Challenges For Social Policy
Maryia Akulava
217
404
352
411 373
451
99
181 154 197 185 227
0 50 100 150 200 250 300 350 400 450 500
2005 2006 2007 2008 2009 2010 2011 2012
Wages and Pensions in USD
annual averages
Wages Pensions
Incomes Recuperate after Crisis
3
Growth of real wages and labor productivity
0 50 100 150 200 250 300 350 400
2001 2002 2003 2004 2005 2006 2008 2009 2010 2011
Real Wages Labor Productivity Gap of more than100%
4
Less Poverty
12,7
11,1
7,7
6,1 5,4 5,2
7,3 6,3
4,2
2005 2006 2007 2008 2009 2010 2011 2012 IV
quarter 2012
Poverty Rate
Not Everything is Perfect
42,4
40,2
39,2 38,9
37,9
36,8
38,9
40,8 40,7
2005 2006 2007 2008 2009 2010 2011 2012 IV
quarter 2012
Food Share
in consumption expenditures
Challenges: Migration
• In 2011, new factors:
– Higher wage gap with Russia (currency crisis) – Joint labor market
• No good data:
– Since 2011, number of employed constantly declining: 3% drop in 2012
– 24.7% of companies mention lack of employees as main obstacle to growth
• Right now migration – efficient tool against
unemployment (currently around 6%). In the long run – a
challenge.
Challenges: Demography
• Population is declining and getting older
• Pressure on the pension system
– Current system unsustainable
– Higher retirement age not feasible – life expectancy of men is 65
• Need to reform health and education
– Higher demand for health services – Decline in demand for education
FDI and Privatization
1785
2152
1884
1350
4002
1442
0 500 1000 1500 2000 2500 3000 3500 4000 4500
2007 2008 2009 2010 2011 2012
FDI (bn USD)
Privatization
• Slow process of privatization
• Reasons:
– Fiscal perspective – High risks
– “Renationalization” of assets
– Contradictory understanding of prepared legal acts on privatization
