| Africa Click on the country for more information |
Burundi
- To offset the impact of the crisis on the poor in 2009, the IMF-supported program accommodated approximately 1.5 percent of GDP of emergency spending on targeted social safety nets.
- In response to the food and fuel shock in 2011, the IMF’s Executive Board approved higher financing in the amount of 0.5 percent of GDP to mitigate the impact of the shock on the country’s public finances.
- The program also included higher spending on social safety net programs targeted at the most vulnerable groups, in the amount of 0.7 percent of GDP.
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Kenya
- As part of the IMF-supported program, the government has expanded targeted programs such as cash transfers to orphans and other vulnerable children (OVCs), as well as elderly and other vulnerable people. As a result, the proportion of eligible OVCs receiving cash transfers increased from 1 percent in 2007 to 15.6 percent in FY 2010/11. Over the same period, the number of eligible households with vulnerable persons receiving cash transfers increased from 200 to 33,000.
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Mozambique
- Under the IMF-supported program, the government revamped its social protection programs in 2011 and increased its budget allocation to social protection to nearly 0.4 percent of GDP for 2013. .
- Mozambique is piloting the UN’s “Social Protection Floor Initiative,” which started in 2011. Under this initiative, the IMF provided analysis of available fiscal space while the ILO and UNICEF offered technical expertise on social protection schemes.
- To leverage fiscal space in designing sustainable social protection schemes consistent with the 2011–14 poverty reduction strategy, the current IMF-program includes a quarterly indicative target floor on priority spending reflecting about half of all spending.
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Seychelles
- The IMF-supported program, approved in late 2008, introduced a cash transfer scheme which aims to protect the most vulnerable segments of the population by replacing untargeted universal product subsidies. In 2012, the budget of the Agency for Social Protection, which administers the means tested cash transfer program, has increased by about 0.4 percent of GDP.
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Solomon Islands
- The IMF-supported program recognizes the need to scale up critical social spending on infrastructure, health, and education to achieve inclusive growth.
- The government remains committed to keep spending on health and education at no less than 32 percent of government-funded recurrent expenditure and to improve the quality of spending by strengthening public financial management and procurement.
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| Europe Click on the country for more information |
Bosnia and Herzegovina
- The IMF-supported program aimed to cushion the aftershocks of the global economic crisis and of the fiscal adjustment on vulnerable groups by avoiding cuts to pensions and reforming the social safety net.
- The rights-based benefits system is being overhauled with help from the World Bank to improve targeting and prevent abuses of eligibility criteria.
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Greece
- A rapid increase in social spending was one of the main drivers behind the large deficits accumulated before the crisis. Since 2000, social security spending in Greece has increased by about 6 percent of GDP and has reached one of the highest levels in the EU. Cuts to social spending, including pensions, were therefore unavoidable.
- To minimize the impact on the most vulnerable groups, pension cuts were targeted to the highest pension recipients and those receiving supplemental pensions. The government has also committed to reviewing other social benefit programs, which are unequally distributed and poorly targeted—for instance, 60 percent of all family benefits go to the 40 percent with the highest incomes.
- The government has launched employment programs that target unemployed youths and jobless households, and is committed to expand public and social work programs and training program to fight long-term unemployment.
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Hungary
- The 2008-10 IMF-supported program helped to stabilize the economy and reduce the negative impact of the global crisis on the poor and
low-income earners. Specifically, a banking crisis was avoided and mortgage borrowers benefitted from the subsequent currency stabilization.
- Despite the nominal freeze of the public sector wages, a top-up payment scheme contingent on real growth was introduced to preserve the purchasing power of low-income civil servants.
- Targeted support schemes were introduced to protect the poor from the abolition of selected universal transfers and subsidies (including housing and energy); disability benefits were increased for the poor disabled people.
- A support scheme was introduced to provide temporary relief on mortgage payments for unemployed people and families facing significant increases in payments (either due to income loss or increase in loan payments on foreign-exchange denominated loans).
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Iceland
- Under the IMF-supported program, which ended in 2011, the 2010 and 2011 budgets—while entailing expenditure cuts in some areas—added new programs to deal with specific issues (for example, youth unemployment and overly indebted households).
- Engagement with social partners and consensus building facilitated agreements on key budget issues, including a framework for household debt workouts and the tripartite stability pact, which entailed a substantial increase in social benefits.
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Ireland
- Ireland developed a strong system of social supports in recent decades, helping cushion the impact of the severe economic slump during 2008-10.
- The EU-IMF supported program began in late 2010. The program deliberately spreads the needed fiscal adjustment over 5 years
(2011-15) to protect the fragile recovery and help contain the dramatic rise in unemployment. Moreover, the program has accommodated the authorities’ four-year Jobs Initiative (introduced May 2011, the 2012 and 2013 Action Plan for Jobs, and the medium-term infrastructure stimulus plan, as renewed job creation is critical. The Fund also supported the Pathways to Work initiative to reform activation and training of the unemployed, especially long-term unemployed, to ensure that they acquire relevant skills and remain in the labor market.
- Given the large pre-crisis increase in public spending and reduction in core taxes, some reversal of these policies is required to return public finances to a sustainable position. However, the choice of spending adjustments and tax increases is made by the Irish government, consistent with its social priorities, to enable strong ownership of the program.
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Kosovo
- The IMF-supported program provides fiscal space for pension reform, currently under discussion in the Parliament, aiming to increase basic pensions from current very low levels.
- The program also grants fiscal space for an ambitious health reform aiming at expanding coverage and improving the quality of health services.
- The program also allows for social assistance programs, currently in place: (i) cash benefits for targeted income groups and (ii) subsidized minimum consumption of electricity for families under the social assistance scheme.
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Latvia
- Under the IMF-supported program, which ended in 2011, the government implemented a comprehensive strategy to improve the social safety net at an estimated cost of 0.5 percent of GDP.
- The guaranteed minimum income, allocated to families, was increased by 8 percent for adults and by 22 percent for children. Families whose income is below the subsistence level are eligible for cash transfers equal to the difference between the sum of the subsistence levels and the actual family income.
- Health copayments were abolished for poor people.
- Increased funds were made available for emergency housing support for low-income households.
- The IMF also encouraged the government to implement an emergency public works program, financed by the European Social Fund, to give jobs to people who wanted to work but were unable to find employment.
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Portugal
- Portugal is implementing a very large fiscal adjustment program, which undoubtedly requires sacrifices from all Portuguese people. Reforms to underpin the adjustment are necessary in many different areas, including taxation and social and health sectors. However, the most vulnerable groups are, to the extent possible, being protected.
- For instance, to minimize the impact of the pension and public sector wage cuts on the most vulnerable groups, thresholds were used to protect the lowest earners.
- Cuts in social benefits are being implemented through additional mean-testing so as to enhance targeting.
- In the health sector, an area where reform was unavoidable, co-payments were increased overall, but the exemption threshold was increased to protect the poor.
- On the revenue side, tax increases have also, whenever possible, been applied while shielding vulnerable households. For example, the VAT rate increases have so far not concerned the high necessity goods, which have remained taxed at the lowest rate. A "social tariff" was adopted to protect poor households from the full impact of the transport tariff increases.
- Active labor market policies are also being implemented to reduce the impact of the recession on employment of vulnerable groups.
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Romania
- The IMF-supported programs have sought to limit the impact on the most vulnerable.
- Funds were earmarked for the guaranteed minimum income scheme. The lowest paid employees and poorest pensioners were protected from wage cuts, and the minimum pension and public wage thresholds were left unchanged. In 2012, the minimum wage was increased broadly in line with inflation.
- Future increases in gas and electricity prices will be phased in for households, and social protection mechanisms will be improved for the most vulnerable. To date, gas price increases have been limited to non-households.
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Ukraine
- Under the IMF-supported program, the threshold for maximum utility costs as a percent of income for working families was lowered, starting in 2011, from 20 to 15 percent, and from 15 to 10 percent for pensioners. Amounts above this are covered by the state budget. This is expected to protect some 800,000 households (about 5 percent of all households).
- The government continues to review existing social programs, in consultation with the World Bank, with a view to improve their targeting and effectiveness. This should help make more resources available to protect more poor families.
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| Latin America and Caribbean Click on the country for more information |
Haiti
- To preserve and boost social spending, the IMF-supported program monitors a floor target on poverty reducing expenditures, which consist of domestically-financed spending on health, education and agriculture. This has enabled social spending to rise to 0.3 percent of GDP by May 2012, up from 0.1 percent of GDP at the inception of the program in 2010.
- The IMF is supporting other steps taken recently in the context of the program, including (i) the launching of a comprehensive free and compulsory education program to bring all children aged 6 to 12 to school for free over a period of four years (about 25 percent each year); (ii) a conditional cash transfer program in favor of women in very poor neighborhoods in the Port-au-Prince area; and (iii) a food production and distribution program in poor neighborhoods to alleviate the impact of natural risks and promote agricultural projects as well as food distribution.
- Looking forward, with an extensive presence of NGOs in the country, and many initiatives to tackle poverty undertaken on an ad hoc basis, the authorities are encouraged to work closely with all stakeholders to develop a coherent and comprehensive framework to better target social spending, and ensure the efficiency of pro-poor spending.
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Nicaragua
- Despite the need for fiscal consolidation to reduce high public debt, pro-poor spending was protected under the 2007–11 IMF-supported program. The program safeguarded social spending and set minimum floors for pro-poor expenditures, which increased by about 12 percent over the program period, ending at about 13 percent of GDP in 2011.
- The program accommodated spending increases in priority areas (including, food security, education, health, and water and sanitation) as listed in the authorities own Poverty Reduction Strategy paper. In particular, following the economic downturn in 2009, the authorities increased spending on key social safety net programs to more than 8 percent in real terms in 2010 (2.8 percent of GDP or US$175 million). They also granted large increases in pensions and health benefits during the same year.
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St. Kitts and Nevis
Under the IMF-supported program, the government’s social protection policy is centered on sharpening the focus and the coherence of the poverty reduction initiatives to better support the neediest. It is consolidating the cash transfer programs and developing the supporting legislative framework which will include a means test to determine households’ eligibility.
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| Middle East and Central Asia Click on the country for more information |
Afghanistan
- The IMF-supported program establishes a macroeconomic framework that promotes inclusive growth, human development, and economic stability as foreign troops withdraw from Afghanistan.
- It establishes a floor on social and pro-poor spending, which is identified in the budget in accordance with the country’s poverty reduction strategy and a poverty profile developed by the government of Afghanistan. The floor is set at $400 million for FY2012/13.
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Armenia
- Under the IMF-supported program, social spending increased from 5.8 percent of GDP in 2008 to 6.6 percent of GDP in 2011.
- Looking ahead, the program aims to protect social spending while at the same time improving the targeting of social safety nets so more benefits can be offered to eligible families.
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Djibouti
- Despite the need for fiscal consolidation, measures were introduced under the IMF-supported program, completed in May 2012, to safeguard and better target social spending. This included an indicative target for social spending (about 6 percent of GDP in 2011).
- The health and education ministries were exempted from the hiring freeze envisaged under the program, and the lowest wages in the civil service were increased.
- Subsidies of kerosene, consumed by the most vulnerable groups, were maintained despite fiscal consolidation.
- Taxes on certain basic food imports were eliminated in 2008.
- The IMF provided technical assistance to the ministry of finance to design a diesel subsidy reform program aimed at phasing out the universal price subsidy and better targeting vulnerable groups.
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Georgia
- Under the IMF-supported program, social spending increased by 13 percent in real terms in 2009-10 (relative to 2008).
- Much of the increase in social spending went initially to provide assistance to internally displaced persons from the 2008 conflict with Russia, and to broad-based, quick disbursing programs, such as an increase in basic pensions.
- Even with the gradual phasing out of these initial social support measures, overall social spending was more than 4 percent higher in real terms at the end of the program (in 2011) than it was in 2008.
- The highest increases in real terms over the whole period were for spending on health programs (27 percent) and education (13 percent).
- In 2011, during the last year of the program, the government also provided food and electricity vouchers to alleviate the impact of rising food and energy prices.
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Iraq
- The IMF-supported program has helped preserve social spending on education and the public distribution system, which provides basic staples to every Iraqi household. Education spending in 2012 is projected to increase by about 50 percent compared to the 2011 budget.
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Kyrgyz Republic
- Under the IMF-supported program, the Kyrgyz government raised pensions in 2011 and 2012, which brought the average pension to about 100 percent of the minimum subsistence income.
- An increase in wages for teachers and doctors, introduced in June 2011, helped raise spending on education and healthcare by more than 0.7 percent of GDP in 2012.
- The IMF-supported program establishes a floor for targeted social assistance programs. The IMF is also working with the World Bank to develop policy recommendations to increase the share of social spending allocated to low-income and vulnerable segments of the population and improve the targeting of such spending.
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Mauritania
- To preserve social spending, the IMF-supported program sets a floor target for pro-poor expenditures, which increased by 10 percent in real terms over 2010–11 to about 31 percent of total spending.
- The IMF has helped the government design a temporary emergency program aimed at mitigating the effects of high food commodity prices and drought on the most vulnerable. Key emergency measures include the replenishment of food stocks in rural areas, free food distribution, and subsidized livestock fodder.
- Under the IMF-supported program, ill-targeted and costly energy subsidies are being replaced by well-targeted social safety nets. Key reform elements, such as the introduction of a fuel price smoothing mechanism and a new electricity tariff grid that preserves lifeline tariffs for the poor, are accompanied by a new social protection strategy and an expansion of existing cash transfer schemes.
- Part of the savings generated by the ongoing subsidy reform will be used to scale up existing targeted safety nets such as conditional cash transfer schemes and school meal programs. These efforts will benefit from the results of the ongoing poverty survey aimed at identifying the neediest population.
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Pakistan
- Strengthening the social safety net was a key priority under the IMF-supported program that expired at the end of September 2011.
- Targeted cash transfers in 2009/10 were significantly higher than in 2008/09, having more than doubled from 0.8 percent to 1.8 percent of total spending.
- The government also provided one-time cash transfers to households affected by the July 2010 floods in an amount totaling 0.1 percent of GDP at the federal and provincial levels.
- In September 2010, the IMF provided $451 million (0.2 percent of GDP) in emergency assistance to help those affected by the floods, especially the poor and the vulnerable groups in need of food, shelter, and medical assistance.
- In 2011/12, cash transfers rose sharply compared to the year before, and the 2012/13 budget envisages a 22 percent nominal increase in targeted cash transfers.
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Sudan
- A key pillar of the staff-monitored program that expired at the end of 2010 was to shield the poor from the impact of the recession. As such, social transfers were maintained in 2009–10.
- Social transfers were also preserved in 2011 despite the need for significant budget cuts following the secession of South Sudan and the subsequent loss of about 75 percent of oil production.
- In January 2011, the government raised the price of some fuel products and sugar and introduced social safety measures to mitigate the negative welfare impact of such price increases on households. These include an across-the-board increase in civil servants’ and pensioners’ wages and a commitment to provide targeted support to poor families and students, further transfers to the health insurance programs, and additional resources for agriculture and industry development funds.
- In July 2012, the government implemented further increases in the price of selected fuel products. To reduce the impact of these price increases on the population, the authorities increased expenditure on untargeted social benefits by about US$95 million, more than doubling the initial budget allocation; granted an increase of about US$27 in the monthly salary and pension of civil servants (equivalent to 40 percent of the minimum salary); and lowered custom duties on the main staples, and exempted medicines.
- The IMF is also urging the government to ensure that the increase in capital spending in the 2012 budget be directed to key social and economic infrastructure, such as health, education, training, and access to safe water.
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Tajikistan
- Under the IMF-supported program, the government increased social spending from 7.3 percent of GDP in 2008 to about 9.7 percent of GDP in 2011, and intends to increase it further to 10 percent of GDP in 2012.
- The increase in social spending over 2009–11 fell partly on transfers to households to help them deal with the decline in disposable income on account of a dramatic decline in remittances inflows during the global crisis.
- The government is working with the World Bank on developing a targeted cash transfer system to protect the most vulnerable segments of the population, and has also committed to reforming the agriculture sector with a view to creating employment opportunities and raising farmers' income potential.
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Yemen
- One of the key pillars of the IMF-supported program is fiscal adjustment to create fiscal space for higher social and capital spending.
- In collaboration with the World Bank, the coverage of a cash transfer program was expanded in February 2011 to include an additional 500,000 of the most vulnerable families (bringing total number of recipient families to 1,500,000) to partially offset the impact of the lifting the fuel subsides.
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