Scant guarantees

Changes have been made to social protection that involve privatizing the health and pension systems and breaking up social benefits programmes into a series of separate initiatives focused on specific population groups. Access to social security increasingly depends on the ability to pay, which goes against its whole legal basis and violates the principle of citizen equality.

In 1990 Colombia adopted anew economic model in which free market flows were seen as the engine that woulddrive development, and on this basis a series of structural changes were made tothe country’s regulations and institutions.

The social protection system now operates in line with this philosophy. Itconsists of two main components: the integrated social security system (health,pensions, work risk insurance), and the social assistance system (benefits andsupport in food or in money). The laws governing both systems allow privateagents to operate in the spheres of health and pension administration. Alongsidethis, a subsidized public health care scheme has been created.


Access tosocial security is conditioned by the market

Private pension funds based on the principle of individual accounts have beenset up, but the previous system, based on defined benefits and the publicadministration of resources, has been retained. In the health care sector, theinsurance system was changed to allow private sector participation, while thestate discontinued financing for the hospital system (i.e. subsidizing thesupply of service) and instead grants subsidies to the poor to pay for healthcare. Hospitals and other health providers now have to finance themselves bycharging for services.

Over the years, legislative changes to promote a freemarket system have tended to restrict rather than to widen access to healthcare. In 2001, a constitutional reform was made to the system of transfers,[1]and this gave rise to the current general system of competition in participationand distribution. The main changes in the social protection system have been:the conception, management and institutional organization of social policy; theadjustment of the labour market to the new trends, with the aim of reducing thecountry’s pension liabilities; a reprise of a social assistance system; andthe creation of the Social Protection System (SPS).

This new conception of social policy is based on the latest proposals from theWorld Bank about the theory of social risk management. The argument is that theSPS can assist individuals and communities to adequately manage social risk andcoordinate economic development and protection for the most vulnerable sectorsof society and for those living in extreme poverty (Rodríguez, 2006).

In January 2007 the government promulgated Law 1122, which does not alter theprivileged position of private service providers. The changes that have beenintroduced still shift responsibility to contributors and regional bodies, whichnow have to allocate greater resources to try to extend the coverage of thebenefits regime because the national government’s proportion is reduced.Besides this, people between 19 and 24 years old who are single, unemployed andnot students are excluded from the regime, as are population sectors in level 3of the System for the Selection of Beneficiaries of Social Subsidies (SISBEN).[2]

To make matters worse, Congress has definitively separated the generalcontributions system from current state revenues, which means cutbacks forregional bodies that amount to COP 52 billion (USD 27 million) over the next 11years in the areas of education, health, basic sanitation, nutrition programmesand care for the elderly.


Fragmentation of social assistance

President Álvaro Uribe’s first government failed to reach the socialsecurity and protection goals set in its development plan for 2002-2006 entitled“Towards a Community State”. This impeded moves to assist and resettle thepopulation groups that have been displaced by the armed conflict, to establish asystem of minimum charges for health services and to achieve universal healthcare coverage. At present, in the government’s second term, it aims tocomplete the task, and this includes bringing seven million Colombians into thesubsidized health regime and incorporating 300 hospitals into the Modernizationand Restructuring Programme.

One of the mechanisms for this is the Network of Social Protection AgainstExtreme Poverty. In 2006 the Uribe government proclaimed that in its second termit would extend coverage to 1.5 million families (some 7.4 million people) inextreme poverty through public assistance programmes (CONPES, 2006). The newsocial management model incorporates monitoring by social management bodies(including the army, local authorities, church groups and NGOs) that will berequired to collect and systematize information about the beneficiaries, draw upa ‘Life Plan’ for each and every family, and monitor progress to ensure thatthe state honours its obligations in this area.


Economic growth without job creation

In its first development plan, the Uribe government set the goal of creating 2.2million new jobs in four years. This target was based on the belief thateconomic recovery and labour legislation reform would have a positive impact onemployment. The aims of the reform were to “establish regulations to promotejob creation and widen social protection.” But what actually happened was thatthe extra 35% paid for night work between 6.00 pm and 10.00 pm was abolished,pay for work on Sundays and bank holidays was cut by 25%, and the rates ofindemnity for dismissal without just cause were halved.

This reform was promulgated when the country was barely beginning to recoverfrom the worst economic recession in its history, during which the economicgrowth rate fell by more than four percentage points and unemployment soared toaround 20%. It was implemented at a time of extraordinary global economic growthand unprecedented rises in the prices of Colombia’s main export products.

Also, massive emigration during this period increased the flow of remittances, underwenta fivefold increase between 1996 and 2005, and since 2004 have been thecountry’s third biggest source of foreign currency, after oil and coal exports(Khoudour-Cásteras , 2006).

These indicators go a long way towards explaining why more jobs were created andwhy the GDP growth rate has risen. This is evident in Table 1, where it can beseen that in the first four years the employment rate increased and unemploymentfell.

TABLE 1. Labour market indicators

Source:Compiled by the author based on DANE quarterly labour market data. See:<www.dane.gov.co>.

However, four years after this reform was first implemented and with theeconomic growth rate at around 7%, not only has employment fallen a long wayshort of the targets in the development plan, it has not even risen to thelevels that prevailed before the 1999 crisis.[3]

Lack of decent work and social protection

Precarious employment. Employmenthas become more precarious in recent years in terms of duration, income, andrespect for rights. However, the proportion of workers who are members ofunemployment insurance funds (21%) and family benefit funds (27.5%) isindicative of a certain level of labour stability.

Limited access to social security. Althoughhealth, work risk and pension coverage is guaranteed to all workers bylaw, only 40.7% of people who work belong to the health regime, only 32% arecovered against work risks, and only 26% are in pension schemes. All otherworkers have no social protection, and they have to prove they are poor toqualify for SISBEN health coverage, or pay for social security on their ownaccount.

Lack of trade union freedom and social dialogue. In Colombia, tradeunions are subject to systematic violence (in the last 20 years more than 2,500union representatives and members have been murdered); government and businesselites have an anti-union culture (President Uribe regards labour rights as“privileges”); trade unions have to rely on clandestine funding; and thelabour code is obsolete, it does not include international ILO conventions andit only applies to workers with employment contracts.

All these factors explain why less than 5% of working people belong to a union,less than 400 collective labour agreements are established each year (while theCompany Superintendent’s office reports financial information on more than3,000 enterprises per year), and less than 1% of the working population has thebenefit of collective agreements.

A weak state, a business culture ofillegality. A great many business owners do not comply with their legalobligations, and the state fails to fulfil its responsibility to carry outinspections. Colombia ratified ILO Conventions 81 (in 1947) and 129 (in 1969)relating to labour inspections, but it excluded inspections in the area oftrade, which is one of the sectors where the enforcement of workers’ rights ismost problematic. What is more, as the Ministry of Social Protection itself hasreported,[4]there are far too few labour inspectors to cope with the widespread problems ofillegal work and evasion, and this is a clear violation of what is laid down inConvention 81.

 Table 2 shows the situationregarding labour rights at the national level.

TABLE 2. Labour indicators

Calculatedto December of each year. Sources: 1: DANE, quarterly labour market reports. 2:Superintendent of Finance. Statistics on administrated funds(<www.superfinanciera.gov.co>). 3: ASOCAJAS (<www.asocajas.org.co>). 4, 5,6, 7, 9, 10: Ministry of Social Protection, Reports to the Congress of theRepublic (<www.minproteccionsocial.gov.co>). 8: National Trade Union School (ENS),Trade Union Census (<www.ens.org.co>).


Conclusion

In recent years there has been an improvement in some indicators, inparticular as regards access to social security. Trade union action and censureof the Colombian government by international bodies has pressured it to adopt atougher stance with respect to employers’ obligations, which includeregistering their employees for social security and family benefit funds, andpaying the due contributions.

Fourteen years after the law to reform the social security system and promoteuniversal protection came into force (Law 100 of 1993), barely 62% of thepopulation has health coverage. The pension situation today is no better than itwas in 1993, with a coverage rate of only 28%. The number of people insuredagainst work risks has not increased because the informal sector is stillexcluded. However, the system as it stands today has made some ‘progress’,such as the introduction of the subsidized regime registration card, which givesthe vulnerable population a feeling of belonging, and any attempt to interferewith membership is firmly rejected by the people affected.


References

CONPES(Consejo Nacional de Política Económica y Social) (2006). Documento Social No.102.

ILO(International Labour Organization). “Decent work for all”. Available from:<www.ilo.org/global/About_the_ILO/Mainpillars/WhatisDecentWork/lang--en/index.htm>.

Khoudour-Cásteras,D. (2006). “Las remesas: ¿beneficio o costo para Colombia?” in Observer,Observatorio para la equidad y la integración social en Medellín y AntioquiaNo. 16. Medellín: Comfama, December.

PROFAMILIA (2005). Salud sexual yreproductiva en Colombia. Encuesta Nacional de Demografía y Salud. Bogotá:PROFAMILIA.

Rodríguez, O. (2006). “Protección social y ciudadanía: visión alternativade las políticas sociales”. Periódico UN, No. 100, December.


Notes:

[1]On average, transfers amount to 67% of departmental budgets and 46% of districtand municipal budgets (except Bogotá) and constitute the main source of fundingfor social expenditure; 53% goes on education, 23.5% on health, 10% on basicsanitation services and the remaining 13.5% on nutrition, senior citizens’ andemployment promotion programmes. Since 2002, these transfers have been fallingas a percentage of GDP.
[2]Level 3 of the SISBEN includes people withfamily income that corresponds to three basic food baskets, which is equivalentto one minimum salary per month per family. According to the national averageestablished in a PROFAMILIA survey, the average family consists of 4.1 persons.
[3]In 2006, GDP increased by 6.8%, employment fell by 4 points, unemployment wentup by more than a point, and underemployment by 4.5 points.
[4]As the National Trade Union School directly verified (30 September 2004), thefailure of many employers to comply with labour standards has reached such apoint that just one office (the Antioquia Regional Labour Office) received69,000 individual complaints in one year, of which 45,000 were verbal, 24,000written, and another 700 were collective complaints submitted by trade unionorganizations.