Funcionamiento del Sistema del Avión Super King Air

Appendix Table A2.2 summarizes the potential financing strategies for the sample countries arranged according to the five country groups. The model calculation demonstrates that a low-cost version of the social protection floor seems to be affordable in at least 17 countries. Only in the countries belonging to group V would increases in taxation be necessary. In all of the other countries, improved tax and contribution collection, combined with some expenditure reallocation (notably a reduction in subsidies), are deemed sufficient to finance closure of the gap in basic social protection.

Increased Taxation

Even the suggested increases in taxation do not seem to constitute an undue burden by international standards. Appendix Table A2.3 shows the mean and standard deviation of tax–GDP ratios in the low- and lower middle-income sample countries. It also groups these into brackets of “mean plus one standard deviation” and “mean plus two standard deviations.”39 _{Except for five cases, all}

countries fall in the “mean plus one standard deviation” bracket. If increases in

39 _{Some countries actually have lower tax rates than “mean minus one standard deviation.” This is not}

taxes (measured in percentage points of GDP) suggested here in six countries (i.e., Cambodia, India, the Lao PDR, Nepal, Pakistan, and the Philippines) are added to the present tax–GDP ratios of these countries, none of these countries would leave the “mean plus one standard deviation” bracket. This may serve as an indication that the tax hikes suggested here are by no means excessive. The volume of revenues that theoretically can be generated by the income tax increases listed in Appendix Table A2.3 could also be realized by increases in other existing tax categories, or by introducing new taxes, such as

(i) Excise taxes. An increase in excise taxes, such as “sin taxes” on alcohol, tobacco, and luxury goods, or introduction of new excise taxes at the same level (as measured in percentage points of GDP) would not lead to indirect tax rates outside of the “mean plus one standard deviation” bracket for that category of taxes.

(ii) New form of income taxation earmarked for social protection. This could be a social protection tax applied to all personal income, which would finance all, or part, of the social protection expenditure for the informal sector on the basis of national solidarity.40 _{Levying a social}

protection tax of 4.0%–4.5% on all incomes would probably solve the social protection financing problem in all countries, and would, in some cases, even contribute to general consolidation of the government budget.41

Exceptional Cases

Only in two countries (i.e., Bangladesh and Papua New Guinea) could realistic proposals for financing closure of basic social protection gaps from domestic resources not be made. Since these countries have very high poverty rates, there may be a case for external financial support. The annual support for closing the basic social protection gap in Bangladesh requires $5.40 billion, with support for Papua New Guinea requiring $0.70 billion per year.

The present level of global official development assistance only amounts to $125.00 billion. This demonstrates that external funding of social protection in the longer term for more than a very few countries would not be possible without a major new global funding facility for social protection, such as the Global Fund for Social Protection, which the United Nations special rapporteurs on the right to food and on extreme poverty and human rights suggested in

40 _{Since 1991, France has charged such a general social tax, the contribution sociale generalisée, which}

is levied at a flat rate of 7.5% on all incomes, and by now constitutes a larger share of all income tax revenues than the normal progressive personal income tax.

October 2012. Such a fund could be fueled by part of the proceeds of a global financial transaction cost.

Conclusions

Except for two of the sample of 20 countries in Asia (i.e., Bangladesh and Papua New Guinea), financing at least a basic level of social protection for all people appears affordable without triggering undue overall levels of taxation.42

The above notwithstanding, an important caveat remains: investment in good governance is a prerequisite to all new social protection financing and delivery strategies. Whenever new benefit systems are designed, or preexisting benefits are extended to new groups, investments in human resources who must administer these benefits, as well as in the machinery necessary for collecting additional taxes or contributions, must be made. This means that countries should begin addressing the problem of informality. Without reductions in informality, revenues are not likely to increase substantially, and new expenditure cannot be financed. Further, if contributions and tax collection are not effectively enforced, no sustainable extension of social protection to the uncovered population is possible. Even before the first new social protection benefits can be paid and the first additional currency unit of taxes or contributions can be collected, such upfront investments should be made and financed.

The following recommendations are made for closing the social protection gaps in Asia, at least at the level of the social protection floor.

Governments should undertake investments in tax and contribution collection mechanisms, as well as in capacity development of social protection planners, managers, and administrators. They should also begin a national dialogue with the objective of establishing a consensual national social protection development plan, along with national social protection diagnostic exercises. This includes taking stock of existing schemes, their expenditure levels, their incidence of financing, and their performance. Further, a social protection gap analysis should be undertaken to support the national dialogue.

42 _{The database for Myanmar did not allow full exploration of a financing strategy; thus, the Myanmar}

country case must remain inconclusive in this chapter. However, the United Nations system in Myanmar suggested the feasibility of a social protection floor in Myanmar: “This opportunity to reduce poverty through the extension of social protection and to finance it at least in part through a combination of budgetary reallocations and modest tax increases may warrant a critical public expenditure and revenue review” (ILO and United Nations Country Team in Myanmar 2015). This indicates that in Myanmar, some closure of social protection floor gaps is also probably fiscally feasible.

Governments should also consider extending social insurance coverage to workers in the informal sector. Perhaps even introducing tax-financed universal—or where necessary—means- and benefit-tested child benefits, employment guarantee schemes, and invalidity and old-age pensions in a gradual process, but within a set time frame of not more than 1 decade, should occur. All schemes would, in principle, be schemes for the entire population, but the majority of new beneficiaries would be in the informal sector. Introducing new schemes exclusively for the informal sector or even the poor does not seem a rational strategy and would just lead to further fragmentation of the national social protection system. There would also be the risk that schemes for the poor would turn into poor schemes.

In exceptional cases, governments should begin to consider obtaining external financing. However, in the long run, social protection financing should be largely domestic. External financing should not be considered without a clear exit strategy from exogenous financing.

Where necessary, the revenue-generating potential and redistributive effects of tax increases (notably in notoriously low personal income tax rates) or introduction of new taxes (in the form of new or higher excise taxes, or a general social protection income tax) should be analyzed. Following this, revenue-generating measures should be expeditiously introduced.

Civil society organizations and trade unions should actively promote the right to social protection floors, and thus help create the political will for its institutionalization. They can also support national stocktaking exercises and the design of national social transfer schemes. Further, civil society organizations and trade unions should monitor implementation of national social protection. Multilateral and bilateral donors should continue and intensify funding of projects that invest in good social and fiscal governance, as well as national capacities for designing, implementing, and administering national social protection systems efficiently and effectively. They can provide, in exceptional cases, transitional financial support for financing benefits.

Finally, the United Nations and other development partners should develop a support facility that helps countries invest in good governance, as well as development of an analytical framework for stocktaking exercises and fiscal space analyses, and possibly for setting up new, or revamping existing, social protection institutions. This may be linked to the new Social Protection Inter-Agency Cooperation Board created in 2012 at the behest of the G20 countries. They can also consider the creation of a new global financing facility, such as a special multidonor fund for social protection that provides transitional financing for social protection in exceptional cases.

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