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Mr. Ehtisham Ahmad
The demographic characteristics of different regions in the former Soviet Union influence the nature of poverty in the newly successor independent states of the FSU. Despite a common policy inheritance, major adjustments are needed in the major social protection instruments to reflect differences in demographics along with a changing resource base.
Mr. Ehtisham Ahmad
and
Mr. Jean-Luc Schneider
In the USSR in 1990, social security reforms led to the imposition of a uniform system of benefits in a large and demographically diverse country. This required inter-regional transfers, which are now no longer feasible with the demise of the USSR. Relatively high contribution rates also pose a problem for a nascent commercialized sector. The paper argues that benefit levels in some former Soviet Union countries are now unsustainable. The price shock associated with the “transition” to a market economy should lead to a consideration of a “mix” of policies, including a basic benefit in kind. While funded systems may eventually reduce contribution rates, there are implementation difficulties in the medium term.