Center of social and economic research «SocEconik» 26.06.2008 Cash transfers to households and children in the KR - assessment of efficiency Center of social and economic research «SocEconik» 26.06.2008

Cash transfers to households and children - assessment of efficiency Review of the existing situation with cash social benefits Social and economic situation and poverty in the Kyrgyz Republic Review of state benefits financing scheme Assessment of targeted social assistance efficiency

Social and economic situation and poverty in the Kyrgyz Republic (1) Total population grew by 7% during 1998-2006 Economic growth (GDP) during the same period was almost 20%, and inflation level - by 33%. Households revenue, including social transfers (pensions and benefits) grew more than 3 times . Almost half of population is in the poverty, and about 10% is extremely poor.

Social and economic situation and poverty in the Kyrgyz Republic(2) Poverty was reduced from 63,6% in 1998 to 39,9% by 2006 Extreme poverty decreased by 9.1% in 2006 Poverty is a rural phenomena (about 80% of all extreme poor locates in rural area) The big size families (which are about 3.4 times bigger than average size), have the highest risk to join the extreme poverty group, and especially families with big number of kids (3 and more)

Social and economic situation and poverty in the Kyrgyz Republic (3) Among families with pensioners, the families with 3 pensioners have the highest risk to become extreme poor Dependency ratio per able family member is the most high in extreme poor households (about 3 dependants per one able member) Loss of job has a significant impact on well-being of a family 5

Review of state benefits financing State expenditure on benefits as a share of GDP

Assessment of efficiency of a targeted social assistance (1) Share of UMB recipients and extreme poor, 1998-2006гг. (as a % of total population)

Assessment of efficiency of a targeted social assistance (2) Distribution of UMB recipients by level of well-being As a % of total UMB recipients

Assessment of efficiency of a targeted social assistance (3) Assessment of a targeted social assistance by decile groups (%)

Assessment of efficiency of a targeted social assistance (4) Distribution of UMB recipients by the level of well-being As a % of total number of UMB recipients

Assessment of efficiency of a targeted social assistance (5) Sources of income by quintiles, including revenues from livestock, 2005

Assessment of efficiency of a targeted social assistance (6) Share of extreme poor receiving benefits, 1998 and 2005 As a % of total eligible population При проведении исследования 1998г., было выявлено, что только пятая часть самых бедных людей получали пособие, хотя право на получение пособия имели свыше 58% крайне бедных. Результаты оценок по данным 2005г. показывают, что среди крайне бедных более одной трети получают пособие, а право на получение пособия имеют только пятая часть крайне бедных граждан. Предполагая, что адресная помощь направлена на работу по предоставлению пособий непосредственно беднейшим, мы сталкиваемся с фактом, когда доля самых бедных домохозяйств, получающих ЕЕП довольно низкий.

Review of current situation with cash social allowances (1) Conclusion Targeting of social assistance continues to be weak – a percentage of not very poor recipients is about 60%. Deduction of UMB amounts from revenues of households receiving state allowances increases extreme poverty level only by 0,4%. Inclusion of livestock revenues aimed at minimization of inclusion errors is not sufficiently effective tool, as it decreases number of eligible households by 1.4% only.

Review of current situation with cash social allowances (2) An analysis of current eligibility criteria by decile or quintile groups makes us sure that there is a need to review eligibility criteria for households to receive state benefits.