David, 14, transports gallons of palm oil for his father in Penja, in Cameroon’s Littoral region. Experts say there is a strong need for a people-centred approach if growth in Cameroon is to be resilient. Credit: Monde Kingsley Nfor/IPS

By Monde Kingsley Nfor
YAOUNDE, Jul 24 2014 (IPS)

For the last 13 years, Michael Ndah, 37, has worked for three road construction companies in Cameroon, but it is only in the last two years that his current employer has managed to register him with the National Social Insurance Fund (CNPS). 

The CNPS is a pension system for workers in the private sector but they can only join if they are signed up by their employers. Benefits also include medical and surgical care and hospitalisation. But Ndah’s CNPS cover does not provide for his family’s health.

“When my wife goes to the hospital I cannot use my insurance card for treatment and they say I must first pay in cash,” he tells IPS.

The labour code provides that seven percent of a worker’s salary is given to CNPS each month, with the highest salary calculated by the system being 300,000 CFA (about 640 dollars) — even if the person earns above this.

It is a contributive system where 2.8 percent of the payments are covered by the employee, with the remaining contributions covered by the employer. But with 640 dollars being the maximum wage allowed by CNPS, overall pensions are low.

And it’s a huge concern for Ndah.

“I don’t know if, before my retirement, I would have contributed enough to be eligible for a monthly pension payment,” Ndah worries.

The number of working-age people who are members of the CNPS is also low. According to the United Nations, about 53.3 percent of the country’s 21.7 million people are of working age (16 to 64 years). But only about 10 percent of them are insured by the CNPS.

“All workers in the formal sector are supposed to be registered with the social insurance [CNPS] eight days after signing an employment contract but many employers do not implement this law,” John Yewoh Forchu, a general inspector at the Ministry of Labour and Social Security, tells IPS.

The high rate of unemployment here – about 30 percent – favours most employers who do not run organised work environments and are not ready to sign any form of contract with employees.

Warda Ndouvatama, a Yaounde-based civil administrator and expert on social security and protection, says that most employers falsely declare the number of workers employed by their organisations to avoid social insurance contributions.

He tells IPS that this phenomenon is not only common in Cameroon but in many African countries where more than 70 percent of the population work in the informal sector and do not have employment contracts.

“This has a big impact on the ability of people to cope with present and future eventualities,” Ndouvatama says.

While countries in Africa are enjoying higher levels of economic growth and well-being, the latest annual Human Development Report by the U.N. Development Programme (UNDP) says that countries on the continent need to intensify their fight against deprivation.

The report states that by providing an additional and predictable layer of support, social protection programmes help households avoid selling off assets, taking children out of school or postponing necessary medical care, all detrimental to their long term well-being.

“One commonly held misconception is that only wealthy countries can afford social protection or universal basic services. As this report documents, the evidence is to the contrary. Except for societies undergoing violent strife and turmoil, most societies can — and many have — put in place basic services and social protection,” the report states.

Mutale Wakunuma, the Zambia country coordinator of the Africa Platform for Social Protection, agrees.

“We all know that there is overwhelming evidence of the role social protection plays in reducing extreme poverty and helping countries recover from crises, but we need these implemented in earnest by governments,” she tells IPS, pointing out that social protection programmes that help reduce poverty are few and far between.

“This failure to implement them in earnest is why the report observes that in spite of the progress, sub-Saharan Africa is the most unequal region in the world,” she adds.

Lisa Simrique Singh, senior economist at UNDP in Yaounde, says in terms of Cameroon and the global and national discussion post 2015, the focus is on “resilience and growth that leaves no-one behind.”

“There is thus a strong need overall for a people centred approach if growth in Cameroon is to be resilient,” she tells IPS.

“To this end there is need for a systemic approach which combines macro, sectoral and micro interventions in a meaningful way that responds to the real needs of the poor. And as a policy tool, there is a strong need for social protection to be mainstreamed into the overall growth agenda of the country.

“Social security currently exists but it is only one component of it since it covers and benefits only those in the formal sector, which account for around 10 percent of the population.”

Cameroon, however, is looking to reform the CNSP. Future changes will include increasing the monthly contribution from seven to 13 percent of a person’s salary, creating a security system for informal sectors and universal health coverage that guarantees access to medical treatment even when a patient has no money.

Officials at the fund also acknowledge that if nothing is done to get more people integrated in the fund by 2020, the social security system will be grounded. This is because very few formal sector workers and no informal workers benefit from social security and the existing social security does not cover many risks.

“The social insurance fund scheme of 1974 is old and major reforms have to be done because we have [a larger] ageing population than before the 1990s. In the 1990s, 10 workers were contributing for one retired person but today 10 workers contribute for six retired persons,” Forchu says.

He explained that the system in place is a social solidarity system where those working contribute to help those who are out of activity.

“Fewer people now contribute to retired people. The cost of living and prices has increased without a relative salary increase and workers’ pensions cannot really meet the standards of life today.”

*Additional reporting by Amy Fallon in Kampala, Uganda and Friday Phiri in Lusaka, Zambia.

Women sleep on a crowded train in Myanmar. Globally, some 1.2 billion people live on less than 1.25 dollars a day. Credit: Amantha Perera/IPS

By Amantha Perera
COLOMBO, Jul 24 2014 (IPS)

Millions still live in poverty and even those who have gained the security of the middle-income bracket could relapse into poverty due to sudden changes to their economic fortunes in South Asia, the latest annual Human Development Report by the United Nations Development Programme (UNDP) revealed.

“In South Asia 44.4 percent of the population, around 730 million people, live on 1.25−2.50 dollars a day,” said the report, released in Tokyo Thursday.

It went on to warn that despite the region’s gains, the threat of more of its citizens being pushed back into poverty was very real and that there were large disparities in income and living standards within nations.

“Many who recently joined the middle class could easily fall back into poverty with a sudden change in circumstances,” the report’s authors stressed.

“The most successful anti-poverty and human development initiatives to date have taken a multidimensional approach, combining income support and job creation with expanded healthcare and education opportunities." -- UNDP Human Development Report 2014
Here in Sri Lanka, categorised as a lower middle-income country by the World Bank in 2011, overall poverty levels have come down in the last half-decade.

The Department of Statistics said that poverty levels had dropped from 8.9 percent in 2009 to 6.7 percent by this April. In some of the richest districts, the fall was sharper. The capital Colombo saw levels drop from 3.6 percent to 1.4 percent. Similar drops were recorded in the adjoining two districts of Gampaha and Kalutara.

However the poorest seemed to getting poorer. Poverty headcount in the poorest area of the nation, the southeastern district of Moneralaga, increased from 14.5 percent to 20.8 percent in the same time period.

The disparity could be larger if stricter measurements aren’t used, argued economist Muttukrishna Sarvananthan.

“There is a very low threshold for the status of employment,” he told IPS, referring to the ‘10 years and above’ age threshold used by the government to assess employment rates.

“Such a low threshold gives an artificially higher employment rate, which is deceptive,” he stressed.

The UNDP report said that in the absence of robust safeguards, millions ran the risk of being dragged back into poverty. “With limited social protection, financial crises can quickly lead to profound social crises,” the report forecast.

In Indonesia, for instance, the Asian Financial Crisis of the late 1990s saw poverty levels balloon from 11 percent to 37 percent. Even years later, the world’s poor are finding it hard to climb up the earnings ladder.

“The International Labour Organisation estimates that there were 50 million more working poor in 2011. Only 24 million of them climbed above the 1.25-dollars-a-day income poverty line over 2007–2011, compared with 134 million between 2000 and 2007.”

Globally some 1.2 billion people live on less than 1.25 dollars a day, and 2.7 billion live on even less, the report noted, adding that while those numbers have been declining, many people only increased their income to a point barely above the poverty line so that “idiosyncratic or generalised shocks could easily push them back into poverty.”

This has huge implications, since roughly 12 percent of the world population lives in chronic hunger, while 1.2 billion of the world’s workers are still employed in the informal sector.

Sri Lanka, reflecting global trends, is also home to large numbers of poor people despite the island showing impressive growth rates.

Punchi Banda Jayasundera, the secretary to the treasury and the point man for the national economy, predicts a growth rate of 7.8 percent for this year.

“This year should not be an uncomfortable one for us,” he told IPS, but while this is true for the well off, it could not be further away from reality for hundreds of thousands who cannot make ends meet or afford a square meal every day.

While the report identified the poor as being most vulnerable in the face of sudden upheavals, other groups – like women, indigenous communities, minorities, the old, the displaced and the disabled – are also considered “high risk”, and often face overlapping issues of marginalisation and poverty.

The report also identified climate change as a major contributor to inequality and instability, warning that extreme heat and extreme precipitation events would likely increase in frequency.

By the end of this century, heavy rainfall and rising sea levels are likely to pose risks to some of the low-lying areas in South Asia, and also wreak havoc on its fast-expanding urban centres.

“Smallholder farmers in South Asia are particularly vulnerable – India alone has 93 million small farmers. These groups already face water scarcity. Some studies predict crop yields up to 30 percent lower over the next decades, even as population pressures continue to rise,” the report continued, urging policy-makers to seriously consider adaptation measures.

Sri Lanka is already talking about a 15-percent loss in its vital paddy harvest, while simultaneously experiencing galloping price hikes in vegetables due to lack of rainfall and extreme heat.

It has already had to invest over 400 million dollars to safeguard its economic and administrative nerve centre, Colombo, from flash floods.

“We are getting running lessons on how to adapt to fluctuating weather, and we better take note,” J D M K Chandarasiri, additional director at the Hector Kobbekaduwa Agrarian Research Institute in Colombo, told IPS.

Smart investments in childhood education and youth employment could act as a bulwark against shocks, the report suggested, since these long-term measures are crucial in interrupting the cycle of poverty.

The report also urged policy makers to look at development and economic growth through a holistic prism rather than continuing with piecemeal interventions, noting that many developed countries invested in education, health and public services before reaching a high income status.

“The most successful anti-poverty and human development initiatives to date have taken a multidimensional approach, combining income support and job creation with expanded health care and education opportunities and other interventions for community development,” the reported noted.

(END)