Developing social protection policies, and identifying fiscal space with International Financial Institutions

Introduction

The COVID-19 crisis brought to forth the stark consequences of the country’s social protection deficit with more than half of the population (57.3 percent) not covered by any social protection benefit. To extend coverage requires the development of effective policies that provide strategies to bring those currently not covered under the folds of social protection but also to strengthen social protection systems to ensure that they are inclusive, sustainable, provide adequate benefits and are responsive to transitions people face in their lives. Public social expenditure on social protection represents around 10.6 per cent of GDP (including on health care) a level below that of some of the other countries in the sub-region. Sustainable social protection financing is critical to ensure the extension of social protection and requires engagement with the Ministry of Finance and the International Financial Institutions (IFI’s) to identify and ensure domestic fiscal space for social protection. This includes consultations with the International Monetary Fund (IMF) on Article IV Agreement, consultations for lending agreement, consultations on the role of social protection as part of a COVID recovery strategy, collaboration towards costing and fiscal space analysis for the extension of social protection within the Agenda 2030, collaboration on technical advice to strengthen the financing of social protection schemes and their prioritization, policy exchanges on critical topics such as the extension of social protection to workers in the informal economy.

The Project is aligned with the Government’s commitment to the:

• Development of a national social protection strategy and strengthening of national social protection coordination mechanisms
• Development of a national poverty reduction strategy
• Development of a policy for the transition from informal to formal economy

The Project is in-line with the new UNSDCF 2021-2025 and the DWCP 2021-2025 signed between the Government of Uzbekistan and the ILO in September 2021, contributing to CF Outcome 4 (DWCP Priority 3: Extending the access of the most vulnerable groups to equitable, inclusive and quality education and social protection).

It is expected, that the Project will also contribute to stronger involvement of social partners into the UN coordinated national development context.

Project overview:

The main objective of the Project is to pilot-test in Uzbekistan dialogue and collaboration with the IMF on financing of social protection priorities identified by national stakeholders in the framework of the National Strategy for Social Protection 2022-2030 (NSSP) and DWCP 2021-2025.. Importantly, the intervention will focus on support to worker’s and employer’s capacity to effectively engage in IMF facilitated consultations on Article IV. So far, social dialogue has not been utilized in Uzbekistan for Article IV associated discussions. Similarly, the Republican Tripartite Committee, so far has not discussed any of the IMF’s reports or recommendations for Uzbekistan. The intervention intends to work with constituents to activate the Working Group on Social Protection within the Republican Tripartite Commission to discuss macro-economic issues pertaining to social protection and to monitor the implementation of NSSP.

The target groups include the Ministry of Finance, the Ministry of Employment and Labour Relations, the Federation of Trade Unions of Uzbekistan (FTUU), the Confederation of Employers of Uzbekistan (CEU). Other important partners include the Ministry of Health, Ministry of Economic Development and Poverty Reduction and civil society organizations as well representatives of categories of people, such as women, and persons with disabilities as the NSSP identifies these also as priority groups.

The Project has two main outputs:

(a) increased capacity of the country to improve governance and sustainability of social protection systems, and
(b) increased capacity of the country to integrate social protection in comprehensive policy responses to support and protect workers and employers during their life and work transitions.

The project supports Uzbekistan’s participation in, and contribution to ILO’s Flagship Programme Building Social Protection Floors (2022-2025) – Second Phase.