Kyrgyzstan

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Situation and Priorities

Social protection situation

The social protection system of the Kyrgyz Republic has undergone several reforms on the level of individual programmes in the last three decades. Yet, significant gaps persist in both legal provisions and in terms of effective coverage, adequacy of benefits and access to social care services, exposing all age groups to a wide range of risks throughout their lifecycle.  The share of the population covered by at least one social protection cash benefit (effective coverage) is 41.7 per cent compared to 47 per cent of the world's population, while 73.6 per cent of the population is covered by social protection

Kyrgyz Republic invests, 10.6 % of GDP, more than most lower middle-income countries in social protection, but spending is concentrated on income security in old age. The main social protection programmes with substantial funding from the national budget are contributory pensions, state benefits, and basic and mandatory health insurance. Investment in tax-financed programmes has been limited. Expenditure on children, for example, is very low (1.2 per cent of GDP in 2020), illustrating the importance placed on social insurance (contributions for certain contingencies, such as pensions, are earmarked in the budget for that purpose only). Investment in labour market programmes is also exceptionally low (just 0.2 per cent of GDP in 2019).

Economic informality is a reality observed in the last three decades of the Kyrgyz Republic’s history. The informal economy level has grown in recent years hovering between 23 and 25 per cent between 2014-2023. Informal work often entails small, unsafe and unhealthy working conditions. It exacerbates challenges with low skills, low productivity and irregular incomes, leading to an increased likelihood of being and remaining “poor”. Informal workers do not exist officially: they are not recognised or registered, and are not protected by labour legislation – nor do they benefit from i effective implementation of social protection. The ‘missing middle’’ in Kyrgyzstan – those who neither receive employment-based entitlements nor are eligible for social assistance –constitute some 70 % of working age population. For example, the child benefit uy-bulogo komak has very low coverage. Maternity and unemployment protections do not cover many people experiencing these contingencies today, and benefits are inadequate for those few who are receiving them.

COVID-19 and other crises

In response to COVID-19, the Kyrgyz Government developed a number of policy packages in 2020 and 2021. In addition to a health sector contingency plan, the focus of policies has been on stimulating the economy and supporting enterprises, particularly increasing liquidity. This has included the deferral of tax payments, temporary exemption of land and property taxes, subsidized credit lines for SME funding, simplified access to credit, financial mechanisms to support exporters, adjustments to procurement contracts, and measures to manage inflation and the exchange rate, among others.

There has been, however, less action to protect jobs, workers and incomes. Early measures included the prohibition of the dismissal of workers and employees (except for good reasons), a request that work arrangements be adapted, temporary price controls on essential food items and food distribution to low-income families. Government used existing administrative tools to expand income and livelihood support through the simplification of procedures for unemployment benefit payments, greater temporary financial support to families with children under 16 years of age, and one-time loans to low-income families for business or farm development.

Government and social partner priorities

The Government of the Kyrgyz Republic in 2021 continued addressing adverse impact of COVID -19 pandemic on social protection and has simultaneously initiated a series of legal and policy reforms with an aim to create a more coherent and enabling framework for sustainable socio-economic development.  The actual reform processes begun in the second half of 2022 focused on following SPF priorities:

  • Draft national social protection strategy
  • Adopt Inclusive Country umbrella policy for inclusion of persons with disabilities
  • Reform pension system
  • Support transition from informal to formal economy and progressively extend coverage with social protection to as many informal workers as possible

Funding gaps / Support the ILO

US$ 100,000

Support the development and costing of national social protection strategy

Impact: N° of persons effectively covered (related SDG 1.3.1) - 600,000 workers and their families
US$ 400,000

Improve social protection financing for disability programmes, and piloting integrated skills, labour market inclusion and income security nexus of interventions for inclusion of persons with disabilities

Impact: N° of persons effectively covered (related SDG 1.3.1) - 100,000 workers with disabilities
US$ 50,000

Pilot mechanisms to extend social protection coverage with maternity and unemployment benefits to workers in informal economy

Impact: N° of persons effectively covered (related SDG 1.3.1) - 300,000 workers

Support the ILO

Workspaces

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ILO Experts

IMG
Liliia Kachkinbaeva
Technical Officer
IMG
Bolotbek Orokov
National Coordinator