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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.
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.