Mitigating Social Risks in Kyrgyz Republic

Type Report
Title Mitigating Social Risks in Kyrgyz Republic
Publication (Day/Month/Year) 2004
Publisher World Bank Institute
URL Content/pdfs/Papers/English/0408.pdf
Protecting the poor and vulnerable has been a constant policy priority of the Kyrgyz Government throughout the ‘90s. Despite the low level of GDP and a shrinking revenue base, the magnitude of resources channeled transparently or via quasi-fiscal means for social protection was remarkably high. In relative terms, social protection activities covered between 20% (1995, the peak of the recession during the 90’s) to 12% (2001) of GDP. Without these transfers, poverty would have been higher. However, we found that even programs that have explicit poverty reduction goals inadequately cover the extreme poor, while entailing substantial leakage to the non poor. Benefits are transferred through a complicated web of programs and policies, that are difficult to monitor, stretch the implementation capacity of the administration asked to perform cumbersome means-tests, and impose substantial costs on beneficiaries, the private sector and society as a whole. There is scope for improvements in both program mix and program design, to generate a larger reduction in poverty under the same resource envelope. Other programs, notably pensions, whose legislated function is to provide social insurance for contributors and their dependents, are departing from their role as an instrument for mitigating social risks, and became another redistributive or coping mechanism. While this is an appropriate short-term response given the magnitude of poverty, this may need to be reconsidered over the medium term.

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