The main conclusions of UNICEF study and the assessment of social protection in Uzbekistan in general and in relation to children and youth in particular in an interview with the magazine “Economic Review” are reported by Umid Aliev, the social policy adviser of the UNICEF office in Uzbekistan.
Social protection of childhood from the perspective of a pandemic
According to the research of UNICEF, Uzbekistan managed to reduce poverty rate by 39%. This was previously discussed during the author's TV show of the Center of Economic Research and Reforms, using the UNICEF report, "Creation of a national social protection system that meets the interests of children and youth in Uzbekistan." Please tell us about the main findings of this study. How do you assess the protection system in Uzbekistan in general and the attitude towards children and youth particularly?
The UNICEF study that you mentioned was conducted in 2018-2019. It was based on the data from the national household survey “Listening to the Citizens of Uzbekistan”, which was conducted in 2018. 4,500 households were interviewed to obtain special information on their income, consumption, employment and family welfare. These data formed the basis for a detailed review of the social protection system of Uzbekistan and the proposals for its reform.
The main strength of the social protection system in our country is the presence of a wide range of different programs covering all human life cycles. For example, pregnant women are granted maternity leave and child support upon reaching the age of 2, or children with disabilities are eligible for benefits. Able-bodied residents of our country have the right to receive benefits or survivors’ pension, disability or low income. In case of loss of work, citizens can apply for unemployment benefits, participate in public works, vocational training courses. Upon reaching old age, people receive pensions or old-age benefits. Social protection programs play an essential role in ensuring the well-being of the people of our country. As you already mentioned, according to UNICEF estimates, social protection programs reduce the overall poverty level in Uzbekistan by 39%. Otherwise, in the absence of a social protection system, the number of people living in poverty would be much higher. Additionally, social protection programs help reduce income inequality. For example, in Uzbekistan this effect was 15%.
Now, let us take a closer look at the factors that determine the effect of social protection on poverty and inequality reduction. Here we can see a rather interesting picture. When we consider the old-age pensions account for up to 80% of all costs in the social protection system, they estimate about 77% of the poverty reduction effect. At the same time, the contribution of social benefits for low-income families is minimal, which amounts to only 8%. The main reason for this imbalance is the difference in coverage. For example, if among children under the age of 18, about one in five (19%) is a beneficiary of some kind of social protection program, then the coverage rate decreases to 13% among adults of working age and rises to 88% among people of retirement age and older.
It is clear that the low coverage is the main reason for the insufficient effectiveness of social protection programs, in particular, social benefits for low-income families with children, not all of who are eligible to receive benefits with some reasons.
It should be noted that during the pandemic period, the government pays special attention to supporting vulnerable families. In particular, a number of decrees and resolutions were adopted on the temporary extension of social benefits, compared with the beginning of this year, almost twofold increase in the number of recipients of benefits by the end of the year. Specifically, I would like to point out one-time financial assistance, an average of 500,000 soums for each child under 16 from vulnerable families, provided at the beginning of the school year in order to help families prepare their children for school. Examples from many countries show that it is often precisely the lack of funds for children from vulnerable families to buy school clothes, school supplies, etc. becomes an obstacle to school attendance and, therefore, education. However, taking into account the measures taken, the problem of coverage of social benefits stays relevant.
Is social policy effective in Uzbekistan?
In addition to the problems caused by insufficient coverage, there are a number of systemic problems that reduce the effectiveness of social protection.
At present, despite the strengthening of the centralization and coordination of the implementation of measures to combat poverty, the social protection system in Uzbekistan continues to remain rather fragmented, where powers and functions are distributed among various state bodies, such as the Ministry of Finance, the Ministry of Health, the Ministry of Public Education and others. As a result of weak interagency coordination, there is no comprehensive approach to the provision of social protection. At the central and local levels, there is no single coordinating, oversight body responsible for the entire spectrum of social protection issues.
The definition of disability is based on criteria predominantly of a medical nature, which contributes to the persistence of discriminatory attitudes towards persons with disabilities in society and does not take into account the difficulties arising from their contact with the environment (in particular, the lack of appropriate infrastructure to help persons with disabilities move freely). The lack of clear criteria for determining the degree of disability reduces the objectivity of decisions when assigning a disability group, which leads to discontent among persons with disabilities, restricts their access to social protection, and creates unnecessary red tape in establishing and assigning disability.
Services and payments to a vulnerable family in cases of use on a "declarative basis", that is, a person receives only assistance provided by the organization to which he applied. At the same time, literate vulnerable persons have low legal information, are not aware of government guarantees and do not know where they apply.
As in other countries of the world, the social system of Uzbekistan is under severe stress due to the pandemic. The head of the Ministry of Economic Development and Poverty Reduction, Jamshid Kuchkarov, said in August that at the beginning of 2020 financial assistance was provided to 552 thousand families every month. In June this figure reached 774 thousand, and in July - 876 thousand. According to him, by the end of this year it is planned to bring the number of families receiving social benefits to 1 million 200 thousand. How do you assess the sustainability of the social protection system in Uzbekistan in the extreme conditions of a pandemic? How does the pandemic affect the children and youth of Uzbekistan, their social protection?
As in many countries of the world, the coronavirus pandemic has had a significant negative impact on the well-being of people in Uzbekistan. The main problems are identified as loss of jobs and sources of income, which lead to lower incomes and increased poverty in the country.
According to UNICEF estimates, as a result of the restrictive measures imposed by the pandemic, household incomes fell by an average of 33%. The most significant decline occurred among people of working age and families with children. Depending on the duration of the pandemic, an additional 300,000 to 1.1 million children may find themselves in poverty. According to the study by the World Bank, the pandemic has increased poverty in Uzbekistan by 450-880 thousand people. Moreover, it is child poverty that has the most detrimental effect on the development of human capital in the country. This is due to the fact that children living in poverty do not have sufficient resources for adequate nutrition and a decent education. For example, according to our estimates, the probability of getting preschool education for children from the poorest families is 1.4 times lower than for children from more wealthy families. In addition, children with stunted growth (due to malnutrition) earn 26% less when they reach adulthood than those who did not have stunted childhood growth.
A group of American and British economists estimate that the total cost of child poverty in the United States was $ 1.03 trillion, or 5.4% of GDP. The following consequences were identified: a decrease in potential earnings, an increase in street crime, a deterioration in the health of children, an increase in the cost of combating crime, an increase in child homelessness and an increase in the cost of corrective measures.
COVID-19: The Social Role of Governments
It should be noted that during the pandemic, a decrease in income is observed among all population groups in our country. However, low-income families and people employed in the informal sector or in low-paid jobs turned out to be the least prepared for the challenges of the pandemic. Without sufficient savings, these families quickly found themselves in extremely difficult situation. Therefore, the expansion of social assistance programs in these conditions is a correct and timely measure.
However, preliminary estimates indicate the need to further expand social protection programs. For example, UNICEF estimates that prior to the pandemic, only 25% of low-income families received social benefits. Given that the number of low-income families has increased as a result of the pandemic, even after the aforementioned two-fold increase in the number of recipients of social benefits, a fairly large number of low-income families will still be left out of social assistance.
As for financial stability, I would like to note that our country annually spends about 6% of GDP on social protection. This is lower than in many middle-income countries. In addition, 85% of these costs are accounted for by social insurance, that is, they are not financed from the state budget, but from social contributions. For example, in Uzbekistan, the total annual expenditure on social benefits for families with children is about 0.6% of GDP, and these benefits cover about 17% of children. In other middle-income countries, similar expenditures in GDP and child enrollment tend to be higher.
Under existing conditions, the reform of child benefits carried out in order to avoid a sharp increase in government spending. Particularly, UNICEF has developed a detailed proposal for the phased introduction of a child benefit to replace existing social benefits for families with children. Under this proposal, the initial investment required will be 0.8% of GDP, which will be gradually increased to 1.2% of GDP. It should be noted that the step-by-step increase in financing of child benefits can be carried out entirely at the expense of additional tax revenues resulting from the projected economic growth. The details of this proposal are set out in the UNICEF report “Investing in the future of Uzbekistan: social protection of children and families in Uzbekistan”, published on the UNICEF website. Consequently, the reform of child benefits and the entire social protection system does not actually lead to a decrease in its financial sustainability.
Perspectives for Social protection
What social protection measures need to be taken to minimize the negative impact of the pandemic on the welfare of children? Can you mention the best practices of successful countries in social protection during a pandemic?
The pandemic has indeed become a global challenge for humanity, and all countries have taken different measures to support the population, private sector, business, etc such as cash benefits, wage subsidies, loan deferrals, taxes, and other payments. In our country, a number of measures have also been taken to minimize the negative effect of the pandemic. In particular, this is the provision of paid sick leave with the payment of up to 100% of the salary to the parents of quarantined children, the prohibition of termination of the employment contract for an employee who is a parent of a child under the age of 14 who is infected with a coronavirus infection or is taken on quarantines, compensation to entrepreneurs for payment of interest on loans and the provision of loans for the payment of salaries of workers, expansion of public works and employment support programs, extension of social benefits payments, increases in basic pensions and benefits and increased funding for social benefits to increase the number of recipients.
The effectiveness of measures depends largely on the conditions of each country. Considering that in our country only 6 million out of the 15 million working-age population are included in the pension system, measures related to supporting the formally employed should not be considered as the most important step. In the sense of widespread informal employment, social assistance programs in the form of benefits or financial support have proven to be more important.
In world practice, the provision of social benefit can be provided via two approaches: a universal approach, when assistance is provided to every citizen of the country; a targeted approach, when assistance is directed only to citizens who are in need.
It is worth noting that during the pandemic, high-income countries have provided universal payments to every adult (USA, Singapore, Hong Kong, Japan) or all children (Iceland). The focus is directed not to support the disadvantaged citizens only, but ensuring to cover every citizen of the country. This approach appears to be more relevant during the pandemic, since it provides access to social assistance for the largest possible number of the population, including the most vulnerable groups.
The majority of low- or middle-income countries preferred a targeted approach (India, Malawi, Nigeria, South Africa, Brazil, Ecuador, Malaysia). Usually, the limited budget for social assistance programs that is not sufficient for universal approach is the main reason for using targeted approach in the developing countries. Naturally, the total cost of social assistance with a universal approach usually exceeds the cost of a targeted approach, but the difference is not huge. However, a universal approach can be implemented step by step, thereby avoiding a sudden increase in the government's fiscal obligations. In addition, a combined approach can always be used when elements of a universal and targeted approach are combined. For example, instead of using income or wealth that are difficult to measure reliably, categorical targeting can be used. That is, instead of considering income level or property, categories of the population are determined that will most likely need social assistance more than others. Typically, these categories include the unemployed population, especially young people, persons with disabilities and families with children. According to this category, the corresponding benefit are provided. It should be noted that categorical targeting allows to identify disadvantaged families effectively. For example, according to the results of the nationwide survey of households “Listening to the citizens of Uzbekistan”, 92% of low-income households have at least one child. Therefore, categorical targeting in providing social benefits to the children should accurately reach at least 92% of all low-income households, which is a very decent indicator by international standards.
In our case, I would like to emphasis on more detail to the social benefits for families with children, or the so-called children benefits, because in the conditions of our country they have a special importance. First of all, this is due to the fact that child benefits play a great role in the development of human capital. Several studies confirm the positive impact of child benefits on the creation of a favorable family environment and conditions necessary for health promotion, physical and intellectual development of children, their continuous and high-quality education. In turn, the development of human capital should be given special attention in the conditions of Uzbekistan, since it is expected that by 2030 the share of the working-age population in Uzbekistan will reach a historical maximum with unprecedented labor resources. With the necessary knowledge and skills, these resources can be a base for a jump in the socio-economic development of the country, therefore, today investments in the development of human capital are especially important. With such conditions, it is especially important to provide children in Uzbekistan with sufficient resources, including child benefits, for a decent start in life. Consequently, the existing gaps in covering the low-income families with child benefits must be addressed as soon as possible, and the introduction of the principles of categorical targeting is the most effective way to achieve these goals.
How do you see the future of the social protection system in Uzbekistan?
As noted above, the existing social protection system in Uzbekistan has a number of strengths. Unfortunately, there are also systemic shortcomings that prevent social protection in our country from meeting international standards. However, our country has all the necessary resources to reform social protection, in order to build a system that fully meets international standards.
The basic principle of such a system is that social protection is considered as a basic right of every person. For example, according to Article 26 of the UN Convention on the Rights of the Child, “States Parties recognize that every child has the right to enjoy the benefits of social security, including social insurance, and take the necessary measures to achieve the full implementation of this right in accordance with their national legislation”, and Article 27 states that "the participating States recognize the right of every child to a standard of living necessary for the physical, mental, spiritual, moral and social development of the child." Therefore, first of all, it is necessary to solve the problems with insufficient covering of many types of social benefits and guarantees - child benefits, pensions / benefits for persons with disabilities, the inclusion of maternity leave and child benefit for employed mothers in the social insurance system, as well as informally employed social insurance system.
The basis of the social protection system should be built upon an integrated approach, in which the provision of social protection is based on an effective combination of various social support programs, considering the needs of the family or individual. A difficult life situation usually arises due to several reasons and circumstances at once. Usually, solving only one or two of these problems does not help to run away from a difficult life situation permanently. For example, a single mother with young children faces a difficulty in finding a job, and this is due to several reasons simultaneously - the lack of existing jobs and lack of necessary qualifications to care children. The situation can be further aggravated if you have a child with a disability or other dependent family member. Or another example is a person with a disability who needs support in obtaining medical care, social rehabilitation, employment, etc. In both the first and second cases, social protection should be launched with a professional assessment of the situation and needs. Then, based on their needs, the appropriate social support is determined. As we can see from the above examples, social support should be comprehensive. For example, in the first case, a woman needs financial assistance, support to find a kindergarden for her children, a help to acquire professional skills and employment. In the second case, financial assistance is needed to cover the costs of medical care and maintenance of life, consultations with a psychologist, assistance in obtaining work skills and employment. An integrated approach to social protection requires strong inter-institutional coordination and management. However, in Uzbekistan, due to institutional fragmentation, each department is responsible only for certain social programs. There is a need for an effective mechanisms for interagency cooperation and governance. As a result, the social support provided does not always meet the needs or is not sufficiently diversified to cover all the needs of a family or an individual. The creation of an effective mechanism for interdepartmental coordination and management should be one of the main priorities in reforming the social protection system in Uzbekistan.
It is easy to see that social protection is closely related to poverty reduction. In many ways, social protection programs and poverty reduction programs are completely compatible each other. Employment promotion programs are also an integral part of the social protection system. Therefore, effective measures to reduce poverty are only possible with a strong social safety, and the fight against poverty must begin with building a strong social safety.
The implementation of an integrated approach in our country is also difficult due to the lack of a system for the provision of professional social services at the place of residence of the population. Today, social services are concentrated only in specialized institutions and are provided without mutual coordination, in fragments, which significantly reduces their effectiveness. In addition, the availability of specialized institutions is rather limited, and, as a result, a large number of the population is left without the necessary social support.
In the context of international best practice, the professional social worker is a key link in providing social protection to the population. Based on the approach of social support (case management), the social worker carries out an initial assessment of the needs of those in need of social protection and coordinates the provision of social support. A professional social worker can provide social services based on his own qualifications, or, if necessary, transfer a person who is in need of social services to an appropriate specialist. However, professional social work is not defined in the legislation of Uzbekistan. In the social protection system, there is a very limited number of staff units with social work functions. Specialists performing social work functions lack professional guidelines and standards for interaction with individuals and families in difficult life situations.
Lack of professional services at the place of residence also means the absence of a system for early identification of vulnerabilities, early response and social support of vulnerable families. Due to the lack of support in the early stages of vulnerability, for example, illness, job loss, etc., the life situation of a person / family continues to deteriorate, and government interventions occur only at the later stages of the problem and, therefore, in order to solve it more resources are required. The social protection system should include a strong professional social work system available to all residents of the country.
Thus, in the future, the social protection system in Uzbekistan seems to me to be highly effective, providing social assistance throughout the entire life cycle through the provision of social security and social services with the help of highly qualified, professional workers, guaranteeing the necessary social protection to each resident of Uzbekistan, taking into account his needs.
Interviewed by Ziyoda Rizayeva and Viktor Abaturov, Center for Economic Research and Reforms
Bobojanov Shakhrukh and Hasan Boboev, translation, Center for Economic Research and Reforms