Social Security Letdown

When the government announced its social security programs some four years ago, we welcomed the move in the hope that the scheme, which includes features like health insurance and unemployment benefit, would address some major problems facing industrial laborers. Believing that individual contributions to the state-led program were important for its sustainability, we also backed the government’s decision to slap a one-percent social security tax on basic salaries for all those working in the government and formal sectors, with effect from the beginning of fiscal year 2009/10. But after almost three years of collecting the money, the government shows no sign of implementing the scheme. We take this inaction as a betrayal of the working class.



The government, in its budget speech, promised to roll out at least three social security schemes, covering health, workplace accidents and maternity benefits, within this fiscal year. But nine months into the fiscal year, the government has not shown any convincing sign of turning its words into action. Yet it continues to deduct one percent from the basic pay of every worker in the formal sector. This is unjust.



Officials cite two major reasons for the delay. First is the lack of an executive director at the Social Security Fund, which was created to introduce the social security schemes. And second is delay in the enforcement of social security law. But these issues are not at all difficult to tackle. For appointing an executive director, the government can issue a public notice asking interested individuals to file their candidacy for the post. Since the Fund has already prepared the parameters for the appointment of the executive director, the entire process of placing a person at the helm of the Fund can be wrapped up within a month.



But this has not happened as the Ministry of Labor and Transport Management, the parent authority of the Fund, first wants the draft of the Social Security Act endorsed by parliament. This stance taken by the ministry has thrown the issue of appointing the executive director onto the back-burner, leaving the Fund without an individual capable of assuming authority and pushing matters forward.



The ministry’s wish to first get the Act endorsed can be fulfilled if it makes a little effort as the Fund has already forwarded the draft law to the ministry. It was forwarded almost two months ago. It’s now time for the ministry to give priority to domestic labor issues and not get totally mired in the problems of foreign employment, serious though those are. It should also understand that proper implementation of the social security scheme is crucial for making the labor market flexible enough to lure domestic and foreign investment.

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