Social protection in low income CIS countries

The process of transition from a centrally planned to a market economy in countries of Europe and Central Asia, which started more than a decade ago, seems to be reasonably close to its successful completion in the most advanced countries of the region, while still having a long way to go in others. It has been especially turbulent and painful in the seven poorest countries of the Commonwealth of Independent States (Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Tajikistan, and Uzbekistan, hereafter referred to as the CIS-7 countries). Unprecedented increase in poverty in these countries has strongly increased the demand for social protection, while at the same time considerably limiting resources available for this purpose. The objective of this paper is to review the current systems of social protection in CIS-7 countries and to provide recommendations on how countries could better protect the most vulnerable of their populations, reducing abject poverty, at affordable fiscal costs. The remainder of this paper is organized as follows. Next section discusses major socioeconomic developments in the CIS-7 countries during the transition period. Section 3 describes issues and challenges faced by the social protection systems of the CIS-7 countries in the 1990s, analyzes trends in public spending on social protection, and offers general framework for future social protection policies in these countries. The fourth section reviews situation in the pension systems of the CIS-7 countries and discusses options for their reforms. Section 5 concentrates on unemployment benefits in these countries, and section 6 - on social safety nets. The last section is reserved for conclusions and recommendations.