VOLUME 18: SUCCESSFUL SOCIAL PROTECTION FLOOR EXPERIENCES

Chapter 2:The Dignity Pension (Renta Dignidad): A Universal Old-age Pension Scheme -Bolivia

Country details


INTRODUCTION

In the past two years, the Plurinational State of Bolivia has reduced the indicators of moderate and extreme poverty by 2 and 6 percentage points, respectively. At the beginning of this period, 60 per cent of Bolivians lived in poverty and 38 per cent were living in extreme poverty. The reality faced by other Latin American countries as well as by Caribbean and African countries is not much different.

SUMMARY

• Launched in 2008 as a universal benefit for all people 60 years of age and older;

• Universal non-contributory pension;

• Identification documents are needed to register for the scheme; biometric registry is being developed;

• Benefit can be paid monthly or accumulated over up to 12 months. Amount equivalent to about $340 per year; 75 per cent of this annual benefit amount for those already receiving a pension from the Social Security System;

• 800,000 beneficiaries (2010);

• $500 million paid;

• Financed by a fixed share of the special direct tax on hydrocarbons (impuesto directo a los hidrocarburos (IDH) – oil and gas revenue), with contributions from all levels of government, and dividends from capitalized public enterprises (association with the multi- national enterprises, which are now undergoing nationalization);

• Impact: a 5.8 per cent reduction in extreme poverty between 2007 and 2009 (especially in rural areas).

Faced with this reality for decades, various schools of economics and social sciences have discussed and studied the relevance and effectiveness, in terms of economic and social development, of granting subsidies or direct transfers to vulnerable groups. Beyond this discussion, however, the international community must also be made aware of the concrete results from the implementation of social protection measures. These measures, which resulted in the acceleration of poverty reduction, match the policy objectives of the Social Protection Floor Initiative proposed by the United Nations and, ultimately, dignify the elderly in the Plurinational State of Bolivia.

For the Plurinational State of Bolivia, now being able to guarantee a social protection floor for the elderly has been one of the most important and far-reaching social accomplishments in the country’s history. Along with other social measures, it has also had a clear impact on poverty reduction and the quality of life of the country’s citizens. In this way, the Dignity Pension (Renta Dignidad), a benefit established within the Bolivian non-contributory Social Security Scheme, has improved the beneficiaries’ living conditions.


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