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Social Assistance in Central Asia Countries: Government Reform Priorities

Elena GlinskayaWorld Bank

April 15, 2011

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Five Social Assistance Programs (2 categorical and 3 targeted)Five Social Assistance Programs (2 categorical and 3 targeted)

Targeted social assistance: Cash payment to individuals (families) with average per capita monthly income below 40 percent of subsistence minimum set for each oblast.

  Housing assistance: Compensation for low income and vulnerable

groups to cover expenses on housing maintenance, utilities.  Assistance to families with children: Birth allowance, care allowances

for under children under 12 mos, and monthly allowance for children under 18. Available to families with per-capita income below 60 percent of subsistence minimum set for each oblast.

  State Social allowances: Disability allowance, survivor allowance, and old

age allowance.   State Special allowances: Monetized privileges (for 17 categories ).

KazakhstanKazakhstan

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KazakhstanKazakhstan

coverage, and distribution of beneficiaries across five social transfers programs

Average Transfer

Coverage Generosity Distribution of Beneficiaries

across per-capita expenditure quintiles

tenge Q1 Q2 Q3 Q4 Q5 All social assistance 4,014.6 27.9 10.2 37.0 21.1 16.0 13.5 12.4 Targeted Social Assistance 3,551.6 0.9 10.4 72.6 18.7 5.7 1.6 1.4 Housing Assistance 1,281.4 0.4 4.5 26.6 18.6 16.8 16.4 21.7 Social Allowances 6,588.5 12.0 14.6 41.6 20.9 16.2 11.7 9.7 Special Allowances 2,407.4 14.8 5.8 42.9 21.7 15.9 10.5 9.0 One-time social transfers 1,089.1 7.1 2.9 16.8 19.5 15.4 25.1 23.2

Notes: Average transfer is calculated for direct beneficiaries, on a per-months basis in 2008 tenge Coverage is the portion of population in each group that receives the transfer. Specifically, coverage is: (Number of individuals in the group who live in a household where at least one member receives the transfer). Generosity is the program benefits measured as a percent of recipient household consumption Source: Household Budget Survey 2008; Bank staff calculations

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KazakhstanKazakhstan

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KazakhstanKazakhstan

A well-targeted program has no political support.

Why?

There is no activation or graduation elements built in. Welfare dependency is suspected and feared

“….All those who can work, should work…..”

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KazakhstanKazakhstan

Reform Priorities:weaving in activation and graduation elements

Policy instruments for promotion of safety net beneficiaries   Design features of activation-compatible SSN eligibility criteria and the target groups; the amounts of the

benefits, the terms of their receipt (i.e. time limits, conditions such as work requirements, mutual responsibilities, requirements to participate in job search and activation activities); and enforcement provisions.

  Institutional arrangements to support activation the relationships between the central ministries and local

governments; outsourcing arrangements; enrolment processes and information management (such as registries and MIS); particulars of case management (involvement of social workers in monitoring); payments processes; provision of complementary services.

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TajikistanTajikistan

Budget expenditures on social assistance in 2009

Program

Annual budget in US$ millions

Share in GDP, in percentage points

Social Assistance $9.96 0.20% Social Assistance plus Social Pensions $22.18 0.45% Social Pensions $12.22 0.25% Main social assistance programs:

Electricity & Gas Compensation $4.87 0.10% Compensation to needy families whose children study in school (Conditional Cash Payments)

$2.86 0.06%

Sources: Ministry of Finance, State Agency for Social Insurance & Pensions, World Bank

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TajikistanTajikistan

Coverage rate – share of households in the poorest quintile who receive social assistance

(in percentage point shares in households in the poorest quintile)

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TajikistanTajikistan

Reform priorities:

consolidation of the present programs into a single social assistance program;

adoption of a system of targeting of social assistance;

improving management of social assistance systems

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KyrgyzstanKyrgyzstan

Spending / share of GDP

Coverage Cost efficiency/

(%, 2007) share of poorest Q (%, 2005)

cost per 1 KGS reduction of poverty and

extreme poverty gap

UMB 0.53 28.2 38 7.2 11.6 3.1. 1.6 / 4.7

MSB 0.21 12.7 33.3 7.6 6.3 6.4 3.0 / 5.5

0.6 16.3* 12.6* 1.1* 0.8* 0.5* 6.3 / 27.3

*Only for utilit ies and housing subsidies.

Source : Staff calculations based on KIHBS 2005 and administrative data from MOF, MTBF.

Social Safety Net: Summary Performance “Scorecard” Program Targeting

accuracy / share of benefits

captured by Q1 (%, 2005)

Benefit generosity /

share of benefit in consumption

(%, 2005)

Poverty impact / relative reduction of extreme poverty

gap (%, 2005)

Poverty impact / relative

reduction of extreme

poverty rate (%, 2005)

Categorical benefits and subsidies

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KyrgyzstanKyrgyzstan

Trends: decline in coverage (from 10 to 6-7 percent of the

population); diverting major funds for rights-based transfers (post-

Osh)

Reform priorities :preserving gains made earlier; strengthening means-testing and outreach;improving administration and delivery in a

decentralized setting

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Trends:Trends:growth in GDP and in real SSN outlays;Mahalla leaders voicing their discontent for lack of

clarity for defining who is “poor”need to use SSN for other socially-relevant

objectives

Reform priorities:Reform priorities:impending fiscal cuts;improvements in targeting – introducing objective

criteria into Mahalla community targetingtechnology adoption (MIS, registry, etc.)

UzbekistanUzbekistan