Ecam sceptical of informal economy social protection

The Employers Consultative Association of Malawi (Ecam) says Malawi’s informal economy is huge hence making it difficult for the country to develop a social protection plan for players in the sector.

Speaking on the sidelines of an International Social Protection workshop in Lilongwe last week, Ecam executive director Beyani Todd Munthali said the size of Malawi’s informal sector presents the country with tough challenges as a developing country in addressing social protection.

Said Munthali: ” The issue of social protection can be addressed through the Malawi Decent Work Country Programme priority three which provides that the capacity of social partners must be developed.

“We must firstly understand the implications on business such as costs as well as the benefits thereto of social protection measures because in this day and age, the private sector is the most critical to a country’s economic growth and the country’s private sector has faced some economic shocks in recent times.”

Munthali said for a country to have a sustainable social protection basket many businesses will either be a direct or indirect major source of funding for the resources to reach to many individuals which is not an easy thing.

He said despite intensive efforts to promote social protection the ratification rate among countries is low even with the intervention of the International Labour Organisation (ILO) which adopted 31 Conventions and 23 Recommendations on social security issues Since it was founded.

“The issue of social protection continues to be debated amongst social partners at national and international level. Perhaps strategies should be developed with a view to understanding why such a slow ratification rate.

The concepts and means of delivery for social protection schemes have changed over time and are used differently in different cultures and they have brought some success,” said Munthali.

He disclosed that as a member of the International Organisation of Employers, Ecam backed the adoption of the ILO recommendation 202 and supported resolutions at the 100th ILO Conference recently.

Added Munthali, ” We cannot shy away from the fact that social protection provides a safety net during times of economic crises. Since 2011 Malawi’s business climate deteriorated and in 2012 due to monetary and fiscal measures like the devaluation and floatation of the Kwacha and life became extremely expensive and no employer nor employee were spared.

“Social protection measures can provide a stabilising mechanism in times of crisis and can help address, integration, diversity and migration challenges.”

One of the organisers of the summit, Daniel Kumitz, who works for Friedrich-Ebert Stiftung (FES) in Zambia, said education and social security for the poor are indispensable if democracy is to flourish.

“Hungry people have other priorities than to engage in democracy and civil society. Those who struggle for livelihood everyday are not empowered to have a say and speak out in political matters that concern them.’

Some form of social protection include social transfers, social security and social assistance.

Benefits can be delivered in cash or in kind and can be conditional on participation in prescribed public programmes.

The Malawi government has put in place social cash transfers to aid those living in rural areas.