A. Targeted Social Protection
190. The system of social protection in the Republic comprises payment of social benefits (a unified monthly benefit and a social benefit), special assistance provided to some categories of citizens, and the provision of social services to needy families and individuals. These activities have brought about several significant changes. The gradual evolution of the social protection system to more targeted forms of assistance has raised the general quality of state benefits. A system of social identity papers (called “social passports”) has been established throughout the Republic. At present nearly 500,000 poor families have social passports.
Because of the rise in the energy tariffs, indigent families (except for Bishkek families) receive compensation for the payment of heat, hot water and natural gas charges. In Bishkek, indigent families are entitled to housing subsidies for utilities. In 2002, compensation for electricity charges was also introduced. However, the process of strengthening social protection and making it more focused has also revealed the following issues.
· Ten percent of Kyrgyzstan’s population receives state benefits, and 33 percent of families have access to some form of subsidy. This puts an enormous burden on the national budget. The volume of funding for social payments from the national budget has increased 1.6 times in the three years to 2001, when it amounted to 1,111.3 million soms, equivalent to US$22.96 million.
· The funds provided in the budget are disbursed in an incomplete and untimely fashion. In 2001, the total amount needed for payment of state benefits was 521.2 million soms, while only 348.6 million soms (66 percent) were disbursed.
· In spite of the growth in the level of benefits, state support for poor strata of citizens remains inadequate.
· Compilation of the social identity database is difficult due to outdated computer equipment in the responsible agencies.
Given the present situation in the social protection system, the principal aim is to achieve an effective and targeted system of social protection.
Inadequate budget resources hinder further development of the system of social protection. Thus, available resources are mainly directed at stabilizing living standards.
191. The main priorities/objectives for achieving this aim and for stabilizing the situation are:
· fostering the principle of targeted assistance; and
· raising the level of social protection.
Targeted assistance will be achieved through the following implementation mechanisms:
· Streamlining the existing system of benefits through the adoption and implementation of a special state benefits law.
· improving the methodology for identifying citizens who need state support through the adoption of new standards for income from land and livestock.
· Improving social mechanisms for the support of citizens for energy tariff increases through the introduction of compensatory payments for poor families and simplifying procedure of applying for such compensation. The total amount of compensation that is expected to be paid out in 2002 amounts to US$1.6 million.
The improvement in the level of social protection will be effected through the following mechanisms:
· Gradual increase in the guaranteed minimum consumption level (GMCL). In the long run, its level should reach the cost of the minimum consumer budget. The approved increase in GMCL to 140 soms per month will require US$14.6 million for payment of state benefits in 2002. However, this will bring the benefit to a level of only 12 percent of the cost of the minimum consumer budget.
· Upgrading the methodology for calculating minimum social standards will help to ensure better social orientation of the budget and regulation of limited budget resources.
· Timely and full (mainly cash) payment of state social guarantees.
192. Further development of the social protection system provisions:
· Continued improvement of the methodology for identifying needy people and the targeted provision of state benefits.
· Gradual bringing of the GMCL to the level of the minimum consumer budget.
· Creating conditions that provide poor strata of society with opportunities for independent sustenance. The pilot project on block payment of the annual amount of the unified monthly benefits to poor families will be continued.
· Developing a social identity database, that will be able to provide an accurate picture of regional poverty.