (a) lack of work-related income (or insufficient income) caused by sickness, disability, maternity, employment injury, unemployment, old age, or death of a family member; (b) lack of access or unaffordable access to health care; (c) insufficient family support, particularly for children and adult dependants; (d) general poverty and social exclusion.”
Even a cursory examination of most of the websites for the various National Insurance Schemes in the Caribbean would reveal several benefits provided to the insured, covering crucial areas such as old-age pension, partial pension, old-age settlement, old-age assistance, disability pension, disability settlement, survivor pension, and funeral grant.
Clearly, therefore, whether conceptually defined as done in the World Social Security Report or practically executed as in the case of actual benefits granted by our various social security schemes, there is no ambiguity in terms of the consistency between the functions and purpose of social security and the goals of economic development, reflected through Seers’ eyes.
There is no doubt, therefore, that social security can assist greatly in the development of our region, especially in these crucial times of economic turmoil. But that nexus depends to a large extent on how precisely the funds from our various schemes are utilised.
This issue and others will be addressed in next week’s column from a historical perspective, drawing on the experience of setting up the National Insurance Scheme in Grenada in the early 1980s.
Email: bfrancis@uwi.edu.bb