TNAG-0531-FCO40-626-Application-of-International-Labour-Convention-to-Hong-Kong-1975 — Page 51

29.

In

expense. workers whose

and

security scheme would pose administrative difficulties and additional many developing countries there are categories of independent livelihoods are somewhat precarious placing them in a similar or worse economic position than employees. With only a few exceptions, these types of self-employed persons remain outside the scope of protection mainly because they are unable to pay the necessarily higher rate of contribution, and also because there would be considerable problems of enforcement.

In nost developing countries, the agricultural sector is the largest employer of labour, and the great majority of the population lives in rural areas. That section which is employed in plantations other large-scale activities has been brought within the scope of some national schemes, but there are formidable difficulties in assimilating the traditional unorganised sector because of the special structure of farm employment, the seasonal and intermittent character of agricultural work, the low levels of incomes, the comparative dearth of medical facilities, the large non-cash element in remuneration, and the lack of a suitable institutional basis for the necessary administrative processes. Whilst suitable methods have been evolved in Australia, Japan, New Zealand and the USSR, in most of the developing countries the desire to extend social security coverage to rural areas cannot be realised without some basic institutional changes, and the evolution of special techniques, such as may arise from the research and other activities of the ILO. Meanwhile, the interest in crop insurance schemes and the spread of various types of co-operatives may prepare the groundwork for the future introduction of social security schemes adapted or designed to meet the special needs of the rural sector, a most necessary development if social security schemes are to play a truly effective role in all Asian countries.

In addition to its restricted scope in terms of categories and numbers of protected persons, another characteristic of social security of the developing countries of Asia is the limited provision for long-term contingencies,1 Whilst most other needs are met to varying extents by individual employer liability under labour legislation, and by social insurance measures (with limited provision for unemployment and family responsibilities), the protection in respect of old age, invalidity and death necessarily is derived from centrally organised national schemes, whether they are in the form of statutory provident funds, social insurance schemes or are on a non-contributory basis. Provident funds suffer from fundamental deficiencies as a form of long-term income protection, as discussed in other papers. There has been a reluctance on the part of some governments to launch pension schemes, due in part to the existence of provident funds set up many years ago, and also because of the mistaken impression that pension schemes may nct be adequate sources of capital for development purposes. However, there can be little doubt, judging from such indications as the recent initiatives of the authorities in the Republic of Korea and in Pakistan, that there is a greater degree of understanding of the flexible financial mechanism of pension schemes, and of their superiority over provident funds for the purpose of securing adequate protection in respect of the contingencies of old age, invalidity and death. This may be seen as a logical extension of the general recognition now clearly evident in developing countries of the effectiveness of social insurance principles for employment injury, as shown by the definite trend in establishing state funds for this purpose. Economic progress reflected in rising per capita incomes gives better prospects of establishing self- financed social insurance schemes. Coupled with improvements in the numbers of doctors and the availability of medical facilities, and also the growing administrative capacity, these are encouraging factors for the future evolution of effective social security schemes, which is given additional impetus by the continuing example shown by the already advanced schemes in Australia, Japan, New Zealand and the USSR.

The next stage of this study of trends and problems of social security in Asia will be to examine the effectiveness and shortcomings of the various types of social security measures now in force in the developing countries of the region. This will lead finally to a discussion of the perspectives for social security development in

Asia.

In the 1971 edition of "Social Security Programs Throughout the World" (US Department of Health, Education and Welfare, Social Security Administration, Office of Research and Statistics), it is stated that countries which have some type of old-age, invalidity and survivor benefit programme include 9 of the 12 Middle East countries, 22 of the 23 American and Caribbean countries, other than those in North America, 27 of the 41 in Africa, and 12 of the 26 countries in Asia, Oceania and the Pacific.

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