How to organize social protection of the population in times of crisis?

By the order of the President of Azerbaijan dated March 19, the Ministry of Labor and Social Protection of the Population (MLSPP) was given 25 days to prepare relevant proposals to address employment and social problems. During this period, a working group headed by the Minister of Labor and Social Protection of the Population must submit its proposals to the Cabinet of Ministers. In this article, I would like to share my views on the organization of the working group and the content of the proposals.

First, the working group should include, along with government officials, representatives of interest groups (children, the disabled, pensioners, public associations specializing in socio-economic and employment issues of the poor), as well as representatives of social research-oriented think tanks and institutes. This is important because different groups have different interests, and taking them into account can have a positive impact on the comprehensiveness and quality of the proposals prepared. However, in recent years, the restriction of action opportunities of civil society has reduced the effective participation level of free and independent organizations.

Second, the working group has a lot of time to prepare proposals in the current emergency. Currently, the implementation of a quarantine regime, as well as a social isolation campaign, “Stay Home”, have led to the closure or restriction of businesses affected by the coronavirus. This has created various social problems in the first place for low-income families, pensioners, the disabled, and the unemployed, along with those who work there. Therefore, I think that the MLSPP should not wait for the time allotted for the preparation of proposals in this direction, and put their proposals to public discussion as soon as possible.

Finally, I believe that in order to organize effective social protection of low-income groups affected by the coronavirus, additional funds should be allocated from the state budget and the Milli Majlis should reconsider the 2020 state budget to adjust social expenditures.

As for social protection measures, I believe that it should be aimed primarily at the protection of the poor and the unemployed and should meet the needs of pensioners and recipients of social benefits in accordance with modern requirements. Therefore, I suggest that:

  1. In order to determine the targeted state social assistance, the need criterion for 2020 should be increased from 160 AZN to the current cost of living in the country - to 190 AZN. In this regard, at the next meeting of the Milli Majlis, amendments should be made to the Law “On the Limits of the Need Criterion for 2020 in the Republic of Azerbaijan” dated November 29, 2019. I think that the amendments should come into force on April 1. In addition, the scope of targeted social assistance should be expanded. I would like to note that as of January 1, 2020, 298.9 thousand members of 72.2 thousand low-income families received targeted state social assistance and its average monthly amount per capita was 50.03 AZN.
  2. Electronic applications must be accepted in order to register at the employment center to determine the number of unemployed people affected by the coronavirus as soon as possible, and applicants must be registered as unemployed and job seekers immediately. In addition, all registered employers and those with unemployed status must be paid a monthly unemployment benefit at the minimum wage level. In this regard, the Milli Majlis should make appropriate changes to the Law of the Republic of Azerbaijan "On the 2020 Budget of the Unemployment Insurance Fund" dated December 16, 2019, and should increase unemployment insurance payments in accordance with current needs. I would like to note that as of January 1, 2020, the number of unemployed people registered with the employment services was 81.3 thousand, of which 6.6 percent or 540 people were paid unemployment insurance premiums. The average amount of unemployment insurance payments was 276.4 AZN.
  3. The minimum pension should be increased from 200 AZN to 300 AZN. To do this, the president must sign a decree and the increase will take effect on April 1. Pensions should be delivered to retirees through mobile ATMs and public financial control over the pension payment schedule should be increased. I would like to note that as of January 1, 2020, 1,270.6 thousand retirees were registered in the State Social Protection Fund under the Ministry of Labor and Social Protection of the Population, which is 12.8 percent of the country's population. 58.4% of them receive old-age pensions, 30.2% - disability pensions, and 11.4% - pensions the loss of the head of the family. The average amount of assigned monthly pensions was 263.6 AZN and was equal to 41.5% of the average monthly salary.
  4. The amount of all types of monthly and lump-sum benefits should be increased by 50 percent. I would like to note that as of January 1, 2020, 401.2 thousand people were assigned monthly social benefits. The number of recipients of age benefits was 82.4 thousand people, disability benefits - 180.5 thousand people, benefits for loss of the head of the family - 47.0 thousand people, benefits for children under 18 receiving due to limited health opportunities - 63.0 thousand people, other benefits - 28.3 thousand people.
  5. In these difficult times, discounts on utility payments should be applied, and the supply of electricity, gas, and water should not be interrupted due to debt. I suggest that all unemployed, who are users of the social security program in all the categories listed above, recipients of targeted social assistance, all types of pensioners, families of martyrs, persons with disabilities in connection with the war or the events of January 20, 1990, persons diagnosed with 1st or 2nd degree disability or died as a result of the Chernobyl accident, as well as participants in the elimination of the consequences of the Chernobyl accident, and conscripts must be exempted from utility payments for a period of 3 months, starting from March 1.
  6. Finally, the labor of employees of health facilities, pharmacies, shops, banks, post offices, public service companies, and private enterprises (internet and other means of communication) should be stimulated during the pandemic, and they should be provided with the necessary protective equipment - medical masks, medical gloves, and other equipment at the expense of allocated funds.
  7. The Central Bank and the Ministry of Finance should recommend to banks, non-bank credit organizations, and insurance companies to grant a delay for loans and insurance payments of the population and businesses affected by the pandemic.
  8. All of the above activities should be carried out in conditions of maximum transparency and accountability.

Gubad İbadoglu

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