TNAG-0531-FCO40-626-Application-of-International-Labour-Convention-to-Hong-Kong-1975 — Page 165

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particularly concerns long-term contingencies such as old-age pensions in the event that they are financed by the funding system. In view of the relatively low level of life expectancy in the developing countries, this system may lead to the accumulation of considerable reserves which can be used for development purposes. The investment policy regarding su ch funds and particularly their social and economic utility will thus become a matter of great concern for development planners.

Recent writings on social security as a source of savings in the developing countries do not point to the existence of any special pattern. Social security net savings studied as a percentage of current wages, gross domestic investment or gross national product indicate variations stretching from less than one-half to over 23 per cent. An economic planner who tends to consider social security programmes as a means of mobilising savings from income groups which normally have a very low capacity to save, learns that "short-term risk protection programmes do not, as a rule, lead to a significant increase of savings" and that "the savings potential long-term social insurance programmes depends on the methods used to finance them",1

cf

Social security effects on consumption and production also enter into consideration as an important factor even if these effects can still be more easily supposed than measured. While the impact on consumption can be studied, at least in certain limited areas, with some degree of precision, research on the relationship between social security and production is still highly hypothetical and leaves ГОСТ for contradictory arguments.

of

Since social security is an institution which belongs essentially to what is generally described as social aspects of development, it is obvious that the whole this sector must be examined when planning a scheme. The extent to which social security fulfils its purpose can only be estimated if all other social measures with similar functions are taken into account, no matter what institutional forms they may take. In the developing countries and particularly in Asia special attention will have to be paid to the co-ordination of social security measures with those developed by other public agencies, not only in the medical care sector but in the field of social welfare services in general. The complementary nature of inccme maintenance and social services is evident and a developing country could ill afford a waste in specialised manpower and resources resulting from any lack of cc-

ordination.

Lastly, the planner should on no account disregard the political aspects cf the societal environment in which the social security plan is to operate. In this respect the chances of launching a scheme must be examined in the Light of the existing attitudes of the political parties and the different pressure groups with vested interest in social security, i.e. the trade unions, the employers and possibly some other professional organisations. It must not be forgotten that, in the last instance, it is the political attitude which people in a given country adopt towards a scheme that determines its chances of success. Although the planner does not make political decisions, the proposals he formulates and the alternatives he offers for adoption should take fully into account the political realities of the country.

Needless to say, a number of other factors may be examined in this context relating to the institutional or cultural aspects of development, for these are the factors which may determine whether the plan in a country will work or not. In addition, some international aspects of the situation will be of importance, particularly for the developing countries. Among these a prominent place will be taken by

the availability of technical aid provided by international organisations or through bilateral agreements. Considerations relating to international standards and practices currently used in other countries may thus play an important role in ensuring that the targets of a social security plan may be reached.

Having outlined the requirements of successful social security planning in developing countries, we may now confront this blue-print with some hard facts cf reality in order to determine whether the development goes in the desired direction.

1 See Paul Fisher: "Social Security and Development Planning: Some Issues", in E.M. Kassalow, ed., op. cit., p. 251.

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