In their seminal report, “Rethinking Social Protection in South Asia: Toward Progressive Universalism,” the World Bank delves into the intricate dynamics of social protection across the region, offering a blueprint for a more inclusive and resilient future. This report is particularly relevant to the Maldives, grappling with significant social and economic disparities despite notable economic growth. The Maldives, renowned globally for its stunning beaches and luxurious resorts, harbours a complex reality beneath its idyllic surface. This article explores the multifaceted world of social protection in the Maldives, uncovering its successes, challenges, and the road ahead.
A Dual Reality of Growth and Inequality
The Maldives has witnessed notable economic growth over the past two decades, propelling it into the ranks of middle-income countries. This growth, fueled by a booming tourism industry, has lifted many out of extreme poverty. However, this progress masks a dual reality: while Malé, the capital city, enjoys prosperity and development, the atolls remain ensnared in a cycle of poverty and vulnerability.
The disparity is stark. In 2019, approximately 93 percent of the poor resided in the atolls, with poverty rates averaging around 19.2 percent, compared to a mere 8.8 percent in Malé. South Huvadhu Atoll, one of the hardest-hit regions, reported a poverty rate of 24 percent. These figures underscore the pressing need for targeted social protection measures that address the unique challenges faced by the atoll communities.
The Climate Crisis: An Ever-Present Threat
The Maldives’ geographical vulnerability to climate change adds another layer of complexity. Rising sea levels, increased frequency of natural disasters, and the threat of coral reef degradation pose existential risks to the nation’s economy and its people. In 2019 alone, the Maldives faced significant economic losses due to extreme weather conditions linked to climate change. This vulnerability necessitates a robust and adaptive social protection system capable of cushioning the impacts of such environmental shocks.
Social Protection: Coverage and Gaps
Social protection in the Maldives, though relatively strong, reveals notable gaps in coverage and effectiveness. The Maldives Retirement Pension Scheme (MRPS) and the Old Age Basic Pension (OABP) play crucial roles in providing income security to the elderly. However, social assistance programs need to expand their reach and adequacy to cater to the broader population, especially those in the atolls.
Social pensions constitute a significant portion of the Maldives’ social assistance expenditure. In fact, they account for 88.6 percent of the total social assistance spending. While this highlights a commendable focus on the elderly, it also indicates an imbalance in addressing the needs of other vulnerable groups, such as children and the working-age population.
The Employment Conundrum
The labour market in the Maldives presents a paradox. Despite economic growth, the quality and quantity of jobs remain inadequate. Between 2000 and 2020, the Maldives added only a fraction of the jobs needed to keep pace with the growing working-age population.
Women and youth face particular challenges in the labour market. Women are often relegated to unpaid labour or low-paying jobs, and youth unemployment rates are alarmingly high. The lack of opportunities for skill development and vocational training exacerbates these issues, trapping many in a cycle of poverty and vulnerability.
Toward Progressive Universalism
The concept of progressive universalism offers a promising pathway for the Maldives. This approach advocates for a social protection system that is both inclusive and fiscally sustainable, prioritizing the most vulnerable while progressively expanding coverage to all citizens. The Maldives’ journey toward progressive universalism must be anchored on four key pillars: promoting equity, building resilience, increasing opportunities, and strengthening social protection systems and financing.
Promoting Equity:
Equity must be at the heart of social protection reforms. This entails prioritizing support for the most vulnerable groups—women, children, and those in the atolls—ensuring they receive adequate assistance to break free from the shackles of poverty. Programs like conditional cash transfers and targeted subsidies can play a pivotal role in this regard.
Building Resilience:
Building resilience against shocks, both economic and environmental, is crucial. The social protection system must be robust and adaptive, capable of responding swiftly to disasters and economic downturns. Integrating climate resilience into social protection programs can help cushion the impacts of natural disasters, providing a safety net for affected communities.
Increasing Opportunities:
Creating quality jobs and improving access to education and vocational training are essential for enhancing economic mobility. Policies that promote job creation in high-productivity sectors and provide training opportunities for the youth and women can bridge the employment gap, fostering a more inclusive labor market.
Strengthening Systems and Financing:
A strong, efficient social protection system requires adequate financing and effective administration. Streamlining the coordination among various social protection programs and enhancing the capacity of administrative systems can ensure better delivery of services. Moreover, exploring innovative financing mechanisms, such as public-private partnerships, can bolster the financial sustainability of social protection initiatives.
A Vision for the Future
The Maldives stands at a crossroads. The path toward progressive universalism is fraught with challenges, yet it holds the promise of a more equitable and resilient society. By embracing a holistic approach to social protection, the Maldives can safeguard its most vulnerable citizens, mitigate the impacts of climate change, and unlock the full potential of its young, dynamic population.
The nation must look beyond the horizon, envisioning a future where no one is left behind. The journey toward progressive universalism is not merely a policy choice; it is a moral imperative. It is a call to action to rethink, reform, and rebuild the social contract, ensuring a brighter, more inclusive future for all Maldivians.
