Social Safety Net in the Kyrgyz Republic : Capitalizing on Achievements and Addressing New Challenges

Abstract

The present report was prepared upon the request of the Government of the Kyrgyz Republic to inform policy decisions on reforming the existing safety net. The report aims at providing analytical underpinning of the country's ongoing safety net reform, along with venue for policy discussions with the Government and stakeholders on the immediate as well as on the longer-term challenges related to designing and implementing of a modern national safety net. The report's focus is on the analysis of the poverty reduction impact, targeting accuracy and coverage of the existing non-contributory social benefits, the poverty-targeted Unified Monthly Benefit (UMB) in particular, with the objectives of recognizing the strengths on which the reform can capitalize, identifying opportunities for improvement and fostering consensus building among Kyrgyz policymakers regarding the options for reforming the UMB and the broader vision of public policy in social assistance and the feasible instruments for its implementation. The focus of the report on the UMB is also determined by the need of identifying safety net instruments for mitigating the adverse effects of the economic shocks which are already affecting ECA countries, including the Kyrgyz Republic, on the poor and vulnerable. The safety net in the Kyrgyz Republic faces multiple objectives: (a) to redistribute income to the poorest and most vulnerable, with an immediate impact on poverty and inequality; (b) to help households manage risks by maintaining consumption and assets in the outburst of shocks, such as the food, fuel, financial and economic crises; and (c) to protect the livelihoods of the negatively affected by structural reforms aimed at economic growth and efficiency gains.