Has East Asia realised the liberal alchemists’ dream: decent welfare at little or no cost to the public purse? As Asia recovers from the 1997 crises, is the core principle of regional social policy – that economic growth obviates the need for a coherent social protection system – still valid? Can the tiger economies learn from European welfare regimes and social policy experience?
A University of Bath Department of Social and Policy Science report examines the distinctive political economy of welfare regimes in four southeast Asian countries - Malaysia, Thailand, the Philippines and Indonesia – and one northeast Asian country - Korea.
There is low public responsibility (in terms of expenditure, provision and regulation), extensive family provision, growing private markets and community-based organizations. States spend little on social benefits. As private health spending accounts for half the total, public health expenditure is low, ranging from 0.7 percent of GDP in Indonesia to 2.3 percent in Korea. Malaysia has a UK-style National Health Service and Korea is now developing National Health Insurance. Social security expenditure is also low, ranging from 0.7 percent GDP in Thailand to 2 percent in Korea. Apart from the Philippines, national pension schemes are in their infancy. Only Korea has an unemployment insurance scheme.
The study also reports that:
- Apart from in Korea, organised labour has played no role in pressuring for development of the welfare state.
- The goal of moving east Asian health systems from (mainly) private finance + mixed provision, towards (mainly) public finance + mixed provision is complicated by multi-nationals buying up indigenous health care providers.
- As corporation-based welfare has weakened in Korea as a result of globalisation, one unintended consequence has been the development of the welfare net into a western-style system with unemployment benefits.
- Throughout the region generous special programmes for state employees (civil servants, the military, police and teachers) have been hard to rescind.
- Formal safety nets, public programmes targeted at the poor to raise living standards (involving cash, public works employment and food and housing subsidies) have expanded, especially in Korea, since the 1997 crisis.
- Despite economic development and urbanisation, the extended family remains a provider, saver and redistributor.
What social policy lessons do European welfare regimes have to offer east Asia? The study cautions against universal policy designs and instead proposes context-specific schemes mindful of the local socio-political environment and inherited institutions. East Asian policy makers are urged to:
- extend universal provision to secondary education and curative health
- adopt a universal first-tier pension scheme.
Source(s):
‘Welfare regimes in East Asia and Europe: comparisons and lessons’ by Ian
Gough, Social Policy in Developing Context Working Paper, Department of Social
and Policy Sciences, University of Bath, June 2000
Funded by:
UK Department for International Development
id21 Research Highlight: 31 May 2001
Further Information:
Ian Gough
Department of Social and Policy Sciences
University of Bath
Claverton Down
Bath BA2 7AY
UK
Tel:
+44 (0)1225 826245
Fax:
+44 (0)1225 826381
Contact the contributor: i.r.gough@bath.ac.uk
Department of Social and Policy Sciences, University of Bath, UK
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