Washington, 27 June 1997 (RFE/RL/) - World Bank Vice President Johannes Linn says the $800 million loan approved Wednesday for Russia will help raise the living standards of 15 million low-income Russians who collect pensions, unemployment benefits, and child allowances.
Under terms of the loan, in addition to paying off pension arrears, Russia will increase the minimum pension benefit by around eight percent by the end of the year. In addition, the loan will help keep unemployment benefits, child allowances and certain other social support payments current.
Most importantly, says Linn, the loan will underwrite Russian plans to completely revamp the entire social safety net system, from targeting social payments to the truly needy to devising a plan for turning the state pension plan into a three-tiered, combined public and private system.
Linn says social safety net reform is the critical next step in Russia's reform program. The loan is to be disbursed in three tranches, the final one scheduled for next year after the pension redesign plan is submitted to the Duma.