Social Protection Resource Centre

Social Protection Challenges and Opportunities in Pakistan: Learning Prospects from Scandinavian Countries

Author: Saad Khalil (Research Assistant)

Introduction
Social protection systems play a crucial role in ensuring the well-being of individuals and communities, particularly in the face of economic and social challenges. As per the United Nations Research Institute for Social Development (UNRISD), social protection is defined as preventing, managing, and overcoming situations that adversely affect people’s well-being. The Scandinavian nations, known for their comprehensive welfare systems, have served as a model for social protection that many countries around the world seek to emulate. These countries, including Denmark, Norway, and Sweden, have implemented social protection systems that provide wide population coverage, adequate benefit levels, and affordability. However, while Scandinavian countries have made significant strides in social protection, challenges still persist. These challenges provide valuable lessons and insights for Pakistan’s landscape. In this context, it is significant to explore the state of social protection in Scandinavian countries and its relevance, challenges, and opportunities for Pakistan. By examining best practices, this analysis aims to shed light on potential avenues for improving social protection in Pakistan.

Challenges in Pakistan’s Social Protection System
In Pakistan, social protection systems face several confronts that hinder their effectiveness in adequately supporting the population. One of the primary challenges is the limited coverage of social protection programmes, which results in a large segment of the population being excluded from vital assistance. Additionally, the benefit levels of existing programs are often insufficient to meet the beneficiaries’ basic needs, leading to persistent poverty and vulnerability. Another critical issue is the lack of affordability and sustainability of social protection systems in Pakistan. Funding constraints and inadequate resources pose significant obstacles to the expansion and improvement of social protection programs. Furthermore, the fragmented and often overlapping nature of social protection schemes contributes to administrative complexities and inefficiencies, ultimately impacting the delivery of services to those in need. The complex socio-political and socio-economic landscape, rapid urbanisation, elevated levels of informality in the labour market, and the replacement of existing public policies of the elected government by the succeeding government due to political instability have further exacerbated the challenges faced by the social protection system in Pakistan. These factors underscore the urgency of addressing the shortcomings and exploring innovative approaches to enhance the effectiveness of social protection in the country. The experiences and strategies adopted by Scandinavian countries in overcoming similar challenges can offer valuable insights and practical solutions for enhancing social protection in Pakistan and the broader South Asian region as well. By leveraging the lessons learned from successful models, policymakers and stakeholders can work towards building more inclusive, sustainable, and comprehensive social protection systems that effectively address the population’s diverse needs.

Opportunities for Social Protection in Pakistan
In the era of globalisation and socio-economic modernization, the Scandinavian welfare model stands resilient in the regional and global arenas. As an example of resilience, according to the Organization for Economic Co-operation and Development (OECD), the employment rate in Sweden for the age group of 15-64 was 77.3% in 2020, and the poverty rate was 8.3% as of 2021, according to Eurostat. Similarly, the literacy rate was nearly 100% for adults aged 15 and above in 2021, according to UNESCO, and when it comes to the health sector, the life expectancy at birth was approximately 83 years in 2021, according to the World Bank – Life Expectancy at Birth, Total (Years). In addition, Denmark has established several mechanisms to address social protection challenges even during political instability. There is a strong tradition of cross-party consensus on key social policies, which comprise universal healthcare, unemployment benefits, pensions, and childcare support, ensuring continuity and stability in social protection measures. On top of that, social protection policies in Denmark are often designed with long-term sustainability in mind. This includes measures to address demographic changes, economic fluctuations, and social challenges, providing a level of resilience to political instability. These are some of the key findings from the top-performing countries in the European Union (EU), through which one can always strategically analyse the strengths, weaknesses, opportunities, and threats and mobilise the national resources to meet the national objectives.

While Pakistan, which lies in the Global South, faces significant challenges in its social protection systems, there are always opportunities for improvement and enhancement. One of the key opportunities lies in learning from the experiences of Scandinavian countries and adapting their successful strategies to Pakistan’s context. Scandinavian countries have demonstrated the high effectiveness of universal social protection systems that ensure broad population coverage and provide adequate support to individuals and families at large. By studying the design and implementation of the Scandinavian welfare model, Pakistan can always identify best practices and institutional frameworks for expanding its own social protection programmes. This includes developing mechanisms to increase coverage, improve benefit levels, and ensure the sustainability of social protection initiatives. Additionally, the Scandinavian model emphasises the integration of social protection with labour market policies and employment opportunities. This holistic approach recognises the interconnectedness of social protection and economic development, offering valuable insights for Pakistan grappling with important levels of informality in the labour market and economic disparities. By incorporating similar integrated strategies, Pakistan can strengthen the link between social protection and inclusive growth, fostering resilience and reducing vulnerability among the population.

Furthermore, the experience of Scandinavian countries in financing and managing social protection systems provides valuable lessons for Pakistan and South Asian nations, as well as seeking to address funding constraints and administrative complexities. By exploring innovative financing mechanisms, such as progressive taxation and strategic allocation of resources, South Asian countries, including Pakistan, can devise sustainable funding models for their social protection programmes. Moreover, streamlining and harmonizing the fragmented landscape of social protection schemes can improve efficiency and ensure that resources are utilized effectively to reach the most vulnerable and marginalized communities. The opportunities for enhancing social protection also extend to leveraging technology and data-driven approaches to optimise programme delivery and targeting. Scandinavian countries have embraced digital solutions and evidence-based policy design to enhance the effectiveness of their social protection systems. By adopting similar technological innovations and digitalization techniques and leveraging data analytics, Pakistan can effectively combat and overcome administrative challenges and enhance the precision and impact of its social protection initiatives.

Conclusion
The analysis of social protection systems in Scandinavian countries, i.e., Denmark, Norway, and Sweden, has provided invaluable insights and potential solutions for addressing the challenges faced by Pakistan. By drawing parallels and learning from the successful strategies employed in Scandinavia, Pakistan, including South Asian nations, can work towards building more inclusive, sustainable, and comprehensive social protection systems. Furthermore, the implementation of innovative financing mechanisms, the adoption of technology-driven solutions, public-private partnerships in the social policy formulation process, and collaboration with civil society organizations inspired by the Scandinavian experience can aid Pakistan and South Asian countries in overcoming funding constraints, administrative complexities, targeting challenges, and exclusive society. By embracing these opportunities and leveraging proven strategies, Pakistan can pave the way for enhanced social protection that addresses the diverse needs of the population and fosters resilience.

In essence, the successes and lessons learned from Scandinavian countries provide a roadmap for Pakistan to strengthen its social protection systems, contributing to the well-being and social security of its population. National and regional policymakers, government and non-governmental organisations, and stakeholders in the region must consider and adapt these strategies to enhance the effectiveness and efficiency of social protection, ultimately contributing to the overall development and prosperity of Pakistan and the South Asian region.

References
Eurostat. (2021). At-risk-of-poverty rate by poverty threshold, age, and sex – EU-SILC survey. Eurostat. Retrieved from https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Living_conditions_in_Europe

OECD (2024), Employment rate by age group (indicator). doi: 10.1787/084f32c7-en

UNESCO Institute for Statistics. (2021). Literacy rates continue to rise from one generation to the next. Retrieved from https://uis.unesco.org/sites/default/files/documents/fs45-literacy-rates-continue-rise-generation-to-next-en-2017.pdf

World Bank. (2021). Life expectancy at birth, total (years) – Sweden. Retrieved from https://data.worldbank.org/indicator/sp.dyn.le00.in?name_desc=false