At the beginning of the 21st century, half of the world lives below the two-dollar-a-day poverty line, and approximately 1.3 billion people live in poverty with under US$1 (Purchasing Power Parity PPP) a day. Adequate social protection transfer mechanisms are an essential means of relieving poverty. However, the International Labour Organization (ILO) has estimated that only 20 per cent of the world's population benefits from adequate social protection coverage. In sub-Saharan Africa less than 10 per cent of the labour force has coverage for old-age income protection. Although the international community has adopted standards which lay down the right to social security for all, such as Article 22 of the Universal Declaration of Human Rights, which states that "Everyone, as a member of society, has the right to social security" and Article 25, which formulates this in a more precise way as "the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control", there is still a long way to go before this becomes a reality. One major reason given to justify why this has not become a reality for all citizens is that it has often been held that social protection was unaffordable for low-income countries; yet this judgment does not hold. Examples from a number of countries show that basic social protection programmes are feasible and have a marked effect on the reduction of poverty.

Social protection is a powerful tool for preventing and alleviating poverty and inequality. Social security systems in many developed market economies reduce poverty and inequality by half or more. There is also a growing number of examples of the role of social transfers in successfully combating poverty in Africa, Latin America and Asia, with much quicker results than the ones expected from a trickle-down effect from economic policies. For a low-income country, even a basic social security system can make the difference between achieving or not achieving Millennium Development Goal (MDG) No. 1 of halving poverty by 2015.

The ILO has put forward a proposal for the adoption of an approach to social security provision centred on the guarantee of a "basic social security package" which would be provided to all citizens/residents. The Basic Social Security package, as defined here, consists of a basic and modest set of social security guarantees implemented through social transfers in cash and in kind - for all citizens, ensuring that ultimately:

• All residents have access to basic/essential health care benefits through pluralistic delivery mechanisms where the State accepts the general responsibility for ensuring adequacy of the delivery system and its financing;
• All children enjoy income security at least at the poverty level, through various family/child benefits aimed at facilitating access to nutrition, education and care;
• Some targeted income support is provided to the poor and the unemployed in the active age group;
• All residents in old age or with disabilities enjoy income security at least at the poverty level, through pensions for old age, disability and survivors.

The Basic Social Security package thus consists essentially of a guaranteed set of basic social transfers in cash or in kind to all. It is formulated as a set of guarantees rather than a set of defined benefits. This leaves the option open to individual countries to realize these guarantees by way of means-tested, conditional or universal transfers. The essential fact is that everybody in a given society can access these essential transfers. While these are conceptually a part of the country's social security architecture, in the majority of countries the benefits provided would most likely have the characteristics of social assistance rather than social security benefits. It is assumed here that the basic/low benefits are most likely financed through general taxation.