Social Protection Challenges: From Monopoly to Equality
Author: Naeem Akram Abbasi (Research Associate)
Literature on poverty consistently support the argument that marginalization and social exclusion are amongst the core drivers of poverty and can greatly exacerbate the problem. In such circumstances, social protection policies can grant with significant relief regarding mitigation and resistance of this phenomenon and help pushing the marginalized segment towards inclusion and protection zone at the policy fronts. Additionally, through targeted policy interventions, social protection programs can help reduce poverty and create a more equitable society.
Monopolization of profits and socialization of losses is a significant threat to social protection norms. Social protection refers to policies and programs that aim to reduce poverty and vulnerability, provide basic needs, and ensure social justice. The monopolization of profits and socialization of losses undermines these goals and exacerbates inequality and poverty.
Firstly, the monopolization of profits leads to a concentration of wealth in the hands of few individuals or corporations, reducing the amount of revenue available for social protection programs. Wealthy individuals and corporations often use their influence to lobby against progressive tax policies, which could generate more revenue for social protection. As a result, low-income and vulnerable communities are left with inadequate resources to meet their basic needs.
Secondly, the socialization of losses creates a burden on the government and taxpayers to address negative consequences caused by corporations and wealthy individuals. Government bailouts for corporations in times of economic crisis, for example, drain resources that could be used for social protection programs. This also creates a moral hazard, whereby corporations feel they can engage in risky behavior without fear of consequences, knowing that the government will bail them out if things go wrong.
Furthermore, the socialization of losses often disproportionately affects marginalized communities, such as low-income households and minority groups. For example, when environmental degradation caused by corporations leads to health risks, these risks often fall on marginalized communities. They are also more likely to suffer the consequences of economic downturns, as they have fewer resources to fall back on.
Although Pakistan moved with social protection programs like Provincial Employees Social Security Scheme (PESSS) in 1967, Public Sector Benevolent Funds and Group Insurance (1969), Workers Welfare Fund (WWF, 1971), Employees Old Age Benefits Institutions (EOBI), Zakat &Usher Scheme (1980), BISP (2008), Ehsaas (2019) at the governmental level. However, these programs mainly focus on government employees, leaving out the general public in sectors like health and education.
Socialization of losses and monopolization of profits is great challenge and it is exploiting the social protection norms. The corporate sectors and other private organizations transfer the losses directly or indirectly to the poor segment of society and share the profits by monopolizing among themselves. This phenomenon This exacerbates poverty, uncertainty, volatility, risk, and labor market inefficiencies.
Covid-19 pandemic reinitiated the debate of social protection intensively among the policymakers, researcher and social scientists and alarmed the government to adopt the formal measures by taking the matter into deep considerations and proper legislation to devise and implement comprehensive social protection programs that cover all individuals rather than just government employees. In addition to this, it would also be influential to address, identify, monitor, regulate and control the players involved in monopolizing the profits and socializing the losses through government intervention via proper enforceable mechanism.
In conclusion, the monopolization of profits and socialization of losses are major threats to social protection norms. They exacerbate poverty and inequality, reduce the resources available for social protection programs, and disproportionately affect marginalized communities. It is crucial that policymakers address these issues and implement policies that ensure that corporations and wealthy individuals are held accountable for their actions and contribute to social protection programs.