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Brussels - Many countries world wide subsidise certain aspects of the economy in various forms. Yet the poorest people are short-changed.
This is one of the central conclusions in a new report by the World Bank, The State of Social Safety Nets 2014.
The report cites the example of Indonesia, which spends 2.6% of its gross national product (GNP) on fuel subsidies. The problem with this is that the rich profit along with the poor; and actually they profit more, because they use more fuel than the poor.
When it comes to a social safety net – money that is paid out only to the poor – the country spends only 0.8% of its GNP.
The same applies to countries such as Egypt, Iraq and Ecuador, who spend even more on fuel subsidies and even less on a social safety net.
The report also states that South Africa spends about 3.4% of its GDP on social safety
nets. Its child support grant is the most generous in Africa. The country is classified as having an upper-middle income.
The report defines social safety nets as “regular and predictable transfers in cash or in-kind to poor and vulnerable people”. These “are critical for reducing poverty, boosting inclusive growth and shared prosperity, reducing food insecurity and malnutrition, increasing demand for education and health services, stimulating local economies and for helping households to better manage risks and cope with shocks”.
The report also states that social safety nets “are not just about assistance – they are an important ingredient for building and strengthening social contracts between states and their citizens”. Data from 146 countries was used.
According to the report, more than a billion people in 146 countries benefit from state subsidies of some kind. Yet 870 million people of the world’s poorest remain uncovered.
In countries classified as low-income, where 47% of the population is extremely poor, less than 10% of the population – often those who do not really need it – are covered by social safety nets.
In lower-middle income countries, a quarter of the poorest are reached, but the remaining 500 million remain uncovered. And in upper-middle income countries, a full 45% of the poorest are reached.
In other words, the poorer a country, the more poor receive no help at all.
In total $337bn a year is spent on social safety nets. This is twice as much as is needed to provide the 1.2 billion poorest with a subsistence of $1.25 a day, which shows that many people who do not actually need it receive state help of one kind or another.
- Fin24
This is one of the central conclusions in a new report by the World Bank, The State of Social Safety Nets 2014.
The report cites the example of Indonesia, which spends 2.6% of its gross national product (GNP) on fuel subsidies. The problem with this is that the rich profit along with the poor; and actually they profit more, because they use more fuel than the poor.
When it comes to a social safety net – money that is paid out only to the poor – the country spends only 0.8% of its GNP.
The same applies to countries such as Egypt, Iraq and Ecuador, who spend even more on fuel subsidies and even less on a social safety net.
The report also states that South Africa spends about 3.4% of its GDP on social safety
nets. Its child support grant is the most generous in Africa. The country is classified as having an upper-middle income.
The report defines social safety nets as “regular and predictable transfers in cash or in-kind to poor and vulnerable people”. These “are critical for reducing poverty, boosting inclusive growth and shared prosperity, reducing food insecurity and malnutrition, increasing demand for education and health services, stimulating local economies and for helping households to better manage risks and cope with shocks”.
The report also states that social safety nets “are not just about assistance – they are an important ingredient for building and strengthening social contracts between states and their citizens”. Data from 146 countries was used.
According to the report, more than a billion people in 146 countries benefit from state subsidies of some kind. Yet 870 million people of the world’s poorest remain uncovered.
In countries classified as low-income, where 47% of the population is extremely poor, less than 10% of the population – often those who do not really need it – are covered by social safety nets.
In lower-middle income countries, a quarter of the poorest are reached, but the remaining 500 million remain uncovered. And in upper-middle income countries, a full 45% of the poorest are reached.
In other words, the poorer a country, the more poor receive no help at all.
In total $337bn a year is spent on social safety nets. This is twice as much as is needed to provide the 1.2 billion poorest with a subsistence of $1.25 a day, which shows that many people who do not actually need it receive state help of one kind or another.
- Fin24
