Poverty and Social Impact Assessment
Social policy issues Social protection seeks to ensure that socially vulnerable groups’ access to basic goods and services is not constrained by low incomes. Actual and potential reforms in the communal services sector envisage higher tariffs—possibly making these services less accessible to low income households. Additional financial support could therefore be needed for low income households. OECD recommendations326 indicate that social policy measures applied to communal services should: •
Ensure equal access to water;
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Support access by the most needy;
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Encourage water conservation;
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Provide social assistance that reflects the availability of budget funds;
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Be simple to administer and monitor; and
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Avoid negative side effects.
Social protection and communal services Policies to make communal services more affordable for low-income households can either reduce communal service tariffs or increase incomes for poor households. The former can take the form of budget funding of service providers, or cross-subsidizing services provided to households at the expense of higher tariffs charged to other user groups (including via the introduction of lifeline
tariffs). The latter takes the form of social assistance targeted at low-income households. Cross-subsidies are present in virtually all communal services in Kyrgyzstan. Commercial and budget-funded organizations pay much higher tariffs than do households; for solid waste tariffs in Bishkek and Osh, this difference is an order of magnitude. Residents of single-family houses generally pay lower water and sewage tariffs than do urban apartment residents. Since the latter are generally poorer than the former, such crosssubsidies can have a regressive character.
Cross-subsidies are present in virtually all communal services in Kyrgyzstan Lifeline tariffs are not used for households in Kyrgyzstan. These require the accurate metering of consumption, and according to the Antimonopoly Agency, only 3-4 percent of households have water meters (8 percent in Bishkek). While full metering and flat volumetric tariffs will be introduced under the Asian Development Bank’s IssykKul Sustainable Development project, lifeline tariffs are not anticipated, since tariff increases are to be gradual and are intended to keep the share of poor household incomes devoted to water and sanitation expenses below the 4-5 percent threshold.327 Installation of apartment and block meters should be encouraged to reduce water consumption in cities, given the stress on water resources.328 An investment of about 45 million som ($1 million) would be required for this.
326
Key Issues and Recommendations for Consumer Protection: Affordability, Social Protection, and Public Participation in Urban Water Sector Reform in Eastern Europe, Caucasus and Central Asia, OECD, 2003. – p.13
242
327 328
See Box 3. See 2nd Progress Report on MDGs.