ASSA rejects WB proposal program
JIMBARAN, Bali (JP): The ASEAN Social Security Association (ASSA) has turned down a Word Bank (WB) proposal to allow private fund managers to handle workers' pension funds and other social security programs.
Delegations from ASEAN member countries's financial institutions running social security programs for their workers, who are here for a three-day annual meeting, warned on Tuesday that the proposal to privatize the compulsory social security program, including pension funds, violated human rights and furthermore was too risky because of the absence of a financial and legal guarantee that all funds collected from workers and their employers would be well managed.
Awaloedin Djamin, chairman of the Association of Social Security Programs in Indonesia (AJSI), suggested that western country-backed financial institutions such as the World Bank and International Monetary Fund (IMF) avoid intervention into ASEAN countries' internal affairs.
"The proposal won't be able to work. With the proposal, the donor countries of international financial institutions will eye huge amounts of money collected under the program in ASEAN countries.
"Government-run social security firms in the region should remain free to invest their funds and we won't let the World Bank and the IMF meddle with our internal affairs," he said at the meeting's opening ceremony.
Awaloedin said the social security program was based on International Labor Organization (ILO) conventions and universal human rights and was aimed at providing basic protection for workers, civil servants, servicemen and public transportation passengers.
"Besides the universal human rights ILO convention, ASEAN member countries' constitutions also stipulate an obligation to provide their people social protection," he said.
He said it would impossible to obtain a guarantee from private fund managers in case of possible mismanagement or bankruptcy.
Tan Sri Sallehuddin bin Mohammed, chief of Malaysia's Employees' Provident Funds (EPF), criticized the Bank's proposal, saying his country was no longer confident in developed country- dominated international financial institutions.
He questioned the Bank's interests behind the proposal and said Malaysia would not invest its workers' funds in the international market.
"Our government, which has run the social security program for workers since 1952, is confident of its own system," he said. Malaysia has established the EPF and the Social Security Organization (SOCSO), two government agencies running the social security program for more than eight million employees, including migrant workers.
Leopoldo S. Veroy, vice president of the Philippines' Social Security System, agreed and said his country would lobby other ASEAN member countries present at the meeting to issue a joint communique to improve the maximum benefits workers could gain from domestic social security programs.
"Our common but fundamental mission is to provide maximum benefit to the social security program's participants and not how to invest the funds we have collected from workers," he said.
He said despite their professionalism, private funds managers could not guarantee that the funds they collected from workers would be managed well.
He said delegations from Singapore, Thailand and Vietnam, the most recent ASEAN member country to join ASSA, had also expressed their objections to the proposal.
Hector Inductivo, director of the International Social Security Association (ISSA) Asia-Pacific Region, said ISSA would pay no attention to the Bank's proposal and would instead help create better labor conditions in the region following the economic crisis.
He said labor conditions and the social security program in Indonesia could not progress significantly because of the prolonged economic crisis. But he expressed optimism that Indonesia would equal Thailand, Malaysia, South Korea and other recovering countries, thanks to its economic performance over the past year and its democratic government. (rms)