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Cuddly Tigers to Skinny Cats: Response to The Economist on Asia's Welfare States

9 Oct 2012

UNRISD Research Coordinator Ilcheong Yi responded to an article on Asia's Next Revolution in the 8-14 September issue of The Economist. The letter, which was published in the 22-28 September issue, challenges the article's recommendations.

From the cradle to the grave?

SIR – Although I agree that Asia’s emerging welfare states have much to learn from the mistakes of their Western counterparts, I fear your three broad recommendations could turn these "cuddly tigers" into skinny cats ("Asia’s next revolution", September 8th). First, simply raising retirement ages will not end the exclusion of older workers from the jobs market, because exclusion comes about mostly through increased labour-market flexibility and fewer protections for workers. This is one of the big causes of old-age poverty.

Second, you are right to highlight that handouts to the old must not be provided at the expense of investment in the young. But setting aside the point that most "handouts" are quite modest, they often also carry indirect benefits. The introduction of social pensions in South Africa, for example, increased nutrition and education levels among the grandchildren of the pensioners. They also stimulated local markets, reduced inequality and improved social cohesion.

Third, innovation in social policy should be welcomed. But increasing worker flexibility by reducing or removing severance pay hardly qualifies as innovative. It is one of the biggest causes of the rise of irregular work in the formal and informal economies. That is something that Asia’s emerging welfare states should definitely learn from the West.

Ilcheong Yi
Research Coordinator
United Nations Research Institute for Social Development


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