‘Universal pension scheme is possible’
On October 1 this year, the Malawi Government together with Malawi Network of Older Persons Organisations (Manepo) jointly launched the report of a study into the feasibility of a universal old age pension in Malawi. The aim of the study is to address the knowledge gap of social pension schemes in Malawi to assist older men and women, most of whom are not covered by formal pension schemes. In this interview, EPHRAIM NYONDO caught up with ANDREW KAVALA, Manepo national coordinator, to find out how feasible it is for a poor country like Malawi to implement a universal pension scheme. Excerpts:
Q
: Can you shed more light on the key findings of the study?
A
: The report found out that despite the strong economic growth in recent years, Malawi continues to face substantial challenges of pervasive poverty and rising inequality. Hence, minimum social protection floors are increasingly recognised as a necessary and effective approach to ensure the benefits of development are shared fairly, and no one is left behind. Furthermore, the report notes that addressing what happens to Malawians as they grow older is critical to successfully addressing the wider development challenges facing the nation. The 0.7 million older men and women aged 60 and over today have spent their lives contributing to the development of the nation, and most continue to be active in their communities and wider society, as breadwinners, caregivers, and leaders in community, family and political life.
The report further shows that in countries that have successfully made progress towards a social protection floor, pensions are the biggest single component of the system. Therefore, there is a growing recognition—in Malawi and across the globe—of the role of social protection floors for providing a sustainable, predictable, regular and long-term contribution to reducing poverty and inequality.
Q
: Is it not going to be a duplication of systems since the country is already implementing social cash transfer programmes and older persons are part of the beneficiaries?
A
: No. It is absolutely not a duplication. First of all, Manepo highly commends government and the development partners for the social cash transfer programme being implemented across the country. I have read the impact evaluation report and it is quite exciting to learn how the programme is providing income security to ultra-poor and labour constrained households.
However, the current cash transfer programme is a targeted scheme and I personally consider targeting as a nightmare in a country like Malawi where poverty is so widespread. Besides, older men and women are not the main target for the programme. They happen to be part of beneficiaries by default and not by design. More so, older men and women are not covered by the programme. The analysis of the Intergrated Household Survey (IHS3) shows that only three percent of older people are the direct recipients of this support, which means, at the very least, more than three quarters of older persons miss out. The inherent challenges of poverty targeting approach mean that the scheme fails some of the poorest, with high inclusion and exclusion errors. We are looking for a programme that provides a regular, predictable, sustainable social security to older men and women to cushion their deep-rooted poverty.
Q
: How can a country that is failing to provide essential services to its poor people afford a pension scheme?
A
: Affordable options exist for the country to introduce a universal pension. Given the challenging fiscal context, a pragmatic approach would be to begin by introducing a more limited scheme of, say, K3 700 for older people over 70 years. This benefit level is in line with averages for other social pensions across the region. A scheme of this nature would cost about 0.4 percent of GDP, and provide a benefit of 20 percent of average income. Despite the economic challenges facing Malawi in the short term, with political will, a pension of this nature can be financed through ongoing efforts to increase national revenue through taxes. This means it would be easy to accommodate this within the national budget. This scheme would support older people to live their later years in dignity.
Q
: Any evidence about this in the region?
A
: Absolutely, evidence from land locked and poor countries like Swaziland and Lesotho shows how, with income in their pockets, older people are better placed to take charge of their lives, and participate in family and community decisions. A universal pension piloted just across the Malawian border in the Katete district in Zambia was found to reduce accusations of witchcraft, with older people seen as an asset by the community, rather than a burden.
Q
: Any last word?
A
: Yes. I would like to appeal to all Malawians to look at a pension scheme for older persons not as a cost but as an investment towards human development with the increased numbers of orphans under the custody of their grandparents. The Universal Declaration on Human Rights, of which Malawi is one of signatories, states that: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” Our own constitution also makes provision for an appropriate social security scheme for older men and women. Hence, it’s high time we began to do what is good for older persons in order to raise their dignity in life. n
