Pension Reform Falls Short of Expections

Date 2007/7/11 15:09:00 | Topic: Acts

Turkmen president Gurbanguly Berdymuhammedov has reinstated the pensions which were abolished by his predecessor and introduced a minimum payment. NBCentralAsia observers say he should have gone further and compensated people for pensions that went unpaid in the past.
The new welfare code which came into force on July 1 guarantees state pensions for all retired Turkmen citizens – which means over 57 for women and over 62 for men.

In January 2006, the late president Sapurmat Niazov stripped some 100,000 people of their pension rights, on the grounds that the national pension fund was short of cash. Those people will now have their rights restored.

The legislation introduces Turkmenistan’s first basic monthly pension of 300,000 manats, around 58 US dollars at the official exchange rate, for people those who have no verified work record, and a minimum pension of 500,000 manats, or 96 dollars.

Until now there has been no minimum pension, and the figure set for it is ten time the monthly average that has been paid up until now.

Pensions will also be paid to those who used to work in Soviet collective farms, as well as to the disabled, who were deprived of social security in 2002.

NBCentralAsia observers say that even though the government’s move has been welcomed by the public, many people had been expecting to get some compensation for the period when their pensions were annulled, given the effect this had on their lives.

According to Berdymuhammedov’s decree, the government is assigning pensions from July 1 when the social security code was officially published. Anything people feel they might be owed from before that date will not be recompensed.

“This shows that the current reforms are half-hearted and suggests that they will not be sustained,” said Tajigul Begmedova, head of the Turkmen Helsinki Foundation for Human Rights, an émigré group based in Bulgaria.

Vyacheslav Mamedov, leader of the Civil Democratic Union of Turkmenistan, another émigré group, says that the authorities still have a chance to gain a reputation for social responsibility by compensating people whose pensions were reduced or abolished in the past.

“The government must compensate for what it failed to pay pensioners,” said Mamedov. “Turkmenbashi’s [Niazov’s] ‘pension reform’ is a poor legacy for Berdymuhammedov, and he needs to solve the problem for the sake of the new government’s image,” said Mamedov.

However, an NBCentralAsia expert on Turkmenistan’s economy says the pension fund may still be in trouble, so the government may have to divert funds from the national budget to pay for the increase.

Although Turkmenistan earns significant revenues from oil and gas exports, the government’s budget income is diminishing, and consequently its social spending is tight.

However, the expert believes the government may now be using some of the oil and gas revenue to fund the pension reinstatement and increase.

(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)


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