KIGALI, 25 January 2021 – Rwandan President Paul Kagame on Monday welcomed the proposal to create a global social protection fund.
Resources for the fund will be contributed by rich countries, a hike in the taxation of rich firms.
It will, among others, widen the fiscal space poor countries have been starved of by the multidimensional crisis brought about by the new coronavirus.
Financing provided through the fund would help countries put in place pro-poor programs.
Rich countries and international organizations could also decide to support poor countries by granting debt relief or debt cancellation.
The fund will help bridge an $80 billion financing gap that poor countries currently face as they seek to improve their social protection programs.
The Brussels-based International Trade Union Confederation says the fund would offer basic income to workers affected by emergencies including in the form of cash transfers to the poor.
Additional programs it could fund include providing pension payments for the elderly, disability benefits and unemployment benefits.
It could also provide child benefits and access to the health, education and housing services, according to list of priorities under discussion by countries and the Secretary-General of the International Trade Union Confederation, Sharan Burrow.
“This is a bold idea that merits serious consideration by policymakers,” Kagame said Monday during his participation at the virtual session of this year’s Davos Summit.
Many African leaders have spoken up in favor of the fund as well.
Economists, rights activists, social protection and development experts are pushing the idea of the fund, pointing out that only a fraction of the trillions of dollars being spent to mitigate the impact of the new coronavirus would suffice to launch the fund.
It also set up a $100 million fund to help businesses that have been hit hard by the impact of the pandemic to stay afloat through access to affordable financing.
According to the World Economic Forum, COVID-19 has put the livelihoods of 3.3 billion of the world’s workers, notably African workers who scratch a living from agriculture or from the informal sector without rights and social protections.
The proposal will be tabled later this year before the summit of heads of state of the world’s 20 richest countries (G20).