Document of

The World Bank

FOR OmCLAL USE ONLY

Report No. 11209-RU

STAFF APPRAISAL REPORT

RUSSIA

EMPLOYMENT SERVICES AND SOCIAL PROTECTION PROJECT

OCTOBER 28, 1992

MICROFICHE COPY

Report No.:11209-RU Type: (SAR)Title: EMPLOYMENT SERVICES AND SOCIALAuthor: T. KINGExt.:33006 Room:H3-164 Dept.:EC3HR

Country Department IIIHuman Resources Development DivisionEurope and Central Asia Region

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EOUIVALENTSCurrency Unit - Ruble (Rb)

EXCHANGE RATE: RUBLES PER S

Pysgid Official Rate Auction/MIFCE Rate(Average) (Average)

1987 0.6328 n.a.1988 0.6080 n.a.1989 0.6274 8.91990 0.5856 18.81991 0.5819 59.0

(End of Period) (End of Period)

Dec. 1991 0.5571 169.2Jan. 1992 n.a. 230.0FeL. 1992 n.a. 139.0March 1992 n.a. 160.3April 1992 n.a. 143.6May 1992 n.a. 113.0June 1992 n.a. 144.0July 1992 n.a. 161.2August 1992 n.a. 205.0September 1992 n.a. 254.5October 6 1992 n.a. 342.0

WEIGHTS AND MEASURES

International System of Units (SI, "Metric System")

ABBREVIATIONS AND ACRONYMS

ERT - Early Response TeamFES - Federal Employment ServiceMIS - Management Information SystemMSP - Ministry of Social ProtectionOECD - Organization for Economic Cooperation and DevelopmentPCU - Project Coordinating UnitPPF - Project Preparation FacilityRFEC - Russian Federation Employment CommitteeSWO - Social Welfare OfficesTCP - Technical Cooperation Program

RUSSIAN FISCAL YEAR

January 1 to December 31

FOR OFICL USE ONLY

VIA

RuePOn=N SURVcKs AnD SCIAL LaOTCTO PRGINO

Table pf oantents

1I. S3CTOURbL BACSCROCWD .................................................... 2the Labor Market....................................DUployment Services .................................... ........... 4Traing.. ..................... * ............................... 6Pensions and Other Cash Benefits ....................................8Bank's Role and Strategy .................................. .... 10Donor Coordination..........................10

III. L38QOs VROQM IZZEuT UZP3RIUCS ........................................11Umploymnt services in Industrial Countries........................1.Lessons from Bank Bxperlence. ...................... a................ 14

Project tationale and Objective. ....................... .. ........... 15

Rationale for Bank Financing -................. ......... -.... -15

Project objctives ..... ... ........................ 15Project Bvolution ..... a................. ... ....... .. .. ... *i.S

Project Description ................................................17Detail leatured. .................. . -. 18

troject Coordination unit ...................................... lSStaff Training Unit .............................................. l-Dellvery of Unemployment Benefits and DEployment rves ........ 18Labor Market Policies and Management systems ..................... *19zram &ervLces ..................

Labor Market Information Syste ............................. 21

This report iL based on the findLigs of an appraisal misiLon thatvisited Russia September 6-15, 1992 comprLsLng Timothy KLng (MisLionLeader), Lynette Wardle (Operations Officer), Robert Hall and AnnaStasxewlcz (Consultants) and was assisted by Tanya Proskuryakova andDditry Petrin of the BDank" Moscow Office. in addition to the staff andconoultants mentioned above who participated ln appraisal, Donnaudgerton and Rifky Taher (Consultants) assisted ia preparation LsLsions.go Dahlborg (Training SpecialLt) participated ln the preappraLialmssLion from May 19-June 15. JonL Elugman (roung Professional) andEalinl SrLnLvas (Operations Asesitant) havo contributed to the writingof this Report. Msesrs. Russell Cheetham and Robert Liebenthal aro theresponsLble Director and Division Chief, respectLvely.

This document has a rised ds budoa and may be used by d t onl la tho pefo,ma,of tahr offici dues. Its contlets my ot otpwte be dioseo withot WOW Bank authol. on.

2. oont cont-d.I

Bmpoymnk r llag...................... 2Minitry of Social Protection (UN) ................................ 23Design of a Hodern Social Securlty Systm .......................... 23

V. PRo3C? C0Sm, IWaNCi NA M AunYms r aND lFMUTiATZO24..............24cost of the Profect................................ 24sumarry of ProJect Co6ts........................................24

Bal. of Cost stimt ............................................2SCustam DutLes and axes ...........................................2SContingency al.o. .............................. ........ .25Foroign xahang Cmonent ............ 25Project t?iancing ..................................................26Management and rmpl.ementation.. ................ 0026

aanagement ....... . 26Management Functions.. 2.....................2

Status of Prparto .............................................. 32L .bur.At. ............. o 33Accounts and Audits .............

VI?. A3333!S8 AND ........... .............. 34

Aemental t ............ 3V22* AORNMOM" MM ~ ~ ~ ~ ~ CO.., 0.0..3

1ii

1. Employment by sector and gender2. Education levlsi of workforce3. Description of the System of Unemployment and Related Benefits

(including revenues and expenditures of the Employmnt Fund)4. Detailed Cost Bstimates5. Computerization6. Project Coordination Unit7. Project OperatiOns schedule ande ark

1. tederal Employment Service2. Ministry of social Protection3. Staffing Requirements

Documents id Dat2a Avalable in the Project File

1. Action Program - Employment Policies and Programs, May 1992,Robert . Hall

2. St.ngthening the Bmploymnt Comitte n t System,May 1992, Willim S. Leisb

3. Design of a Mass Rdundancy Respons System, May 1992, WilLiam Sswitt4. Computerization Assesment and Recosmendations for the Employmnt

Serices of the Russian Federation, May 1992, Donna Edgerton5. Russias The System of Cash Denefits, May 1992, Nicholas arr6. Traiing Reconnaissance Report, June 1992, Richard Johanson,

Claudio de loura Castro, Milan Rubr7. Public Services Employment Programs - design for a stand-by public

works for peiods of massive unemployment, May 1992, Robert T. H311.

Uorrosuer Russia

ftletciaziAs: fedeal a loymet ServieiniLtry of Social Protection

mounts U8$70.0 milLion

T!em Repayment in flfteen years, including five years of grace,at tho SRD standard variable interest rate.

ftojwtObjectives The p$ricLpal objective of this project, which is to be

imlemented between February 1993 and October 1994, is toquicLkly devlop the capacity of the 13S to process theantLicpated upsurge of benefit claims frm the rapalygrowing numbers of unemployed following economicrestructurLng and privatization. It is also aimid atdeveloping the capacity of the 88 to cay out activeemployment policies, including retraLning, at assisting the351 deelop improve penions administrationg to refom thepenLon system and comence the design of a odern socialsecurity system. Indee ths project will provide theframework for successor projects in the areas of employmentservies, social protection and training.

ProjectDescription The loan would finance equpment and technical assistances

(a) to rapldly improve the lu's capaclty to regiter andpay befits to the uneployed, and to introduce comutersystems, policies, standards and related softwarel

(b) to bulld the longer term capacLty of the FU and the

(i) for the Ms to design programs, enablngmechanism and monitorLag methods for the pvemtof labor mrket polLcies and nt system tosengthen progam services, including modelemloymnt offiees and progrum to del wLth mess lay-offs, and standby public srvice/end or temporaryemployment pograms to develop systms for monitoringlabor markets and poverty levlap to strength 'efforts to organize job training for the unemployed inthe new skills require by a markt oomy and in thepreparation of curricula and training materials

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(11) for the 51Ps to improve the opeational*ffectiveness of the NIP and, as an importantprepaatory pha" to a plannd 1994 project, developand test the autoation of cash benfit delivery oa aPilot baSIS in selcted regions and in the degign ofbenofits prgram and

(iLL) to lnltiate the design of a modern socialsecurity schme and the devlopmet of a master planfor the differet agencLes involved wlth erWloymentservLces, cash beneflts and social assistance,together with rec nation for phasing and adetaLled design for the next phase.

basLk. lly providin the necessary equipment ad training and bystrengtheni the managemnt of the INS, the project wouldhelp create the capacity to provide timely support for theanticipated Lare numbers of unmployed in the short-tem,and in the longer-tem would assist devlopmnt of a modernwide range of labor arket pollcies supporting therestructuring of RusSia's economy, and a computerized socLalsecurLty sstem.

3JE,3 S The main riLk is that the project timetable, whleh isambitious, will be delayed. This risk is partiallymitigated by the trong t_ t of the nS and W5Ppersonnel involved, and by the politLcal and socLal pessureon the employment srvices that may be expected asunemployment grows. Xn any case, the urgency of the needdoes not permLt a more relaxed timetable. A second risk isthat organizational changs may weaken effetiveness orreduce receptivlty to foreLgn advice. This rilk isacceptable since the 13 has recently been glven anindependent mandate and clear authorLty to acceleratedecision-makng. a third rlsk is that local authoritLeswill proceed so ind pndently of the central 1W d M1Pthat the adoption of the project's im ro vmnts w11 notproceed. Thio risk will be addressd by emphaslsing localconsltation (efforts to date to involve local officesinitiated throb bilatea donors and continued nr the111 ar alredy paying dividends) and staff traLning, whichWill be under the project. Ioreover, localoffices will be requird to meet criterLa, still to bedetermined, to be eligible to rceive comput es adequLpment.

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Estim:atedl Project Costs:

------- U$ milln---1. Project Coordination Unlt 15.0 1.4 16.42. Staff Training 9.6 0.5 10.13. s iteft and Service Delivery 5.5 38.8 44e34. Labor Market Management 0.7 0.7S. Pr0ram Services 6.1 6.16. Labor Market InformatLon ystye 1.7 1.77. laployment Traing 1.7 8.8 10.58. Long-texm Design 0.6 0.69. Salaries 33.3 33.310. 11P Pilot 7.1 7.111. Refinancing PF? 1.5 1.S

Total Base Cost LI7 L.2 1J32.1PbysLcal Contingencoss - - -Price Contingencies 0.1 0.6 0.7

Total Project cost ALA 133,

linancina PRMS

-- nUS$ mlilln -o--Government 63.0 - 63.0Bank 2.2 67.8 70.0

Total FLancing Plan Ala AA0

-stimted DiAburpenatsDa i Year

M93 FY94 FY95-- us$ Millions--

AnnaI 20.0 40.0 10.0CUulative 20.0 60.0 70.0

ZEon_cic Rate of Rleturns Not Applicable

1Mw NIWD 24013

EMPOYIMETSVCS ANED SOTLPUM?CflN RO9

z. I ncrTozm

1.1 The Soviet economic system was extremely inefficient. Both thestructure of output and techniques of production reflected a great waste ofresources. Nevertheles the economy exhibited one positive features most ofthe population shared a sense of economic security and lnvoluntaryunemployment was virtually unknown. Most individuals had security both ofincome and of access to basic social services.

1.2 The adjustment process has crated high inflation and serious anxietyfor millions of people. Many cammoditLe now cost twenty to thirty times whatthey did two years ago, and real incomes have fallen sharply. Althoughinvoluntary unemployment has not yet appeared on a significant scale, manypeople are no longer receiving their contractual salaries, and must be veryworried indeed about th41r future. Fear of unemployment is widespread.Without some reassurance that adjustment and reform are not going to involvepersonal destitution, public support for present economlc policies maydisappear.

1.3 Economic adjustment will require a temporary decline in output thatleads to some relative deprivation and personal hardshLp problem.. it iswidely agreed that governments have a responsibility to provide some sort of"safety net" to prevent the emergence of the most serious problems of poverty.Many individuals -- pensioner., the unemployed, and others - need aneffective system of cash benefits which will provide a minimal real income.Essential social services have to be preserved, particularly in cities. Whilethe need for social protection in RuLsia is particularly acute at the presentt,ime, the provision of a safety net entails more than anti-poverty measuresalone. systems of social security and other public services that arecompatible with efficient employment and production systems have becomeintegral and permanent features of all OE¢D economies. Such system normallyinclude: (a) income support measures for those who would othrwise have lessthan acceptable living standards, based on eligLbillty for various cashbenefite (b) proactiv employment services; and (c) unlversal access to basLchealth and education servicso. All of thes measures are justified ln termof efficiency as well as equity. A cash benefit system and adequate publicsocial services can liberate labor maket policies from the need to embodysocLal distributional as well as effLelncy objectives. Proactive employmentservices can lead to a more effLcient reallocation of labor and a reduction oftime lost ln unemployment and, by the Lnclusion of retraining, can help toimprove the human capital stock on which living standards largely depend. AstriLt distinction between a welfare-oriented safety net *nd effLeLency-enhancing labor market reform and human resource development li thereforlargely artificial.

1.4 In the next few years, the World Bank expects.to provide Russia wlthboth financial and technical assistance for the development of social

2

protection in a modern market economy. The present project is the first of aseries planned to establish a modern social security system, to reform and toimprove health services, and to support national training efforts to upgradethe human capital base. The proposed project concentrates on the weakest linkln the safety net, the employment servLces, which must be bullt up almost fromscratch as quLckly as possible. The project will improve the ablilty of theemployment servlies to provide job seekers wlth accurate job placement andcounselLng, opportunities for further trainlng and, as a last resort, publicservice employment. The project supports the development of curricula andmaterials that are needed for training of the unemployed, but whlch can be ofbroad applicatLon for the general modornizatLon of traLning. ThLi is anessential preparatory phase for a stand-alone training project which isenvisaged to follow in FY94. Employment servLies need also to be buttressedby complementary programs for social protectLon, and the project containsassLitance for the design of the other elements of a social security system.

II. S ORAL BACXGROND

The Labor Market

2.1 The population of worklng age, deflned ln Russia as men aged 15 to 59and women aged 15 to 54, was 84.2 million in 1991. In 1989, the most recentyear for which the relevant data are available, the participation rate forwomen of workLng age was B4.3%, which is very high by international standards,and 87.6% for men. At the same time 23.7% of men aged over 60 and 16% ofwomen aged over 55 worked, reflectLng a system in which those above retirementage have been encouraged to continue in the work force without loss ofpension. Russia is hlghly urbanized, with 74% of the population resident lncities, although urbanization has bean slowing downs ln 1989 only 8 ruraldietricts recorded posLtive net mlgration; in 1990 there were 20; andreportedly in 1992 there has been on average a positive net mlgration to ruralareas. There exist serious constraints to labor market mobility, andtherefore to effectively functioning labor markets. Geographical mobility oflabor has been hampered by the scarcity of housing and the absence of anythingthat resembles a normal housing market, and also by a system of residencepermits that has deterred internal migration. in recent years otherdimensions of structural change have also been slow. In 1990, 30.9% ofemployment was provided by industry, 13.1% by agrLculture, and 56% inconstruction, transport and services (Annex 1). These proportions had changedvery little during the preceding decade. The state-owned sector is by far thelargest employer, accounting for 77% of total mploymaent (56.8 mllion peopleworked at state enterprlses in 1991), although its share has been falling (in1985 the stato provided 90% of employment).

2.2 The labor force is characterized by high levels of education, wlth fewdLfferences by gender. Literacy rates are close to 100% and rates ofsecondary school completion exceed those ln the U.S. About 15% of adults havehLgher educatLon, and fewer than 30% have less than a complete secondaryschooling (Annex 2). As noted below, Russia also possesses a very largenetwork of training instLtutLons at all levels. Combined wlth the hlgh levelsof investment that characterLsed the Soviet economy, the potential for high

3

levels of labor productivity and livlng standards was considerable.Inefficiencies in the labor market were one reason why this was not achieved.

2.3 In the Soviet labor market, as in others, most individuals were free toseek new employment in response to alternative opportunities, although untilvery recently unemployment was in principle illegal. Turnover rates were notvery different from those in OZCD economies -- higher than Japan or France,but well below those in the US. But turnover very often did not reflect themovement of labor to more productive uses. Managers had little leeway tomanipulate wages or bonuses in response to a need to attract labor, and hadlittle incentive to reduce staff even if this could be done without reducingoutput. MaintaLning extra labor was deslrable to be able to maximize grossoutput at peak plan p.riode; if labor was released, it mlght not be feasibleto attract lt again. Once the wage fund was reduced, lt might not readily berestored. S rational managers hoarded labor, overstafflng was widespread,and an excess demand for labor was pervasive. A ocmmon estimate li thatoverstaffLng averaged 20-25% of the labor force in state enterprises.Attempts at enterprlse reform during the eerestrgik perlod (1986-90),deslgned to make enterprlses more cost-conscious and profit-minded, failed toinduce indivldual managers to pursue the search for cost-saving methods to theextent of laying off workers.

2.4 The amount of redundant labor must have Lncreased dramatlcally recently,slnce the decline ln industrial output of nearly 20% sLnce 1990 has not beenmatched by any signlflcant release of labor. An increase in the level ofunemployment is therefore not only inevitable but necestary if economlc reformis to achleve its objective of systemic and structural change. While thisfact is well understood by leading Government economists, there is also anunderstandable polLtical reluctance to see large-scale unemployment emerge,and recent credlt infusions have kept unprofitable enterprises from closing oreven reducing staffs. ThLs may also partly reflect an appreciation of howill-equLpped Russia is to cope with large-scale unemployment.

2.5 The experience wlth economlc reform ln several countrles of EasternEurope has also been that unemployment wa slower to emerge than reformersexpected. Once it emerqed, however, unemployment grew quickly and became verysevere. In Bulgaria, for example, unemployment whlch was negligble in May1990, had reached 6% of the labor force a year later and 12% by January 1992.There are already many indications that the RussLan situation could changerapldly, including much anecdotal evLdence of an emerging unemployment problemthat is not yet reflected in unemployment registration; that new graduatesfrom educational institutions are having difficulties ln findlng employment;and that many firms are retaining employees without paying them. There areseveral projections that unemployment in Russia will reach between two andfour million by the end of 1992 and is likely to rise to over 10 mlllonduring 1993. It is quite possible that unemployment will reach levels of over20% before falllng again.

2.6 One of the striking features of the limLted unemployment which has sofar appeared is the hlgh educational level of the unemployed. Thlrty percentof those registered as unemployed in January 1992 had hlgher education,compared with 15% in the labor force as a whole, and the proportion of the

4

unmployed with secondary vocational quallfications was also above the laborforce average. When unemployment becomes driven by plant closures, lt isexpected to be relatively concentrated in heavy lndustry and the defenceindustries, and a higher proportion of blue collar workers will becomeunemployed than at preset. But compared wlth other countries, theeducational levels are still likely to be high. ugineers Ln parbtoular arelikely to be in surplus -- this war a dangbr even under the previous economicsystem. It is therefore necesary for the retraining program to includecoures suitable for highly educated workers as well as for those with mnualskills.

2.7 During the ggEugtrkka period, lt began to be recognized that if thelabor market was to function more efficiently there had to be at leastfrlctional unemployment. In 1991 a new (Soviet) Zmployment Law made itpossible to registor as unemployed, and to receive unemployment benefit for alimited period. These benefits were related to previous earnings. (Annex 3describes the unemployment benefit system.) An Umployment Fund, financed by a1i payroll tax, was established to pay not only unemployment benefits but alsoall other coots of operating an employment service. These arrangements becampart of the law of the Russian Federation. Responsibility for employmentservices became the responsibility of the Zmployment Committee, which was partof the Ministry of Labor. In June 1992, the link with the MinLstry of Laborwas severed, and th Federal Imployment Service (FES) was established, andsubsequently enlarged (Chart 1).

2.8 The FS8 is responsible for providing overall leadership, policydirection, and management of the nation-wide system of employment offices andprograms, primarlly through oblast Umlovment Officge 2 . Its functionsinclude planning and budgeting the nation-wide programs, managing thebiployment Fund, establishing goals, objectives and performance standards withregional offices, developing program designs and procedures, and providingoversight of some 88 oblast Imployment Service organizations and 2,121 raiyonemployment centers and bureaux. The oblast employmnt offices are responsible

2 For the purposes of this report, "gblast refers to "oblast-level*author4t ie, which include kral, autonomous republics, and the municipalitiesof Moscow and St. Petersburg. For the purpose of administering both theUsployment Service and aleo penions admLnistration, this will also includesome subdivisional units, such as certain autonomous okruan, to bring thetotal number of this level units to 88 (rather than 73, as is used for somepurposes.) Sometlme this level gets translated as *territoriss." Thesecond level is described as raJyoI , though there is also some variation.Sometimes this gets translated as wregions. (Confusingly this term sometimesLa also used for some groupings of oblasts.) A distinction is sometimes madebetween cities and "rural raiyons". While it is dangerous to translateconstitutlonal analogies across boundaries, the reader should keep in mindthat the oblast is much more like a state or a province than it is like acounty. The phrase 'local authorities' normally refers to raiyon governments.

5

for muagLng employment programs and the ralyon offLces within theLradmiistrative jurisdLitLons, including planning and budgeting, and provldingguidance and leadership of raJyon offices and technical assLitance andoversight of theLr operatLons. The raiegn emolovajt offLe.s deliver theprograms mandated and authorised by the Bmployment Law directly to thecitLxens. Ratyon offices are the prLmary interface of the employment servlcesystem with the goneral pubIlc where the day-to-day operatLons of theemployment servLce occur {e.g., registration for work and benefits). Paymentof unemployment benefits is made through the Savings Dank, an organizationwhlch has oblast-level and raiyon-level offioce and some 41,000 branchoffices.

2.9 The IS has undergone two reorganisatLons over the past twelve months.Its capacity is clearly overstretched wlth 80 staff on board out of a total of125 authorized positions. Active staff recruitment is underway to add another100 posLtions for a total staffLng level of 225. Building on existLngprocedures, new management systems have begun to be developed over the pastmonths to streamline communications between headquarters and the o)ilasts,LncludLng a revLsed budget and planning systemi a formalized directivessystem; oversight proceduress and an lnitial Management Information System(MIS). These initiatives are being developed wlth Bank assiLtance, in thefLrst instance by funding under the Technical CooperatLon Program (TCP) andmore recently under a Project Preparation FacLlity (PP7).

2.10 Local capacity is inadequate to deal wlth large scale unemployment. Inthe Soviet period, employment offices (Job Placement Bureaux) only helped toput job-seekera and employers in touch with one anothar in an era whenuizmployment was unknown. Although thelr functLons are changLig, employmentoffLce remain thinly staffed, often short of offlca space, and almostentlrely devoid of computLng equipment. It is expected that the 14,600current staff positions in local offlces will be expanded to 22,000 by the endof the year. If by that time there are three million unemployed, this willcreate a ratio of one staff positLon for every 136 unemployed. (This compareswith 1 Ln 9 in Sweden in 1988, 1 in 33 in Austria and 1 in 98 in the U.K.)Most of the existing and new staff wlll lack suLtable preparation for the workrequireds consequently, the demand and need for staff training will beenormouk-.

2.11 Other handlcaps to effectlve service delivery are the result ofdeficiencies of existLng logislation, which the us8 has been trying to haveamended. rLrst, the current employment law requires complex calculatlons ofpast earnings in order to assess the approprlate level of unemploymentcompensation. With local services ln an embryonic form, this lsadministratLvely unfeasLble if there is a rapld expansion of unemployment.Proposed amendments to the Law would allow the temporary use of flat-ratebeneflts at two levels. The upper level would apply to applicants who havelost thelr jobs (as distinct from lower-level first-time or returning job-seekers) and only for six months. Second, employment services andunemployment compensation are financed by a 1% payroll tax, 90% of which isretained at the level of the oblast or below. This Li unsatisfactory, sincse(a) an extra-budgetary Fund whose revenues are inversely related to lts needfor expenditure Ls fundamentally flawed; (b) the revenues of the Fund are far

6

too low to meet the benefits for more than a small fraction of the expectednumbers of unemployed; (c) the Fund has no mechanism to shift resources fromoblasto with low levels of unemployment to those with high levels (d) thefinancing of retraining and other proactive employment policies needs to beseparated from the tinancing of unemployment compensation -- otherwise theseactivities are likely to be reduced just as the need increases; and (e)compliance by employers and local authorities with the provisions of the lawis far from satisfactory, further weakening the support that the FES canprovide to areas of high unemployment. These problem are acknowledged by theGovernment, but with the Employment Fund still in overall surplus, otherbudgetary problems are receiving greater attention. While it in not anobjective of this project to address the legislative and financial weaknessesof the system, they will continue to be addressed as part of the policydialogue with the Government, which has been intense and encouraging to date.

Training

2.12 The good level of general education in Russia is likely to prove thefoundation for its economic recovery and eventual rise to prosperity. In1990, about 12% of the Soviet population aged twenty or over was estimated tohave completed higher education, which was at or above the levels achieved byseveral countries of Western Europe. In addition to its general education,Russia also has a large and complex training system with a long traditiondating back over more than a hundred years. In recent decades, this systemhas provided pre-employment training to about two-thirds of each age cohortgraduating from the general education system. Those leaving school after onlynine years of general education have entered either the 4,300 vocationalschools operated by the Ministry of Education, which offer courses for skilledor specialized workers of two to three years' duration, or the 2,600 technicalsecondary schools, usually operated by sectoral ministries and offering twoyears of secondary-level plus two years of post-secondary technical education.(school leavers who have completed the full course of ten or eleven years ofgeneral education can enter directly the two-year post-secondary course.)

2 13 Once employed, workers have been provided with in-service training atall levels, from operative jobs to positions requiring postgraduatequalifications, much of it of an ideological nature. For lower levels,training has been provided through courses operated by "Training Combinate"tied to state enterprises. In addition, a large amount of further training(at least if measured in nominal course hours) has been given to people whoalready hold a degree or diploma from a higher educational institution.Middle and higher level staff have received in-service training through about100 sectoral *Institutes for Upgrading and Qualification* which have beenoperated mainly by the sector ministries. Although higher level managementtraining was offered by a small number of intersectoral training institutions,most of what was described as *management training" focussed narrowly onproduction processes. By 1985, the system was training annually some 1.4million managers and technical personnel; the results of this training interms of efficiency and productivity are difficult to assess.

2 14 Both higher education and the training system have suffered fromexcessive specialization, oriented to industrial needs. The higher education

7

system has been dominated by engineering; 300 of the 520 institutions aredevoted to engineering, and two-thlrds of the 450,000 graduates are engineers.Vocational training courses are also very narrowly specialized; at one timethere were dlitinct training courses for,about 1,200 occupations, although anattempt is now beLng made to reduce this number drastically. Much more needsto be done both to consolidate industrial specialties and to broaden thespectrum of courses to provide more training in commercial and serviceoccupations. Demand for graduates with predominantly technical/industrialskills i expected to drop sharply, immediately as a result of thestabilization program, but also in the long run as a new pattern of outputemerges, which will leave many of the technical schools heavily underutilized.Many institutions have already begun to adapt to new opportunities; but formost schools to do this, they will require improved access to currentinformatLon on sk$ile that are likely to be needed, assistance in redesigningprogram and retraining staff, improved teachLng materlals and modernizedequipment. f such improvements can be adequately provided, then traininginstitutions with good potential can survive the transLtLon. The strongestemphasis neds to be placed on generic commercial and managerial skills neededin a market economy. Suitably modified, existing training capacity should beadequate to provide most of the retraining and upgrading of the workforcewhich will be needed as a consequence of the ongoLng restructuring. Priorityneeds to be given to the upgrading of existing institutions rather than theestablishment of new ones.

2.15 The limited amount of unemployment that has so far occurred has largelyinvolved white-collar workers. This trend is likely to change as workers inlarge enterprises begin to be laid off, but as heavy industrLes are veryvulnerable, and especlally those previously producing military products, thismeans that unemployment is likely to continue to hit those wlth a high degreeof specialized education, and particularly engineers. In the past, trainLnghas been largely driven by the skills needs of enterprises. Most vocationaland technical schools were very closely linked to specific enterprises. Inthe near future, however, lt is unlikely that lt will be possible to identifyimpending vacancies before the retraining of the unemployed can begin. Thedemand for labor wl11 not be at all buoyant. In many cases, such as theretraining of engineers in commercial skllls, the length of traLaLng neededwill be substantial. Such skills may be valuable in self-employment or invery small enterprises. As a consequence, emphasls should be placed ontraining in more generlc skills, such as electronics and process controltechnlques, quality control, customer servlce, commerclal and financialskills, computer skills and foreign languages. For some of these, such asaccountancy, there is already a very clear unmet demand. Training programsshould be designEd in a modular format, so that standardized tralnlng modulescan form the building blocks of different courses to meet the needs ofdifferent jobs and occupations. A system of modular certification could beprovLded in the form of a book to be issued to each trainee and a computerlzedrecord system could be used to fac$litate national certification. A separateentrepreneurship or self-employment support component is included in theproposed Privatization Project.

2.16 Recently a number of training institutions have been forced to switchfrom total government financing to total or partial self-financing, and have

a

beun charging enterprlse market prices for courses and started to modernizethoei progams. Some have exhibited considerable imagination and drive,surviving in dLfficult times by reduclng and restructuring staff, by offeringprograms in popular areas (marketing, computers, privatization, stock markets,commodity exchanges, etc.), and by renting space. On the negative side, thereare many instances where the courses are poorly designed, and taught byunqualified instructors. Nevertheless, on balance, this willingness to seekcommercial opportunities Li encouraging, and suggests that with assistance incourse design and wlth the supply of training materials and educationalequipment, substantial and cost-effective improvement could be achieved. Bysponsoring training on behalf of the unemployed through properly designedcontracts with existing Lnstitutions, the ES can stimulate the nationaltraining effort in that direction.

2.17 The proposed project would provide an important foundation for futurelending directed specifically at training. It would generate materials,currlcula and courses with positive externalities throughout the educationsystem. At the sam time, the proposed project would support training effortsfor a specific clientele: those either without a job, or at high risk ofbecoming unemployed. This would be complementary to the massive retrainingneeds in critical skill areas for the workforce at large, which were thesubject of the recent training pre-identification mission. Although thedevelopment of training programs for small business development is notspecifically included in this project, it is anticipated on a pilot basis in aforthcoming project in support of privatization.

Pensions and Other Cash Penefits

2.18 Under the Soviet system, pensioners were often the poorest people inociety. The myth of stable prices led to retirement pensions that remained

unchanged in nominal terms for decades. A reform of the system, which cameinto effect early in 1991, aligned minimum pensions to minimum wages, but alsorequired these to be indexed to prices. Changes in minimum pensions were tobe reflected at all pension levels, thus maintaining relativities. Pensionswere to be financed on a pay-as-you-go basis through a Pension Fund, whichwould derive its revenue from a payroll tax that would rise to a 31.6%employer contribution and a 1% worker contribution in 1992. This Fund hasbecome an independent entity whose Chairman reports to the Supreme Soviet.The Minitlry of SocLal ProtectLon (NSP) (Chart 2) has become responsible forthe payment of pensions and family benefits and also poverty relief. Russia'spension legislation also covers disability and survivors' benefits.

2.19 Procedures for calculating and paying benefits that may have beenadequate when pensions changed very little from year to year areunsatisfactory in present circumstances. The system relies heavily on manualrecord keeping and calculation of complicated benefits. Since workingpensioners accrue additional years of service and higher annual earnings whichrequires frequent recalculation of their pensions, the almost entirelyunautomated local pension offlies make 40 million pension calculations eachyear, excluding adjustments for price changes. The system has no ability to

9

identify the record of contributions (as opposed to work histories) made onbehalf of individuals.

2.20 The safety net needs to comprise more than categorical entitlementprograms. Even under the previous system, there were some individuals whomight be classified as the "workLig poor", such as members of families withmany children, female-headed households, and individuals who were temporarilywithout regular employmnt. We know of the existence of these individualsfrom a mall number of household surveys conducted by academic institutions,but there is little information on the numbers involved. The NSP togetherwith the Presidential Administration, administers a Fgnd for the SocialSu=oort of the Ponulation, largely financed with 10% of the proceeds frompr!vatization, and a one-time payment of Rb. 4.3 billion from the assets ofthe former Communist Party. The Fund operates in 40 territories, partlythrough the XSP, and the balance as part of the administration of thePresident of the Russian Federation. The Commission on Social Policv of theSuem SoviLet administers a somawhat similar fund. But most of the sourcesof support for the pcor are provided by local ouroes. As the economycontinues to decline, ther may be many local authorities that simply cannotcope with such demands. At present the Government lacks the ability to ensurethat the help it might provide can be promptly supplied or properly targeted.

2.21 The Government is well aware of the need for an improved safety net.Its policies are described in the social policies section of the recentlyapproved Xedium-Term Structural Reform program, and summarized in theMeorandum of Economic Policies accompanying the Rehabilitation Loan (P-5834-RU, July 22, 1992). With World Bank assistance, the Government is In theprocess of defining a realistic "subsistence minimum" that it intends todefend against inflation, and use as the basis for determining pensions, andunemployment benefits. (Minimum levels of these will be close to this line.)This work is very close to completion. It is also developing policies toprovide a more complete safety net for individuals, irrespective of theirentLtlement to categorical cash benefit programs, no matter where they live.While this obligatlon is recognized in principle, the modalities will taketime to establish, and this project includes some technical assistance foraccompllshing that task. The main elements of the design of a targeted systemare to be completed by the end of December 1992; full implementation is totake place before the end of 1993.

3 The actual payment of pensions is made directly ln cash by thepostman, or by the post office or through the Savings Bank. It should benoted that the wldely reported problems of pensioners not receiving theirpensions for several weeks or even months reflects a widespread physidcalshortage of cash in a country undergoing extremely rapid inflation, thatdemonetimed its lrger notes early in 1991, and that denied individualschecking accounts until recently. it has nothing directly to do with pension'administration.

10

ank'oa Role and 3trat.q

2.22 Fram the outset, the work under the Technical Cooperation Program (TCP)betwee Russia and the ak involved technical assistance ln deigLaLng andimlemnting a cohernt set of policies towards the social safety net, whichcontributed to the reno ai-os of the Structural Reform Program 4. Asdscribed In the Report of the President on the RehablILtation Loan,strengthehnig the soclal safety net to protect vulnerable groups during thereform process, assiting in labor force restructuring and developing thehuman resource skills and instLtutLonal capaelty needed to support a market-based economy are key medium-term objectives of the Bank. These objectivesare all served by this project.

2.23 Technical assistance to the DES, identLfied as a prlorlty, has been partof the TCP from lts outset. The preparation work done under the auspices ofthe TCP provides a sound basis for the proposed project. The project iedesigned to address the tfrst problem wLth the Government's strategy, theweakness of the PES. it is viewed as a necesary precursor of a morecauprehensive 5-year BRploymnt Servioes and Social Protection Project in

Y94. Therefore the current operation would be a very important step alongthe way to a reformed and offectlve system of soclal security needed for theoperation of a modern market economy. The proposed project, and itssuccessor, would assist the Govermenut to establish syotms and institutionswhich will not be dependent on continuing foreign assistance.

2.24 The legislative and fluanc al weaknesse of the system have beenhighlighted in the Country Econoic Mord and stresd as part of thepolLcy dLalogue with the Government, which has been intens and encouraging.A sector report arly in 1993 will pull together the main work carried out sofar, updated where appropriate with respect to some iesues that are not yetresolved. Issues of socLal expenditure, including employment servLces andother social protection, and the relative role of central and localgovernments and enterprim, will be emphasized. ThLs will provide anopportunlty for continuing our pollcy dialogue on these topics. The reportwill include analysis and recenmmendatLons for health sector fLnancing andreform catrLed out under the TCA, as a precursor to further sector work and aMS9SJ project on health. In addltlon, the work of an ongoLng mlssion on

training is expected to result ln a sector report, and to facilitate lending,eLther through a stand-alone project or as components of other projects.

pcnr= CoordLnatLon

2.25 The FE8 launched lts firat donor coordination meetLng Ln March 1992,followed by a second ln September. The first elicLted asaLstance from severalbilatoral sources for beginning the development of model offiees in St.Petersburg and Moscow, ln preparing procedural directives for INS offLces and

4 An early product of work carried out under the TCA is the recentlypublished paper by Nicholas Barr, n Transfor and the Social Safety NotMn uusia, Studies of Economies in Transformation Mo. 4, World Bank, 1992.

11

in revising existing legislation. Details of the proposed project, which lnpart drw on donor experience over the last six months, were presented at theSeptember meeting whlle other donors pledged continuing support for workalready underway and additLonal asseLtanuce from Sweden, Germany, the UnitedStates, onM and 12W. FZS efforts to coordlnate donor activlties have paiddivLdends in that there has been no duplication of effort and donors areworkLng together to ensure complementarlty of actLvitLes in the employmentservLces field. It will be important to ensure that such coordination Laextended to include training activitLes for which assistance La beiLng providednot only in this project, but in other Bank projects, and by other donors.

III. LUssOUs PUOM R"CIUT BXPURFXNCQ

m21vment gervices ln Industr&al ountries

3.1 Research in lndustrial countries has shown that effective employmentprograms combine reactlve and proactive measures (e.g. unemployment benfitswith job search assistance). Actlve measures often nesd complementarymechanisms lf they are to be cost effectlve (e.g. employment counselling andassesment before traLuLng). At the same time, according to a recent WorldBank survey, 5 lt is critioal that a legal and budgetary dLstinction be madebetween the source of finacing for income support, and that for proactiveemployment programs. OtherwLse, evLdence suggests that income supportexpenditures will *crowd out" investments in proactive activities duringperiods of high unemployment, just when the need for the latter becomeos moreacoite. As noted above (para. 2.11), this could become a serious problem forthe Employment Pund and is the reason why the Bank is seeking changes in theprsent budgetary arrangements.

3.2 Many studies whLch have examined the effect of unemploymentcompensatLon on the duratlon of unemployment have concluded that higherbenefits lead to longer spells of unemployment, and not necesearily to anequivalent or better payLng job. That is, unemployment benefits do provldethe needed income support to displaced workers, but could impede the processof economic restructurLig. Is thls a danger in Russia? It seems unlikely,aince the length and level of unemployment beneflts are not generous. The

benef t currently beLng pald is only about 2S% of the average wage, normallyfor a maximum of 12 months, Lncreasing by one week for each year of servLceover 25 years (the latter proviLson makLag claim processing very time-consuming).

3.3 In industrial countrles, there has been a shlft of public resourcestoward proactive polLeLes, partlcularly training, reflecting the growingimportance of human capital development on the one hand, and the decline inpublic works and wage subsLdles on the other. Although some proactiveprograms, such as retraining, may be more expenslve per partLeLpant than pureincome support, the duration of unemployment may be reduced to such an extent

S Developina Effectie Emnlovment Services, Draft, June 2, 1992, 3025R,para.99.

12

that total costs are lower. A recent study concluded that job searchassistance is osgt effective, and should be the core of any adjustmentassistance offered to displaced workers.6 The results of employment serviceevaluations in a number of countries have led to the conclusion that placementprograms can be a cost effective use of public funds in expediting theredeployment of labor. 7 Such evaluations take into account a range ofbenefits flowing from more rapid redeployment, including additional labor andcapital earnings, tax revenue, national insurance contributions, and savingson unemployment benefits. However, an Important problem typlcal of manypublic employment servicoes i the relatively low penetration rate - i.e. onlyabout a third of total vacancies are generally listed. Thls ls partlyattributable to location of placement services at benefit offices, whichobscures the placement function; staffing problems; and the nature of theunemployed cllentele, who are often low skilled. One possibility is toreqplre all employer* to register vacancies with the employment service, asmandated by law in some OBCD countries.

3 4 Accumulating evldence on mass redundancies points to the value ofestabllshlng on-site employment servLies as early as possible before theactual layoff date, and the importance of advance notlces. The most effectlveprograms appear to be those where both employers and workers are dLrectlyinvolved ln the design and delivery of services. Thli approach has beenfollowed in Canada, and is being adapted and used in Hungary. In Canada,between 1971 and 1981, labor-management committees, set up wlth the assistanceof the IndustrLal Adjustment Service, found 66 jobs for every 100 workersdisplaced, usually within a year. on average, 118 assistance reduced thejobless spell by two weeks (thereby virtually paying for ltself).

3 S Beyond placement, the OECD recommends that employment servlce actLvitiesextend to counselling job seekers about educational and trainingopportunities. However, lt should be noted that evaluations of training inindustrLal countries have shown mixed results. Overall, employment serviceoffLces wlth job training programs have hlgher wage/replacement ratlos.Whblat recognizing that generalizations are hazardous (given wlde variationsln cost, type of training, facilities, etc.), a major study of thecosts/beneflts of training concluded that the benefits substantiallyoutweighed the costs, in terms of lncome gains to individuals and especLallyfor the long term unemployed.8 On the other hand, certain groups tend not toenroll (older, less educated and female), and programs tend to train those whomost likely to be reemployed. Successful training programs requir skilfulguidance advlsors and trainers who can interest displaced workers in longerterm development, and amend curricula as nDeds dictate.

6 Leigh, D. (1990) Does Trainlna Work for Dianlaed Worker1? A 8urvev ofj$gtLna ZRLtfnce, Upjohn InstLtute for Employment Research.

7 Develoing Effective ZmnlgMent Servicee, Draft, June 2, 1992,EC21H, para.99.

8 Somers at al (1964) A Cgst fenef$t AnalysLs of Mhanno2r Retraining, ANAIndustrLal AssocLation, Chicago.

13

3.6 Computerlsation is an important aspect of the proposed strengthening ofthe employment services. A recent international symposlum on thi topic9

concluded, lats. ai1a. that computers can be powerful tools for the varyingneeds of employment servLces, provided that the applications are carefullyselected. Same of the benefits can be quantifled (e.g.* faster vacancyfilling and staff savings) while others are harder to quantlfy (e.g., qualltyof placement). Zn Flnland, the savings resultLng from shortened duratlon ofunemployment exceeded the considerable expenditure Lncurred in establlshing anextensive automatlon project. The key factors in success ares (i) the use ofstandardlzed occupational-industrLal-educatLonal codes and classifications and (LL) user acceptance (e.g., unlon attitudes).

3.7 Staff are a oritical input to employment servLies, particularly as theemphasis shlfts to proactive polLcLes, as distLnct from benefit delLvery.Avallable evldence reveals wlde variations in levels of staffLng (Table 3.1),although it is dlfflcult to compare clLent-staff ratios without knowing theexact compositlon of the servLces dellvered. It is, however, falrly clearthat the Lacreasing demands placed on staff (with rLsing unemployment andLncreased emphasLs on proactive policies), and limited funds, have createdserlous problem with staff recruitment and traLnLng even ln well establihedemployment ervLces. one US pilot study found that the increased staffingincreased the level of services in local offlces wlth concomitant long termconstructlve beneflts, so that the addltional resources dld not necessarllyincrease average costs per cllent.

Tabl 3.is Ratio of Staff to UnemployedEmployment Services Ln Selected Countries 1988.

Sweden 1l9Austrla 1:33Germany 1:37United Xlngdom 1s98Portugal 1:120Poland 1:225Turkey* 1375Mexlco* 1:400RussLa (Aptll 1992) 110(Dec. 1992) 1:136

* indlcates staff/applicant ratio - no unemployment baneflt system -limited core services and actlve program.

SOURCE: World Bank DReeglon EffectivLe v megn& services, June 2, 1992(Staff eatutates for RuseLa on basis of projected increased number ofunemployed to 3 million by December and a rise from 14,000 to 22,000 fieldstaff).

9 XLO (1988) The Ute of comnuter Technoloav in Nmloyment Servi2es.ecord gf Pro_enas, Labor AdminLstration Branch, Document #9.

14

Leffssons from ftnk Rxnerienc.

3.8 The project i. designed to alleviate the scial costs of adjustmnt byproviding immediate inacm support to those who are displaced, and by measureswhich will facilitate the emergence of effectively functioning labor markets.Sank activities aimed at institutional developmnt, enhancing the indigenous@apacLty of borrower institutions to perform their functlons on a sustainable

basis, are becomlng an increasingly important theme in lending operatlons,often through technical assistance. OBD analysis of Bank involvment inLnstitutional strengthening has revealed mlxed results, and has emphasised theimportance of the following factors:

(i) Government commitment. A review of 19 African cases of TA forinstitutional development (ORD Report #8S73) found that tho fivedeemed to be successful enjoyed the full support of the relevantgovernment ministries and agencies. Project Identification,preparation and pro-appraisal in the present aea has demonstrateda large sense of olocal ownership' and the strong commitment ofthe leadership of the central agency involved, the employmentservice. Technical assestance under the project would be oflimited duration and foreign advisers would be matched with anadequate number of counterpart Russian staff to ensure continuityof activities following the departure of expatriates.

(ii) Clarity of objectives and procedures. These need to be clearlystated and understood at the outset. There have been longbureaucratLc delays with new borrowers in 3astern Europereflecting, in part, unfamiliarity with Bank procedures. Thedesign of the project neds to be simple and straightforward. Xnaddition, training in project managemnt and famlliarity with Bankprocedures needs to be planned early in the project. This can bepursued through, for example, an Implementation Workshop. Thepropoed project intends to employ a sLmilar approach, possiblythrough a Launch Workshop which draws in officials from localoffices around the country.

(iii) Staff training. Some of the worst failures have occurred withrespect to training, and this component has generally beenunderepent. The problems have been attributed to poor selectionof candidates, lack of consultants with approprLate skills, thedifficulties inherent in the consultant/counterpart relationship,and high staff turnover.

(iv) Supervision. The foregoing poLnts to the need for intensivesupervision by Bank staff. Poorly performing projects in thearea of computerization and institutional development havefrequently been characterized by insufficient and poorly qualifiedsupervision.

3.9 Computerization is an important component of this project. ORD reviewhas found that the use of computers can provide more efficlent and effectivesmns for data collection and analysis, communication and dissemination.

15

Nevertheless, a recent Bank survey points out that the difficulty ofdeveloping and implemnting a compt hnsive employment servLee automation pleashould not be underetimated, particularly in an enviroment characterixed byrapidly rLsing unemploymnt and Ilmited local capacity. An important loveonevident frm experience in projects in lastern 3urope is that thecmputerization effort should emphasize simplicity nd speed ln an extensivenetwork. The imediate goals should be the registration of clients andbeneflt calculation. The delays encontered in attempting to lntroduce a mresophisticated national network ln Poland led to local offices introducLngtheir own system in a spontaneous ed uncoordinated fashLon, so that twelvedlfferent systems emerged.

IV.

A. Proiect Rationale A Obecie

4.1 Rationale for Rank *iaoing. The project directly addresses the Bank'stwin concerns to alleviate poverty and to promote the efficient use ofeconomic resources. The first is reflected ln its central aim ofstrengthening one of the weakest parts of the Russlan safety net, whbch aremeasures to assist those who lose their jobs in the stabLilzation andadjustment process. Second, lt will help to improve the functioning of thelabor market to speed up the redeployment of skills, which is central to asuccessful restructurLng of the RUssian economy. The support for retrainingwill assist efforts wbich have already begun to transforz Russia's humancapital base in ways that are necessary for a prosperous market economy. Bvonmore important, the success of the reform and stabilization program ltselfwould be jeopardized by a failure to provide incomes to those who becomeuneaployed; the only politically feasble alternative is to continue toprovide wage subsidies through credlt to bankrupt enterprLses.

4.2 *gifet abiecti,Xe. The central objectlve of this project, whLch is tobe implemented between Pebruary 1993 and October 1994, is to develop thecapacity of the IRS to process the anticLpated avalanche of benefit claimsfrom the rapidly growing numbrs of unemployed following privatization andeconomic restructuring. It is also designed to develop the capacity of the-PE to carry out active employment policies, including retraining, and toassist 38P to develop improved pensions administration and, with otheragencLes, to reform the pension system and commence the design of a modernocial securlty system. Thls will help in the preparation of successor

projects ln the areas of employment servleas, soclal protection and training.

4.3 *roEc RZoutlo. Work done under the auspiLe of the T5P was theJI5= of what is envLsaged to be fur pagg in creating a fully operational

employment servle- in Russia. The neds of the employment services wereidentified and assistanco was given to the design of a concentrated effort toaddrss the short-term needs of the MRS. In parallel bllateral donors wermaking modest interventLons in establlhinBg model employment service offices,and assiLting Y management ln preparing interim managenot andadministrative guidelines to dlitributo among the most needy regional andlocal offices whee un expected to hit earliest and be most

16

severe. The segggd phao is a continuation of the first* where a ProjectPreparation Facility (PPF) provldes limited fLnancing to continue thepreparation work begun under the fLrst phase, and encompasses (a) the desLgnof management system, to prepare PFS headquarters for project management; (b)contlnued preparation and dLitributLon of Lnterim guldellnes to key localoffLies; (c) for both the FES and 8PS, developing lnitLal computerLzatLonstandards ln anticlpatlon of early receipt of large number of computers, andpreparatlon of bLddLag documents for the procurement thereof; (d) furtherpreparatlon of policies related to mass layoffs and a standby public servLceemployment program; (a) beginnLng to develop an overall job traLning strategyand traLinng traLners in key centers in readlness for traLnLng activitlesunder the project; and (f) launching an effort to prepare teaching materlalsto develop natLonally-recognized qualiflcatlons ln commercLal occupations.

4.4 ThLi project forms the thir phase. it aims to complete the preparationof programs, systems and mechanisme needed for an effectlve unemploymentbenefit and employment servLces dellvery, train staff ln their application,test the system at the reglonal and local levels, create the capacity toautomate the system and develop materials and provide LiLtial equipment fortraining of the unemployed and those at rlsk of becomang unemployed.

4.5 In order to support the prompt delLvery of unemployment beneflts it isnecessary to install minimal hardware, software and applLcatLons packages. ADeneflts Subsystem Applications Package will permit automated regLstration,benefits calculation and record keepLng. Preparatory work under the PPF hasallowed for the ongoing distribution of operational and procedural guLdelLnesto local offices; this project would help to streamlLne the flow ofinformation. Improved central-local communications wlll impact on the deslgnof software and applications systems, to incorporate the capability ofensuring approprlate lnterfacLng between computer system and officeprocedures.

4.6 Over the longer term, a more sophisticated network of computerizatlonwlll enhance the capacLty of the PUS to effect a broad range of ImploymentService functlons, develop a core polley making capaclty, and design ongoingemployment programs. The Information and Data Management System andappllcations packages that emerge as a result of the longer termcomputerLsatLon program will facilitate progress towards a modern computerliedsocial security system (para 4.8., (d)) encompassing lnter-relationshLpsbetween dlfferent soclal welfare/employment agencies.

4.7 The third phase would be followed by a fourth, a comprehenslveDmployment Services and Social Protection Project in FY94 whLch wouldrepllcate throughout the country (probably over about five years) theunemployment benefits and employment services systems deslgned in phases 1through 3. It would also begln to integrate the LafonmatLon requirements (andpossibly administratLve and payments mechanlims) of cash beneflt programs thatare currently determlned and admlnistered by the F8S and the MlnLetries ofLabor and SocLal Protectlon and the ComisLsLon of the Supreme Soviet on SocialPolicy. Consequently# the proposed operation would be a very lmportant steptowards a system of soclal security appropriate to a modern market economy.

17

4.8 To meet the objectkve describe aboe (Pars. 4.2), the proJect wouldfinn equipment and technical assistance for suorting the followLngs

(a) For s=ervie delivery bv the 1F2: undertake the phsed implementation ofvomputor systems inoluding polioLes, standards, hardware and software atall levels of the 135 system with peLorlty focus on registration andbenefit payments and 1S8 mnagemnt system. AutomatLon would belatroduced gra4ually over the course of protect implemntation as thefield offLces meet the selectLon crLterLa (para. S.13). The softwarefor the computers L in the proess of bei selected from amaong anumber of ad hoc models currently ln use. The equipment would alsofacLlitate job search.

(b) For lgoe tM gaanct buLlding _f Mains

(i) desLgn programs, enabling mechanisms and monitorLng syste toimprove labor SAKe"t nolies ad -ans - aml

(iL) develop inCqM ari;e Lcluding model aployment offLces.standby public job creation and mas layoffs. This will alsoinclude the design of a long range automation plan for the FZS#and detailed plans for the first phase of Its implementation;

(iiL) develop an occupational classefication ssm and organizemonitorLaa of labor markets for foreOastiug unmploymnt and otherdemands on the 1P8. Thli will also facLlitate the process ofmonitoring living standards and poverty;

(iv) to improve the capaclty of the FI8 in ongoing efforts to organLseign tratina in new sklle for the unemployed to meet.the demandsof a market economy, and to prepare curricula and materials. Thlicomponent would generate posLtlve externalitLes through, forexample, the production of traLning materials which can be usedthroughout the system; and

(v) Whlle the focus of the TA is to the Moscow headquarters of the138, the success of the project dpends on its use at locallevels. 8taff traLnano for both headquarters and local staff ofthe PS5 wlll be a component of almost all parts of the project.it would be facilitated by a speclal unit.

(a) For improving the operatlonal effectiveness of the Has TechnicalassLstance, equLpment and staff training would be provided to developand test the automatLon of cash beneflt delivery on a pllot basis inthree selected oblasts. Additional ?A would be licluded for the designof benefit programs. Related work in the Ministry of Labor would alsobenefit from thLs part of the projects and

(d) For initlating the design of a modern social securLty scheme: A masterplan for a modern computerized social security system would be

18

developedr exploiting complmntaritieS aMong the different agenciesinvolved with employment services, cash benefits and social assistance.The plan would Lnclude recommendations for phasing.

C. DtaLed Pastures

prleet aordinakiun aLt

4.9 A Project Coordination Unit (PCO) will be established to support themanagement of the FES by developing operations guLdelLnes followLagperformanc benchmarka already agreed. TA tasks would include: (a)coordLnating the execution of the project operatlons schedule LicludLngperformance benchmarkas (b) developing contractor reportLng procedure. andprovldLng contractor monLtorLngi (e) ensuring coordination of the rlated TAtasks activlties, e.g., user requirements with the automation designs (d)preparing overall project progress reportsu (e) developing financLal oversightsystem and assistLng in financLal monitorLig; (f) advising on procurementproceduresi and (g) a range of other general management and administrativedutieL requlred Ln carrying out the overall project, such as translation andinterpreter services. The PCU would also provide training and experience tolocal staff, so that it could be gradually integrated into work of theheadquarters staff of the FES. Its role and functlons are detailed in paras.5.8-5.12 below. The management structure and functions of the proposedproject are elaborated upon in Sectlon V below.

staff TrainLn= Unl_

4.10 The staff training unlt would coordinate the overall nS staff trainingeffort including scheduling, arrangemnts for facilitLes, and the provision ofassistance in developing training materials and aids. These activities wouldbe carried out in cloos cooperation wlth the substantive area TA teams whichwould hate the major role in speclfying course content and tralningreVquirements. SpecLalist short-term consultants would help to develop anoverall staff training policy and capacity for the 15 and employment servicesystem at the regional and local levels. IdentifLcation of staff trainingneed and responses would lnclude development of course content, trainingmaterials and training aids, providLng equlpment and faclities, and overallorganisation and management of a traLning program that would Laclude self-instructional materials, traiLnng traLnrs and upgrading and refreshercourses.

Delivery gf Unenmlvment Beneflts and Umolo=ent Servlies

4.11 At present, computing facilities are limited to a small number ofemployment offices (50 as of May 1992). Configurations vary eubstantially,although the FES technical (non-mandatory) guidelines call for IBM-compatiblePCs an associated operating systms software. A variety of applications toperform the basic functlons of an employment offLce have been developedindependetly by local offices. The VES is currently evaluatLng existingprograms in use by employment offices, with a vlew to selectLig the best andmaking them the national standard. The project will provLde TBM-compatible

19

PCe and related equipment, software and other material to ensure the capacityto register a very large increase in the number of unemployed and to calculatebenefits. An average of two computers would be supplied to each raiyon officeand additional units will be suppled to areas where unemployment is expectedto be most serious. ActivltLes will include a crash program of policy andadministrative streamlining, computer and software support, and staff trainingin the necessary procedures and requirements. This part of the project candraw on technical assistance provided both by other donors and under the PPF.Computers will be provided to local offices, together with software (presentlyunder testing and evaluation) and staff training, under regulatlons whichprohibit their use for any other purpose. It will be a function of the PCU todetermine the readiness of each office to receive computers (para. 5.13).

Labor Market Pnllcies and Nanacoment vystems

4.12 Technical assistance and equipment will be provided to the F$S to: (a)develop the core policy making, program planning, budget formulation andfinancial control system, Including an audit capacity supported by amanagement information system; (b) develop a modest research, evaluation andpolicy development capacity, as well as a program design and developmentcapacity in such areas as job placement, job development, testing andcounseling, occupational analysis; and (c) develop of an employment serviceoversight/management capacity. Teams of technical experts in each of thefunctional areas, working within an overall national policy and programframework, will be assigned to work in the e8 departments on a day-to-day"basis to jointly develop with Russian counterparts the initial set ofprocedures, processes and overall systems necessary to mount a federal typeemployment service effort. PUS organizational issues, staffing and trainingrequirements as well as policy and operational issues raised by the EmploymentLaw and related laws and decrees will be addressed.

Proaram Services

4.13 Developing model local gIaMoigMen lffics and providing support fortheir replication throughout the Bmployment Service will require technicalassistance to the FES, which takes account of the diverse needs of theemployment system and will include computing capacity. The model will bedeveloped with input from local employment services and involve the following:(a) development of an initial design based on an evaluation of existingRussian experiments and experience elsewhere in Bastern Europe (b)application and field testing on a full-scale basis in up to three localoifices with different operational environmentes (c) refinement anddevelopment of a standard model (with options); (d) development of "how to"replication packages, including guidelines, procedures, systems, technicalmaterials, software, facilities and equipment requirements (e) training ofregional staff and the development of a regional capacity to prov±deimplementation assistance to local employment officesl (f) establish anational level "trouble shooting" technical assistance capacity to support thergional implementation effort; (g) monitoring the model's mplementation andoperational experience to adjust the model and to add new requirements thatmay mergel and (h) drawing upon the model's requirements to provide input to

20

the development of overall staffing, staff traLning and user camputerisationrequirements. Some office equiptent and matorial will be included.

4.14 The project wlll assist In the lonp-torm e1cu ant of comuersmrIJ.nshlna and installation of required hardware and software to upport acomprehensive range of client services and mnagement informatLon systems atselected offices (Annex 5). These applications will reflect extensions of thesoftware to be installed an part of the program described below (paras. 4.26and 4.27). The projact includes the establishment of small technicalreference librarLes ln nearly every oblast.

4.15 Procedures and measures will be developed to respond to an layoffsincluding the entablishment of early response teams (NRT) which will provideassistance to enterprlses faced with large redundancies. Under the projecttechnical assistance to the Its will be provided to develop, in concert withregional and local amplcyment services, an operational ERT program. First, amodel ZR? (containing the necessary methodology, procedures, tools, techniquesand guidelines) will be developed and fleld tested in several mass layoffsituations. Based on the experience gained, the final ERT program will bedesigned and a cadre of regional employment ervice staff tralned to carry outUT activities. The Ins will develop a national level BRT capacity to asistin major layoffs, the design and testing of new techniques and to serve as aclearing houe to share experiences among the local employment services.

4.16 Pfl's capacity would be strengthened to develop substantial labor-inteaive zublic service and/or temprary emlovment nroarams to createtemporary.employment and to provide useful services and products through thefollowing: (a) further development of policies and guidelines for theimplementation of the job creation jublic service employment authority alreadyprovided for in the NMployment Lawl1 and (b) the design and development of astandby discretional public service employment program whereby FE8 grants willbe given to local authoritLes to employ the unemployed in labor intensiveactivities, in specific localities experienclng sudden and severe increase inunmployment. Technical assistance will be provided to the INS and regionalemployment services staff in developing an operational program includingassistance in structuring staff training efforts for the employment servicespecialists conducting the program.

4.17 For some parts of the economy, the standby programs described above mayprove to be inadequate. Russia has significant numbers of cities that arevery greatly dependent on a single activity, including defense activities thatare/may be closed down altogether. Such areas will require much moreextensive assistance if their economies are not to collapse. included in theproject will be a review of the existing policies and capabilities' theidentification of needs and requirements and the development of an overallpodley and program framework which would provide Russian with an integratedand coordlnated local economic development capacity. In cooperations with thepertinent authoritles, Woposals for the specific econodmc developent

10This is an ongoing public works program already carried out under theauspices of local employment services and largely locally funded.

21

pollles and programs will be developed including the legislatlon and relatedresources whlih may be needed. The first stage of this activlty will be theoverall deslgn of the effort, its scope, objectlves and products. Dased onthis workl speciflc ter of reference for the detailed work will be preparedand carried out.

Labor Osloe nfoMtILon Swute

4.18 TechaLcal assistance wlvi be provided to begln to develop an updatedcomprehensive ocauatonL 1 lassLificatLonsystm that will be used as thestandard system not only for the employment services but throughout theRussian government, e.g., statLstical agencles, as well as by enterprises. Itsfull development, to be completed under phase 4, wll involve a wide range ofGovernment agencles and an interagency design and coordlnating group will needto be astablished. The classdficatlon needs to be linked to skillrequirements, to be useful for the design and accredLtation of nationallyaccepted trainLng courses, and for occupational guidance and counselling, forwhich materLals need to be developed. Guidelines and other informationalmaterials will be prepared to help promote the effectlve working of the labormarket, lncluding the establlibment of private job placement agencies, thepromotion of newspaper "help wanted* advertisements, and the preparatlon 'howto' brochures on seeking employment, job interviewing, resume preparation,etc.

4.19 Technical assistance to organize labor market monitorina through use ofservice statLitLcs of employment offices, household surveys, enterprisesurveyt, and speclal surveys (e.g-, telephone surveys). Links need to beestablished betwen labor market monltorlng and poverty monitoring. Themethodology for labor market forecasting, both locally and nationally, needsto be improved. Staff would be trained in procedures of routlne monLtoring.bpurLma negotiations it was aareed that detailed toerm of efernce would henregnad under the En1 and would be aareed between the 135 and the DAA" I ara,7.1 lall.

4.20 The INS has already begun to undertake training activLties, which are anessential part of comprehensive proactlve employment stratogy. The projectwll help to strengthen national capacLty to provlde training to theunemployed or those workers whose present employmeat is at risk. This willoccur primarLly through the provlsion of technical assistance to the 135 lntwo broad areas: (a) traLning strategLes and polLcies; and (b) traLnLngprogram and materials.

4.21 Technlcal assiLtance would be provided to enable the F18 to develop atraLniag pollcy and strategy whlch wlll deliver flexible adult trainingprograms accordLng to the needs of the emerglng market economy. EmphaLsi willbe placed on a strategy based on the contracting by Employment ServlcesOffLces of traLnlng to exLstLng local institutions (public and Private)capable of deliverlng modular, broad based, job-orLented traLnlng COUrses lnskill areas wlth good employment prospects. FES staff would be assiLted todevelop crLterla for the selectLon of the traLning lnstltutions as well as

22

adeqate contractiag procedures, monitoring and evaluation procedures andoperational guidelines for the proposed new traLning strategy which willspecify priority client groups and skill areas. (It was aered durinanecotiation. that mrour t of trainn&g eauinment would commence only afterdeAiled criteria for sJelecti gf trAinina inetitutiogas gntd goursee hLae beedeveloped d d by h ak liara.7.1iIb. Special emphasis would beplaced on the development of linkages between the 13S, the Employment ServlcesOffices at regional and local levels and the training institutions which meetthe above mentioned criteria. Policies for the relevant development of FESand Employment Offices staff would be elaborated and agreed with the StaffDevelopment Vnit. It is assumed that existing training facilities operated bythe Ministry of Education (MoR) are capable in many cases of being reorientedand restructured to meet the criteria of the proposed modular trailning system.Xt is anticipated that in making the selection of institutions and courses,local employment offices will work closely with representatives of employers,trade unions, and other units of local government. The arrangEments forcoordination of actLvitLes related to workforce retraining among FES, Mob andother relevant mLaLstries are beLng developed by the FES ln accordance with aPresidential decree issued in May 1992.

4.22 In parallel wlth the establishment of criteria and with the developmentof policies and procedures, a second technical assistance team will put inplace actual trainLng responses according to the identifled needs of the locallabor market. it is assumed that these traLning responses wlll be generLc andbroad-based and will respond to needs not yet met by the Russian educatlon ortrainLng system, i.e., the requirements of the developing service andcommercLal sectors and the new skill needs created ln restructured orprivatized enterprises. Once local labor market requirements have beenidentified and approprLate traLning responses agreed wlth relevant Russianpartners, development of actual trainLng programs would be initLated. It isintended that these program should meet the crLteria developed by the PBS andshould address the needs of spweial cllent groups (e.g., disadvantaged youth,longer term unemployed, women, et.) according to greed polley. Wherepossible, modules and materLals would be incorporated from availableinternational sources and the project will support the adaptation andtranslation of thes materLals. Where necessary and feasible the project willsupport local contracting out of curriculum development and provision is madefor the production of these materials on a competitive basise Each curriculumpackage or module would be installed, tested and revised by the TechnicalAssistance team before being released for countrywlde use.

4.i3 The training initiatives begun under this project would be a first steptowards eatablLihing an improved training system; actLve discussions of aposeible training projeot are underway. Moreover, the short time horizon ofthe present project prevents major investments in new facilLties andequipsent. Eowever, a mlnimum investment in hardware is required. Asdescribed above, the present project would provLde a core of new trainingprograms and curriculum materials suitable for further applicatlon in a largerretraining program. Th progra would Lnclude short-duration training lnskills for whlch a substantial demand can be antLeipated in many locations andwhich can reaonably be expected to lead to employabLlity. given thestructure of the existing workforce and the character of the expected demand

23

for *kllse, it is unliely that any large portLon of the identified trainingnees wlll be of the traditLonal technical/Lidustrial type as indicated inthe precdig paragh, most will be likely in the servLie or coammrcialareas. The project therfore will support the equLpping of selected tralninginstitutLons which fulfil the 138 crlteria for the delivery of modular broad-based mployment traiLnng for targeted client groups. The equipment proposewill include geric audLovisual and small computer equipment suitable for thepremtation and learning of any subject matter, including basdc PCappllcations. Thre hundred sets of audiovioual equipment only, and 80 setsof both audLovisual equipment and computers, would be made avaLlable to enablethe lntroduction of the new traLning materials ln locations currently wlthoutsuch qulpment. The TA team will assiat the FE8 with administratlveprXoiere for leasing the equlpment to the traLning institutLons and willthus eons flexibility of resources during the early stages of the project.

LS&r of oLal 2191MLOnI=

4.24 Suport to the 1(5 will include euipment and technical assistance tosupport pilot programs ln selected oblasts (possibly Tversakaya, Smaolenkayaand Bryanskaya) to test computerization of processing of pension benefits. Incontrast to the 738 program, this will involve some regional networking ofcomputers. Technical assistance will be given to assist the evaluation ofthese pilot projects, with special reference to the design of future pensionadminstsration throughout the country. Assistance to staff training will alsobe included.

4.25 TechnLcal assistance will also be given for work on reform of socialprotection policies, for which the MinistrLes of Social Protection and Laborshare reponsibility. This includes assistance for reform of pensionpolicies, und for the design of targeted soclal assistance policies, includingmeans-testing.

Dai=on of a Modern Scial ecurLtv System

4.26 The thrust of the proposed project is to treat the administration ofpensions and uneployent benefits as entirely separate functions ofgovernment, as indeed they are in Russia. Uven now, however, there are somepeople for whom the same information - earnings during the last year -- isrequlred both to calculate unemployment benfits and pensLons. At presentwork histories are retained ln the form of workbooks rather than computerizedtrcords. pension contributLons and employment Lnsurance are made by employingenterprises sLply in proportion to their payrolls, and no record LimaLntained of the individual whose mployment led to the contribution. In thelong run, however, the computerLiztion of individual work records, andnational Contribution to the Pension and Imployment PundG, could potentLallyserve both purp oes. Xf eventually it is decLded to move to a more completelyfunded pension system, rather than the present pay-as-you-go approach, thenlifetime contribution will need to be recorded. Thli would reuire a fullycomputerized national social security system that would let individuals changejobs and places of residence quLte simply, swLtch between enterpriLsemployment and slf-employment, and even leave the labor force altogether fora time. It may be valuable also for health lnsurance purposes.

24

4.27 Such an Literated social security system will probably not beestablished in Russia for at least five years, and may well take longer. Asthe separate syste become increasingly ocputerized, howver, lt isLmportant to recognise their long-run need for compatibliLty and for a commondata base. 5he project therefore includes consulting services that willexplore the optlons for the master plan for such a syetem and its implicatLonsfor investments ln hardwere. The study needs to make recomndations as tophasing. On thLs basL lt will then be possible to deslgn the next stage inmuch more detail, whlch could be used ln a successor project (described inpara 4.7 as "Phase 4"). purina Lactiations gt was aereed that no work wouldbe undertaken under thisL eanonent until detailed terms of reference and costestimates have been aoreed between the 13S and MSP. and that the final troductwould LngCrXore &ction-orientd reMndations 12are *.7(c 1 .

V. PROJ3CM 00 E3 1Namcm- wGg. AnD XKnPLNNNYA'!

Coat of the Projec

5.1 Mugu= of Prolect gost. Project costs are estimated at US$133.0million equivalent and include prvision of computers and related material,furniture and euipeent, publications and translationes specialist servicesnd fellowshiLpi and recurrent costs for the project items shown ln Table 5.1

and further detailed in Annex 4.

Table §.ls USUAY OF PROJUCT COSTS BY PROJECT 1TK

oi SX of Xof---- itti---- Sase foreign LocalLl Foreign Tottl Cosa Costa Costs

ProJe Cotrdnatienk tuni 15.0 1.4 16.4 12 9 91fteff Training 9.6 0.5 10.1 8 9 91

Beeits d Service Deivey S.5 36. 44.3 34 s8 12Labor Narkett Nwagent 0.7 0.7 .5 100Prori Services 6.1 6.1 5 100Labor PArkt Infortion Systs 1.7 1.7 1 100hploytsft Trafning 1.7 8.8 10.5 8 84 164.ong-terl Desin 0.6 0.6 .5{tlarfee 33.3 33.3 23 100

InMstuv of Social ProtectionNISP Pilot 7.1 7.1 5 100Reffinuing PPF 1.5 1.5 1

Totat bas csts NU AL II M i 4Physicat contingenciesPrice contfi°nfee I/ 0.1 0.6 0.7 1 14 84

Totat Project Coats 2t MU OA AU 11 11 49

1/ Contneces ae based en non-co"uter-related ept printing plishin ad tratnfng totalingabout $18.0 millton2 Costa do not Iruclds tthies ad ts.

5.2 A summary of project costs by category of expendlture is given in Table5.2.

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Table S. 2t PROJWCT COSTS BY CATSGO 01 3UDZRw

-USSi Niton------ X x otLocal Forela Total Forefgn Total

COuterS, epument, books'wid aeatI owtorfals,printing &W p. tashing 6.0 52.S S.5 90 4

Consultants' svtcesfettewhips and trafnlfr 10.6 15.3 25.9 59 26

Adtntstrative Expens 15.0 - 15.0 11Seltus ,J - - 74 25

?*to% Projlct costs 65.2 17.8 51 100

5.3 Basis of Cost Estimates. The costs for equipment and material haveben baed on current prices. Both short and long-term technical assistancecosts have been estimated on the basis of recent fees paid and the high costof accommodation and subsistence in Russia. Th person-month costs forspecialists include housing, relocation costs, salaries, subsistence, officeservLces, fees, overhoads and recruitment costs. Base cost astimates reflectpelcoe as projected for the time of negotiations (October 1992).

S.4 Custcms Duties and _axes. Project costs do not include any estimatesfor taxes and duties as the loan would f$nance foreign exchange costs only.It is assumed that equipment and goods imported directly for use by GovernmentmLnLstrLes are exempt from duties and taxes. Reimbursement for locallyprocured goods and services under the loan would be made on the basis of 100%of local expendltures (eo-factory cost) and 75% of local expenditures foritems procured locally. As there are no civil works in the project, physicalcontingencies have been omitted.

5.5 ContL$nMgL A1lwgancs. Price contingencies between negotiations(October 1992) and the end of project implementation are estimated at US$0.7million eoulvalent, or about 3.9% of base costs for equipment (excludingcomputers), books and publications, and trainLng (totaling about $18.0million), consistent with international inflation estimates. Contingenciesare not included for Consultant Services since such services will benegotiated on a contract basis early in project implementation. Project costsand contingencies are estimated in US dollars only, since inflation rates ofthe Ruble are difficult to forecast with any precision. Since the Governmentbudgets on a quarterly basis, periodic budgetary adjustment may be made shouldshortfalls occur in counterpart financlng.

5. 6 For n EAn9 e 2M2g". The foreign exchange component wasestimated as followas (a) computers and related oquipment - 100%; equipment -

100 %j (b) lnternational specialist services and fellowships - 100%. Thesepercntages have been determined by: (a) assuming that almost all equipmentwould be imported; and (0) assuming that all project fLnanced specialistswould be foreign unless otherwise specified (e.g. interpreters). Includingcontingencies, the resulting foreign exchange component is estimated atUS$67.8 million, or about 51% of total costs.

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5.7 ZPr-S.ZnaMULB. The propoed Bank loan of US$70.0 mllion wouldfinance 100% of the foreign exchage campoent ad about 3% of the local costsof the project. The Goveornme would finapo the balanc of project costspincluding salaries and administrative aspens and local costs related toservices delivery. Project financing would be La accordance with Table 5.3.tn order to pemit the FM to complete final quipment liets, to facilitatethe completion of appropriate technical asistanc ageements, and tofacilitate the further development of project preration activities, aProject Prtparation Facility (VW) of US$1.5 million has been granted to coverthe cost of office equipment and specialist services necssary for timelyproject preparation. The PPP would be refinanced under the proposed loan.

Zsble 5.3: Financial Plan

--U8 ^Million----Government Dank Total

Computers, equipment,books and educationalmaterials, printingand publLshing 5.4 54.5 59.9

Consultants' servicesfellowships &tralning 9.5 15.7 25.2

Administrative Ixpenses 15.0 15.0salaries ALA ALA

Total Project Costs : M 70. 133.0

Manaaement and Xwlmonat1ln

5.8 Managont.j 8tructura. The majority of the components of proposedproject belong under the auspices of the Head of the FM. The day-to-dayoperations would be implemented under the direction of the deosignated DeputyChairman, who is in turn accountable to the Head of the PFS. As described inparagraph 4.9 above, a PCU (Annex 6) is to be estabilshed to dwvelop operatingguidelines following performance benchmarks already agreed, reportingprocedures, contract monitorLng and advising on prcuren ment proc dures. ThePCU would facilitate coordination between the diffrent specialists hired onboth long- and short-term bases, assist in financial monitoring, and aid theproject beneficiaries ln their liaison with the Bank. Durina neootiations Itwas anreed that the techanical assistan aW staff of the CUwould be maintained throuahout the duration of the uroiect MIt?.d) Animportant objective of the PCU is to enhane the capacity of the IRS staff tomanage and coordinate an active employment srvice program. A timetable for&n=ointment of a suffilient number of counternart staff was &WM"ed durina

27

neaotiations (Mara. 7.1fel1. Pilot activities and design, and programevaluation in the MSP would fall under the direction of the Minister. Projectactivities terms of references havo been completed and are being reviewed bythe FES with a view to requesting proposals prior to negotiations.

S.9 Manacement Punctions. The PCU would be responsible for projectmanagement and coordination, as well as trouble shooting as problems arise inthe carrying out of the specific TA tasks, which would be triggered by thefailure to meet specified benchmarks (Annex 7). Given this set of functions,the international consultants, skills should be largely in project management,rather than the technical tasks being undertaken, since the latter expertiselies mainly in the TA teams. There would be four persons, and each wouldbring, beyond project management skills, a background or knowledge incomputerization, employment programs, training, and financial control mattersrespectively. In addition, provision has been made for the short-termservices of a Procurement Specialist and for unidentified technical assistancefor troubleshooting and unforeseen activities. The four Russian counterpartswould be generalists with promise of being quickly trained in projectmanagement techniques.

5.10 An overall operations schedule (Annex 7 would guide the implementationof the project and facilitate the necessary coordination of tasks, monitoringof progress as well as problem identification and resolution. Thus a key telkof the PCU would be assist in implementing the project in accordance with theschedule. The plan, in a form of a project wide chart, would be drawn fromthe component terms of reference and the executed contracts' scope of work.The Terms of Reference and the concluded technical assistance contracts wouldclearly identify the tasks to be performedp the products to be delivered; setout performance timetablesp and detail the basic administrative elements suchas reporting and procurement/fiduciary requirements. The ProjectImplementation Schedule and the Project Execution Xanual (PER) contain theoverall key benchmarks, critical paths and other information through whichproject progress could be tracked. Critical linkages and relationshipsbetween the individual technical assistance efforts would be detailed therein.agreement was reached durino neootiatiQna on the content of the ImplementationSchedule and Benchmarks U7.1 If) .

5.11 The PCU will directly strengthen project suprvlsion in severalrespects. There would be a contractor reporting system with periodic(monthly) technical assistance progress reports to the PCU which would forwardthem to the Head of the FES. The report format would be designed by the PCUand would relate to the Project Implementation Schedule. A monthly summaryreport would highlight problems and issues, recommended actions, etc.

5.12 similarly, an FES reporting system with periodic (monthly) technicalassistance progress reports to the Bank (and other Russian authorities, asappropriate) would also be established. These reports would be prepared bythe PCU on the basis of the contractors' progress reports noted above. Therewould also be periodic F8S financial reports to the Bank based on the Bank'sexisting requirements and procedures. 'The 1S technical assistance progressreports to the Bank would identify and discuss the key policy issues and othermajor problems which have surfaced in the contracting reports or otherwise

28

have been identified. As appropriate, the Bank can provide guidance or otherassistance, or take up matters under the ongoing policy dialogue.

5.13 A large number of computers are to be procured under the project andinstalled at the 2,200 plus FES reglonal and local offices throughout Russia.Computer delivery and installation arrangements would be included in thebidding documents and would be the responsibility of the supplier, as wouldmaintenance arrangements. it was aareed at neontiations that the FRS shalls(at furnish to the Bank not later than Mav 30. 1993, reaulations for thedistribution of comruters to individual FES field offices, and animniementation glan including criteria for the selection of such offices.gceeptable to the Bank. and fbl carry out the distribution of comg uters andre'ated eauiuMent in accordance with the imolementation plan J2ara. 7.1 (l).

S 14 Since the FES is expected to face rapidly increasing demand for servicesdue to unemployment, implementation is planned for 15 months. However, thistimetable is undoubtedly ambitious, and the project completion date has beenset at 21 months after start-up to provide for possible slippage. Activitieswhich are critical to meeting the project objectives includes (a) the ProjectCoordination Unit (para. 4.09); (b) staff training coordination (para. 4.10);(c) computerization for the delivery of employment services (para. 4.11); (d)program planning, budgeting and financing control and employment servicemanagement elements relating to labor market policies and management systems(para. 4.12); (e) model local offices (para. 4.13) (with a possibleredirection of effort to designing system needs and supporting material.); (f)mass layoff response capacity (para. 4.1S); and (f) public service employmentprogram (para. 4.16) (directed at developing a crash labor intensive publicjob creation effort) If necessary other TA and employment trainingactivities could be deferred. Areement was reached fAt neot iations that theBorrower and the-Bank would carry out a mid-term evaluation-not-later thanOctober 31. 1993 to review oroaress and take remedial action to restructureoroiect desian as necessarv foara. 7.lfhM.

ProcuSfmana

5.15 The project elements and their estimated costs, and the procurementarrangements for the components to be financed by the Bank are summarized inTable 5 4, Recurrent and other local costs financed by the Government areshown under NB.F. (non-Bank financed).

5.16 All equipment and materials to be financed from the Bank loan proceedswould be procured in accordance with the Bank's GuIdellnes for Procurementunder IERD Loans and IDA Credits (May 1992). Russian manufacturers competingunder Xnternational Competitive Bidding (ICB) would receive a preference inbid evaluation of 1S% of the CIF price or the prevailing custom dutyapplicable to non-exempt importers, whichever is less, provided they can provethat the value added to the product in Russia exceeds 20% of ex-factory bidprice. One of the requirements for the equipment contract would be thatbefore signing the contract the successful bidder shall arrange to berepresented by an agent in Russia equipped and able to carry out thecontractor's delivery, installation, maintenance, repair and spareparts-stocking obligations.

29

5.17 Equipment and materials to be financed by the Bank will consist ofcomputer systems and peripherals, software systems, telecommunications, officeand classroom equipment, and training aids and related supplies. These willbe grouped in about 25 procurement packajes costing between US$10,000 and15,000,000. Contracts for equipment and materials estimated to cost more thanUS$250,000 equivalent each will be procured through International CompetitiveBidding (ICB), using the Bank's sample bidding documents modified to suit therequirements of individual project packages. For computer systems and largesoftware, a two-stage bidding procedure will be followed. Due to theshortcomings of the local electronics and software industries, local biddersfor major contracts are not expected to be competitive. However, jointventures formed with international companies have a good chance of securingseveral contracts and sub-contracts for software systems and computerperipherals. Contracts for office and classroom equipment and supplies arelikely to be won by local suppliers. International shopping (IS) with atleast three quotations from three eligible countries will be used forcontracts estimated to cost less than US$250,000 with an aggregate limit ofUS$3.0 million. These include: (i) acquisition, translation and printing andpublishing of books and training manuals for an aggregate value of US$2.2million equivalent, and (ii) contracts for office, telecommunication andclassroom equipment and supplies and standard software, for an aggregate valueof US$0.8 million equivalent. Direct Contracting (DC) up to an aggregateamount of US$1.6 million equivalent will be allowed for item of a proprietarynature or items required to ensure compatibility with the already installedequipment.

5.18 Consultancy assignments will involve both individual consultants, mostlythose hired for the PCU and the Staff Training Unit, and national employmentservices. selection of consultants will be in accordance with the Guidellnesfor the Use of Consultants by World Bank Borrowers and by the World Bank asExecuting Agency (August 1981). As the FES does not have the experience andcapacity to provide many of the administrative and personal aspects ofstandard compensation contracts for individual consultants, it is proposedthat their hiring be channelled through an international consulting firm.There will be a total of about 20 assignments ranging from two person-monthsto 50 person-months, the cost of individual assignments ranging from US$50,000to US$2.0 million. For the consulting assignments and fellowships Involvingthe national employment services, offers will be solicited from at least threeeligible countries having the requisite organization and experience.Training services will be obtained mostly through consulting organizationsassociated with the project. Local consultants with the requisite experienceand background are rare. Therefore, their participation in the projectassignments is expected to be low and limited to specialized areas, such astranslation.

5.19 Due to the centralization of procurement in the former Soviet Union, theknowledge of the project implementation agencies in international commercialpractices and the Bank's procurement procedures is almost non-existent.-Therefore, all procurement activities under the project will be coordinated bythe PCU, which will be assisted by a procurement consultant. To ensurecompliance with the Bank procurement guidelines, all contracts awarded throughICB, as well as all consultant appointments and the first two contracts under

30

I8 and DC procedures will be subject to prior Bank review. These limits wouldresult in prior review of over 80 percent of total procurement. All othercontracts will be subject to selective ex-post review by the Bank. Importantmilestones in procurement are shown in Annex 7.

5.20 Procurement for all items under the project would be carried out by therespective beneficiaries (FES and MSP) shown in Table 5.4 below. Since thisis the firet project in the sector, three new staff members would be giventrainLng in procurement by ICB, through courses conducted by ILO. Consultantswould be retalned by the borrower under the PPF to provide assistance inpreparing and evaluating bids. The PCU would be staffed with a managementteam competent to assist with bid preparation and evaluation, and the servLiesof a procurement specialist are included in the PCU for a porlod of twomonths. World Bank mission consultants would be called upon to assist inreviewing procurement documentation as part of regular supervision activities.

5.21 A Country Procurement Assessment Report has not yet been completed.However, in the context of this project ther" is no local competitive biddingand the Bank-financed portion of project expenditures would follow the Bank'sProcurement Guidelines.

S.22 To ensure the establishment of adequate management capacity from thebeginnLng of the project, loan effectvenes would be conditional uMon thesLgning of a contract for emolovmet of technical assistance for the PCU andthe anDointment of aualified caunt-roart_taff within the PCU to work toaotherwith the technical assistce I5para. 7.31.

5.23 The Project Implementation Schedule is indicated in Table 5.5, fromwhich the Estimated Disbursement Schedule has been derived.

5.24 Procurement information would be collected and recorded as follows:

(a) prompt reporting of contract award information by the borrowers

(b) comprehenaive quarterly reports to the Bank by the borrower(assisted by consultants), indicating

(i) revised cost estimates for individual contracts and thetotal project, including best estimates of allowances forprice contingency;

(ii) revised timing of procurement actions, includingadvertising, bidding, contract award, and completion timefor individual contractst and

(iii) complianc, with aggregate limits on specified methods ofprocurement.

31

Table S 8umry of Proped Procurmet Arra nt(U8$70.0 millLon eqivalent)aI

j-ct h st 0 ' -- fo 1t N..o.d Totalprojet stIll'ot ICB Other Wl.B.F.I Cost

1. F l IIplont sevice CFM)1.1 csusi.o 3. 37.0

37.0) (3.0)1.2 ospatr Librry nIt., vl I.41 1.6

(1.6) (1.6)1.3 "lIS pntimn 5.4 5.4

1.4 0th1w lWqi1nt 5.5 0.6 6.3(5.5) (0.8) (6.3)

1.5 TelMflct Au st_s IFoltewhips 12.Of 12.0

(12.0) (12.0)1.6 IntorprtattonTleatIn 1. 4 1.4

(1.4) (1.4)1.7 MIoW4In 2.2W t 2.2

(2.2) (2.2)1.0 Traininr 0.9W 9.2 10.1

(0.9) (0.9)1.9 Iniwetrative Expuse 15.0 15.0

1.10 Slaries 33.3 33.3

Subtottt 42.5 18.9 63.0 124.4(42.5) (18.9) (61.5)

2. Ilistry of So0ia Protection (NIP)2.1 CeuA. 6.0 6.0

(6.0) (6.0)2.2 CoqpUter Library hterial 0.02w 0.0

(0.02) (0.0)2.3 TechnIcal sfstane A

nd FeltwAhips 1.1/ 1.1(1.1) (1.1)

2.4 Trainvng 0.1Wy 0.1(0.1) (0.1)

btet.l 6.0 1.1 7.1(6.0) 1.1) (7.1)

3. Nlsellwtwa3.1 fldfnencing PPF 1.5 1.5

(1.5) (1.5)ownetat 1.5 1.5

(1.5) (1.5)

TOTAL 48.5 21.5 63.0 133.0(48.5) (21.5) (70.0)

£1 Figres in parentheses are tte respective amount financed by the Bankloan.

W oIn-Elank fiwAnced.i/ US$1.6 million will be procured through Direct Contract.

Si/ mall item of equipment, trawlation and printLng services valued atabout US$3.0 milion would be procure through International Shopping.

k/ Consltants would be appointed followlig Bank Quidelies.

32

TUB PRoJ3CT IIneIeITATION scUHU

ZAbls.5t Estimated Annual Contractual and Other Payments(US $70.0 million equivalent)

Project Quarter totalProject Elmnt Pro-Project 1 2 3 4 5 Pamnt Rmrks

L,m-T1SlgEffec/Close Dec. 1992, Jan. 1993 Apr. 199S

1. CttorIS 0.4 11.3 12.2 11.8 7.3 43.0 IIBPreulitficatfn .. o...o..

/Awd .. o DeliverySite Prepration -

Law-Term PlanPlavdre _ _Nardware Specs."Satnm Dev't. Y

Prototype Hardware xxx2. Coeputer Libraries 0.8 0.8 1.6 Direct

- Uwpps3. NIS Preparation 1.1 1.1 .0 .1.1 1.1 5.44. Equdpment (Tr.ttl.) 2.6 2.6 5.1 ICB

Bid/Award/dslivery _Office equpip t & .tt. 0.1 O.S 0.? is

5. Technical Assistance xxxx 2.1 2.6 2.8 2.8 2.7 13.1 Coel.t@ TOtAfellewohips _ RFP Issued

9/926. transLatfons 0.4 0.4 0.4 0.4 1.4 Local

_ Zbusul~~~~~~~~~Cewtants

7. Printing e,d Publishing xx O.S 0.5 0.5 0.5 2.0 IS____WtJMH __ IFKWwi

S. Training 2.3 2.2 1.9 1.9 1.9 10.1 IS

9. Adwfnistrotiv Expenses 3.0 3.0 3.0 3.0 3.0 15.0

Salaries 6.7 6.7 6.7 6.7 6.7 33.3

Refitancing PPF 1.5 1.S

TOTALS 11.53 17.0 28.6 32.4 30.7 23.5 132.3

Contfngncis 0.1 0.1 0.1 0.1 0.1 0.711.5] (17.2) (28.7) (32.6) (30.9) (23.6) (133.0)

Bank-Financed 4.9 16.1 19.9 18.2 11.0 70.0

S.25 tatus of Prelaration. This project is in a state of preparation whichwould permit timely implementation because: (a) 80% of the technicalassistance packages have been fully defined, draft term of reference arprepared and draft requests for proposals are being reviewed by the Bank;(requests for piopouals are expected to be invited by the end of October1992)1 (b) specialized consultants are preparing bidding documents for

33

procurment of computers and related materlal under the PPl' and (C) allequlpmnt lsats with bld specifliatlons for the trainlng component will beprepared in parallel with development of criteria for trailnng instLtutions.Project completlon would be October 31, 1994, and the Closing Date would beAprll 30, 1995.

5.26 21§br mtn-. The proposed project would be dlibursed over a perlodof about 27 months. As the project proposed herein Ls the first livestmentproject to Russia, no disbursement profile exLts. Moreover, theImplementation period is considerably shorter than more traditional Bankinvestments. Consequently, the standard country-wide dliburement proflledoes not apply to thli operation. Disbursements would be made againsts

(a) computer and computer library materials, equlpment and printing -100% of forelgn expendltures for directly imported ltem and 100% oflocal expeadltures (ex-factory) for ltems manufactured locally nd75% of local expenditures for other item procured locally;

(b) technical assistance, fellowships, translations and tralning -100*. Dlsbursements from the proposed loan are expected to take placon an average of about three months after incurring the expenditure.Disbursements are expected to be completed by Aprl 1994, and

(d) reflnancing Project Preparatioa Facility.

S.,7 For expendltures relating to fellowships and contracts for goods eachvalued at less than U8S50,000 equivalent, reimbursements would be made on thebasis of Statements of Expenditures (SOEs). Disbursements for all other ltemswould be made against full documentation. Documentation supportLng the 80swill be kept by the PUS and NSP and be made avaLlable for review by Bankmlssions. To facilitate timely project implementation, the Goverment wouldestablish, maintain and operate, undor torm and conditlons satisfactory tothe Bank, a US dollar SpecLal Account in the Optimum Bank of Moscow. Theauthorized allocation to the Speclal Account is US$5.0 million representlngestimated average expenditure to be pald from the Special Account ovwer afour-month period. Applications for replenihment of the SpecLal Accountshould be submitted monthly or whenever the account is drown down by about S0%of the lnltial deposit, whichever occurs first. Replenishment applicationswould be upported by appropriate documentation.

5.28 Accounts and Audits. The PYS would maintaLn separate accounts for theproject and would prepare quarterly descriptive and financial reports,beginnlig from February 1993. Project accounts lncluding the Special Account(para. 5.27) would be audited in accordance with the March 1982 BankGuldellnes for Flnanclal Reportlng and Audltlzg of Projects Flnanced br theWorld Bank (March 1982). The Bank would be provided within six months of theend of each fiscal year w$th an audit report of such scope and detail as theBank may reasonably request, lncluding a separate opinion by the auditor ondisbursements against a certified statement of expenditures.

34

VI. 3331!Y AD RI8SK

6.1 mnSSIU. ay providing the ncssary equipmnt and training ad byngthg the managment of the 8, the poject wold help creto the

capacity to provide timely support for the anticipted large nmber ofunemploye in the short-tm, and in the longer-term would aS*ist d.vl.pmatof a moder wide range of laor arket policel supporting the estructurlgof Russiaos economy* and a computeried social secuity system.

6.2 IiuI. The main risk la that the project timetable, which isambitious, will be delayed. This risk is partally mLtigated by the otrog

tet of the 13S and MP personnel involved, and by the political andsocial pressure on the employment se"ices that may be expected "unemploymet grows. In any c"a, the urgency of the ned does not permit amore relaxed timetable. A second risk is that organizational change mayweaken ffectiveness or reduce receptivity to foreign advice. t" riSk iBacceptable since the 13 hs recently ben given an mandate adclear authority to accelerate decision-making. A third risk is that loCalauthorities will proceed so independently of the oentral J88 aNd 3MP that theadoption of the project s iproveents wlll not proc"ed. Ths risk wll beaddreseOd by emphasiLing local consultation (offorts to date to involve localoffices initiated through bllateral donors and continued under tho iPM arealready paylag dividends) and staff training, which will be stre ngth d underthe project. Moreover, local offices will be requred to meet crlteria, stillto be determined (para. 5.13), to be eligible to eceive computers andequipment.

6.3 .&I XmaonaaLcZtnik. There are no environmental issues deriving fromthis project which has been classified as category 'C'.

A.~ ~ ~~Vz

a. kareyments Reached

7*1 at negotiations the following aremnts wer reached

(a) a detailed terms of reference for labor market informatlon systemswould be prepard unde the WIand agreed betwee the l and theBank (para. 4.20);

(b) proculr et of training quipment would co_nce only afterdetaleod crlteria for seletion of training institution andcourses have bee approved by the Dank (para. 4.22)s

(c) no work would be undertaken under the design of a modern socillsecurity systm until detailod tems of referece and costestimates have been agreed between the o8 and M5P (para. 4.28)1

35

(d) consultant and counterpart staff of the PCU would be maintaneadfor the duration of the project (para. 5.6)1

(e) a timetable for appointment of a suff¢icent number of counterpartstaff (para. 5.8);

(f) the content of the Implementation Schedule and Denhbmarks (para.5.10);

(g) the ES shall: (i) furnish to tho Bank not later than May 30,1993, regulations for the distribution of computers to ldividualVM8 field offices, an Implementation plan including crlteria forthe selection of such offices, acceptable to the Dank, and (iL)carry out the distribution of computers and related equipment inaccordance with the implementation plan (para. 5.13);

(h) a mid-term evaluation would be carried out not later than October31, 1993 (para. 5.14).

7.2 Conditions of effectiveness would include the signing of a contract foremployment of technical assistance for the PCU and appointed qualified staffwithin the PCUl to work together with the technical assistance (para. 5 22).

3. necommendatiL

7.4 The proposed project provides a suitable basis for a Bsank loan ofUS$70.0 million equivalent to the Government of the Russian Federation.

36

x 1

am am iwo 19i0 1? It 1, W

41 Notes Finl Meal Fems at_es ft ate t ales ea_te" ftts roatesIn a InU n S fn tk In 1n _m Omthe n thIsme Om Yn ftkn In thn In thas

TotaL 100.0 48.$ S1.? 25,776 21,600 31,23 34,314 32,503 35,138 31,707 33,92r

IndLtry 3.1 52.7 47.3 10,310 9,196 11,439 11,106 11,99 11,105 11,456 10.27S

Agricltuto 8.2 60.2 39.8 2,997 2,# 3J,295 2,402 3.462 2.367 3,256 2,155

iWtviwtture 0.4 81.4 6.6 26 * 223 5? 24 54 192 44

Cauutrsmtlen 11.6 74.2 H.8 I8'm5 1,14 4,734 1,974 4,875 1,901 5,760 1,98

troWPort 7.5 75.5 24.5 3,495 1,230 4,53 1,518 4,750 1.578 3,736 1.211

Ccuirdeiotn 1.4 29.6 70.4 221 572 2?9 d8 281 694 263 62?

Tre, n"Ouromst, .1uatelat &Teu_isal, o tae, a Stwcr 8.5 20.0 80.0 "99 3,518 1,119 4,469 1,2C8 4,539 1,118 4,4J3

Infar tios & Cate. 3vleos 0.3 18.2 81.8 - 35 64 34 89 32 144

Odber ofbtofatPreidut1o n 1.5 U2.? 4?.) * * 300 4 441 456 514 461

N-qsl ad rdaeolpal meY 4.6 47.4 52.6 Ws 1,030 1,2I5 1.462 1,360 1,5m 1,632 1,508

Pdt1c beatth 6.0 17.2 82. 360 2.51? 516 2,82 5J5 3.011 674 3,248

Oftat1on 6.7 21.5 78.5 1,05 3.403 1,039 .7m 1,052 4,06? 1,281 4,458

oultte 1.J 25.4 74.* * 174 5* 170 582 220 65s

Art 0.4 44.6 553 2nS -* 46 130 107 131 111 13J

Soe 4.4 40.1 51.9 1,1J0 1,115 1,564 1,606 1,532 1,676 1,402 1,515

eJCgs4iS nd PMitle ssntuwA 0.6 96 0. 200 49 35 43 354 38 358

Ptlco and SeesMce _g 1.3 32.6 67.4 29 486 396 M f 397 96a2 M82 52

Sourcees Suslu _ Gs *s qat ot1tol ywtrheak RatI1nal _wuro of amis cs 1970 Onm IWO_.

37

EX2Rsian FedationTable I-St Ofstributie of tlom t by raTw of Orglttioa ad by Srtor

1985 196 1987 t 1968 1 1990 1991

(In lilotln)

State enteprise 60.2 0.6 4.5 67.9 6.7 61.3 56.8Cooperativos for prodection & servies 0.1 0.4 1.8 2.6 2.7Cmierr cooprative 1.5 1.5 1. 1.6 1.5 1.5 1.5tessed enterris 2/ 2.8 5.1Joint stock coptees 2/ 0.2 0.8Joint ventures 0.1 0.1Kolkhhoe 4.S 4.4 4.3 4.1 4.1 4.0 3.9Private enterprwces 0.7 0.7 0.8 1.0 1.1 1.2 1.7ote r2. 0.8 1.0

Total 74.9 75.2 75.2 75.0 75.2 74.5 73.6

(in pent)

Stete eterprises -91.1 91.2 91.1 90.5 s.? 82.3 77.2Cooperatives for prodwctfon £ servfces 0.1 0.5 2.4 3.5 3.7comsuar cooperatives 2.0 2.0 2.0 2.1 2.0 2.0 2.0Lese ntrprises 2/ 3.8 6.9Jofnt stock copenes 2/ 0.3 1.1Joint VWenturs 0.1 0.1Kolkhoats 6.0 5.9 5.7 S.5 5.5 5.4 5.3Private enterprices 0.9 0.9 1.1 1.3 1.5 1.6 2.3onhers2 1.1 1.4

(in percent)Eaplptuent by Sector

Motorait 74.2 73.8 73.2 72.6 72.2 72.0Induastry and construction 41.8 41.8 41.8 42.6 43.0 42.8Agrieclture and forestry 14.3 14.0 13.8 13.S 13.4 13.4Transport and cr_nfsatifn 9.8 9.? 9.3 8.4 7.9 7.9Trad end other aterial service 8.3 8.3 6.3 8.1 7.9 7.9

Non-raterfla 25.8 26.2 26.8 2V.4 27.8 28.0Scence, edimation, hestthesre, & culture 17.9 18.3 18.5 0.2 19S3 19.5Gownwmt 2.4 2.4 2.4 2.4 2.3 2.3Nmicipal andother nonaeteriet soervices 5.5 5.3 5.9 6.0 6.2 6.2

Sourcest ussian Federation Gcokosktt.

1/ Provisioel2/ Untfl 1990. the avale statstices de not soperate this catoory from th stat enterprise

category, implying that the sie, of th tte is slihtly oerstated.

38

ANX 3Page 1 of 4

EYPLMO'ENT SERVICES AND SQCAL PROTE9TION PROJECT

Descriution of the System of Unemployment and Related Benefits

1. Throughout most of the Soviet period, it was illegal for individuals tobe simply 'unemployed". This situation has changed in response to emergingrealities, and since mid-1991, a system of providing for the unemployed hasbeen evolving. This annex describes the system as it stands, highlighting themajor problems.

2. Responsibility for unemployment and related benefits lies with theEmployment Fund, which came into operation in July 1991, as defined by theEmployment Law. It effectively operates as an extra-budgetary fund, which isused to finance and is managed by the Federal Employment Service.

Reynue and Exenditure

3. The Employment Fund has two primary sources of revenue: (i) 1X employerpayroll contribution from all enterprises; and (ii) budgetary transfers. Inaddition, the Fund may receive voluntary donations.

4. Contributions are collected at the local (rayon) level. Of each 100rubles collected, the rayon is to keep 45 and transfer 55 upward, where theoblast keeps 45 rubles, and transfers the remaining 10 rubles to the centre,to the Federal Employment Service. In practice however, neither the collectionof contributions nor their transmission upwards is wholly reliable.

S. In 1991, the Fund recieved R 2.1 bn. from contributions, and a R 1 bn.budgetary transfer. Given low levels of unemployment, at the beginning of1992, the Fund had a positive balance of R 1.5 bn. This is unlikely tocontinue, however, as the projections in Table 1 demonstrate (Rutkowski July1992). This is discussed further below.

Zl1blit

6. Under the EmloyMMent Law 1991 eligibility depends on satisfying tworequirements: (a) at least 12 weeks work in the previous year, and (b) anactively seeking work test. In practice, benefits are paid upon satisfactionof (b) alone, and new entrants, for example, do receive benefits. Thelegislation is unclear with respect to the position of individuals who quitvoluntarily, or dismissed for disciplinary reasons.

7. Benefits are paid for a limited duration only: 12 months, plus anadditional week of benefits for every year worked over 25. Benefits arewithdrawn if recipients refuse two appropriate job offers, although they arestill able to use the Employment Service as a source of job information.

39

ANNEX 3Page 2 of 4

Befit

8. Benefits are generally paid on an earnings-related basis, which involvesextremely complex methods of calculation. The rates vary over the 12 months asfollows:

(i) During months 1-3 - the benefit is 751 of the individual's averagewage over the previous year;

(ii) 60X of the same between months 3-7; and

(ili) falling to 451 for the last 4 months.

9. In addition, there is a minimum benefit, equal to the minimum wage, forindividuals from low wage backgrounds or less than one year of service. Theminimum benefit is incroased quarterly in line with general price changes.

10. Ironically, in practice, virtually all recipients have been receiving nomore than the minimum benefit. This is due to the absence of indexation forearnings related benefits in a high inflation context which renders lastyear's nominal earnings virtually worthless. Moreover, there is real concernthat the benefits paid are too low - probably only about 252 of the averagewage at the present time.

11. Supplements are paid to unemployment benefits in the followingcircumstances:

(i) Training - a scholarship at the rate of of 751 of the individual'sprevious wage is paid for the duration of the course for those with at leastone year's service. Otherwiso participants receive a scholarship equal to theminimum wage.

(ii) Dependents - Each dependent raises an individual's benefit by 101,up to 1001 of their previous wage.

g^iitratLve Arn t

12. The Federal Employment Fund is managed by the Federal EmploymentService. It has no separate Board or existence on its own (unlike, e.g., thePension Fund). The MES replaced the Bmployment Committee by virtue of aPresidential decree on June 14, 1992. At this time, the link with the Ministryof Labour was also broken. The FES is a separate ministr-level agencyresponslble for providing overall leadership, policy direction and managementto the national system of emloyment offices and services. There are some 88oblast Employment Service organisations and 2,121 rayon employment centres (atthe local level). The latter deliver the mandated programmes directly to thecitizes, e.g. registration for work and benefits.

40

Page 3 of 4

13. The FES itself has only 80 staff at the centre, which is intended toexpand to 225 in the near future. The total number of staff at the oblast andrayon level is approximately 14,600. The current capacity of the service tocope with the projected unemployment crisis is doubtful. It must, in arelatively short period of time, develop the whole range of policies,programmes and procedures and administrative systems needed to support thetransition from a command economy. The project aims to provide technical andfinancial support to the employment services in priority areas to help enablea successful response to this challenge.

14. Every applicant has a Work Book, into which the enterprise copies (byhand) the individual's work record. This Work Book is the basis upon whichmaximum duration of benefit is calculated by the Employment Office, down tothe last day.

Problems with Current System

15. The system of financing is cowrletely unsatisfactory, the major flawsbeing:

(i) The inverse relationship between revenue and expenditure needs, sothat there is real concern that the Fund will not be able to finance benefitsin the face of predicted rapidly rising levels of unemployment.

(ii) Lack of capacity to shift public resources from oblasts with lowunemployment (higher revenues and expenditure demands), to those oblasts withhigh unemployment. The central Fund is too small to permit such aredistribution of resources.

(iii) Proactive programmes, which are financed from the same Fund, arelikely to suffer cutbacks just as the need for such activities increases.

(iv) Poor compliance by employers and local authorities with the law,which further weakens the ability of the FES to assist areas of highunemployment.

(v) The method of calculating benefits is timeconsuming and ultimatelypointless in the present circumstances of high inflation, as everyone ends upreceLving virtually the same benefit. The present approach is alsoadministratively unfeasible in the face of a rapid expansion of unemployment.

Reform Proposals

16. These problems are recognised by the FES and the Medium Term ReformProgramm, and at least partially by others. The Medium Term Reform Programme

41

ANMPage 4 of 4.

does see the need to integrate both unemployment compensation and aetiveemployment policies into the budget.

17. One proposed amendment to the existing legislation would allow thetemporary use of flat rate benefits at two levels, linked to the mirmum wage.The upper level would apply to applicants who have lost their jobs, and onlypaid for six months. However, the Supreme Soviet is not sympathetic to thetwo-tier proposal. There is also resistance on the part of the trade unions.

18. Another possibility is to divert part of the large surpluses beinggenerated by the Pension Fund (which collects a 32% payroll tax pluspenalties), to the payment of unemployment benefits. This was suggested in theMedium Term Reform Programme. But it would be difficult politically.

Am=E 4page I of 4

42

* _t~Awf

o _ ~no$w aFI ast4 tmm~w - - ocn&eoowus.30

Total of l of * ot*tt 0m *"n " Ttl Bse" Du e w. f Loca

' tlt CO" M. -1 a a 2 4 s Uost Codte osts Cost. Costs1. 1a 1 CoOuII?W 16425 1S 9% 91%

aeutiue Sewvicfoieet 1%. i eotor 4 300 3.3 s0 o0 0 10 10 3s093o,. Plantg BSwtl */W 30o 1.31 so 10 10 10 so 230tiaauoial not. impot 0/le 300 1.21 so 10 10 S0O1 310n<puo $"todw axorLoh" .so so is so 2soo 5Cmuelvtmeipet l 6Veer 30 .110 10J 30 50 10 3*0 °

woauwsu_t ort /Itmh # 3 10 0Spe. Services/ Txbl -o,,tla# a/math as is 7U is 71 71 7n I71

adainttrativo. trael etc. lumwm 1S1 1 3000 300 3400 3000 3000 11000 100%

Sbtoal $322 33S 371 337 327s 164312. SaU" 0 10104 7.9% 9% 91%

Consulting SiorcOletme uNsnamut imeWt */Math as 6 In 71 so 2000o1eral 8t IrS. oert a/ath as 7#s Ts 1SO?T9. aUds/Audio Via1l ibtt 5/Ustb 3 4 71 31 100hr. specialiste eta. (311 Ip_ 414 1 414 41

Stal f Sg. program &W SO10 1 11t it40 110 IIG 1II6 so woo 100Tralaing Coster f.Ma 3*00 1 760 740 740 I60 740 3000 100%

Subtotal 414 141 3Mi 170 1120 1920 101043. ZMft6Ct DKLIV Of BMLOI44647 33.9% 66% 12*

User 8staf Trlaing rO t. 1 _u 300 1 300 300User ?rno. 8". e Counr-wid ne. 100 2 1 I0 1O S00toe 1cal staff taUiigVW VAtf go. 10 13 40 40 120 20% 60%obleats we. 3 *0 s0 so 160 20% 60%xlule tatiofl tceaewAseistoace (PM lumpoum 114 1 114 114initial CO.utlit tioa 1mpsom 350 1 210 250Nis PragrttoFn Lumpsm, 5430 1 106 to1 1004 104 1066 1420 19% S1*

subtota 344 1674 1374 1064 10*4 1064 6664

ter Lpllcattan - Emetlonuardwae a Speco.Aperts e/ler 280 1 10 10 *° 10 300User-Data Proess L tAalm c/veer 300 1 10 0 10 10 200technia uterace t.bav (go M. 0 I 30 10

Too. aet. Wbrrlee (OblteW go. 20 80 .00 080 1400Uquu t (o) 3. 143 1 142 142

Sbtotl 143 330 son 100 tO0 162SquipstComputers no. 1S6o 6 4673 11632 11S33 a64 14600Preparation of SIte/Vctlitie 1 _a Mc00 1 400 400 400 1200 30% 70%V2 MChtn g0. I 1 1 IC_npter Supile. a Nie. iemsm 30 I 30 t0

Subtot 401 19 13332 11632 6344 34031 27.2%4. n3 UBpa rU OLct mN

_muoiwt nT8m 723 0.55% 100l 0%Prgo mi uti a

Stet GaatZlCoasultant SevitcProgm. rim 4 suftet

Poulataon s/mtb 31 4 71 3 140tistnoa Cat.rol/Agt.tnSm.

stwoo. s/Math a1 4 75 21 tOOSullosuhi (1 x mths) /asath I 3 lahnsoamt $txengtheafl (9"9 t _)1 1t1 I t O 110Statft 3

SuoAtal t1O 143 s0 22

ANNX 4PaGe 2 of 4

43

tantinu*a ~ ~ ~ ~ -t

fteo_vN zvaluatloa 0 0 000o)

atal l et *2 at tIt en tsotl fap. V1 rt

nt Ct Se. -z 1 2 3 4 5 Cts Css t atT Costs Co4. 118 2.2CR 148? POIO AMP1

(contInued)

Research.BSaliaatin4 SuliC

.2.b Ve%., ltch$ilon aPlemet expert 46"th as 3 75 75

Itesting * Counselling Ixpert slads" 35 3 vs TsPvaroga "signa hiw.t s/moth as 3 71 iFelloehipe (M2 mont" a.) * 1 2 24 24

subtotal 324 324

~lIoat 8ervc Oversigtmaement CpeitY

sultnt sorveeploWeat Service 1St. mprt *lmth as 3 75 75

Fellowship (1 x 3 mwths) shouth 12 1 12 12St.af: 2

Subtotal 01

PUS NOW 2tK ,3RVIU 6136 4.6 1004 045.1 Model Loa IUplOV1t Office

Consutiag servicesTeam Ladr s/mnth 21 6 i1 75 1S0.Tob Placemento VAtchinDvloent expert s*ontb 2S 6 T5 71 110Progrem Savic to clients- Proactive bprt b/smith 21 6 75 75 Is5Pentts IlglbilityPtoesetna gPmsntexpert s/mot aS 6 71 71 150

eneal Systems Rprt - geaContribution Requirents *1ash a2s 4 75 7S 1SODocuentation-MaOel ImportV/Staft Ttaining lXdes Sdills hsuth 2# 5 71 71 10lellcwehipe (2x2) s/Month 12 234 24

Subtotal 410 474 *24Oevt.ot SuPr/_Of5t Asst.4

Relp to .1lt job mar idoeConsulting servtoeSpecialt eiuth 21 3 TS 75

Subtota 75 75

1.2 LOW-?*= System - t.Lon-4.au Plan Plantni mSpeellits

(s persons 4 me.) s/mOt as 30 0 121 m 1001arw&ar Spcfitcaten 0erts(2 persons, I months) aAmoth 21 iS 1S0 1N0 11O 450

S8stems Deveopt ImOrlts(10 persons, 5 month) S/mont as 1e 75 7 20

Sbtot s0 1031 12m 2s10

gqipomtProtatlw, Mu*ar uumnt

Owt. a Testin lo 1w00 1 1000

subtotl 1000 1000

1.3 Man eoff ResOnSe CapacityConsultant SeviceRapid Respons Unt _ner o/month 21 2 71 *

Rapid Respon" unit Propeo. s/mon" 35 n is 75

Doeset lxprt eawth 31 2 T5 71

11e12wolp Oversea (131 motf) sImUtb 1 I 12 12

IMp . aiuatmt Spes (gm 1an 3s 1 a asSttts S

St"" 3sn 3 243

AM= 4Fa8ge3 of 4

44'j

UPta4IW SMICES mm SOCIL Coft8O P5090"eject **St astlate

(Wood)

Total * ot *o fOVolt PIP Onahtet Totual Sae hf, otr. &00a1

'nit oeat so. -i 1 3 3 4 5 Cosot s oet Costs Caste CMteF8S Am avtas(continuedS

5.4 PublQ S e hpolqomnt ProgrmConsultant 8azvilaTeaOM tad/Proarem t. /4wntb 21 4 21 7S 100Progm S_o./progrm ap. a/sMath 21 4 S 75S 100Procedure DOM. 804_- a/month 25 * 21 71 *00Staff Trg. Materiale lrpest a/month 25 4 2S 75 100Uplnt/Publlo Na. pOD. (DM lulm) ua 21 1 21 2sstaff 6

subotal 25 100 300 425

5.1 Speial Acetats e tometlmonly teonmicllylevatated aream - Pilotonultant Service lampum 100 1 , 121 121 125 125 *00

SubtotAl 125 12S 121 125 500TLAM MRl? INFOPlOM S?SfM t1os 1.45 loO1 o0

6.1 ccupatioa Mallet. 4 Claoelifcationa Local Lebor Martet InfoMatian

Consultant ServceeDEerto (2z6 mo.) a/onth 25 a so uo5 200lellabshipa (2 X 2 me.) lumptum 12 2 24 24Staffs 2

Subtotal $0 174 2246.2 Labor Markt MoitoorlN/Su

Conultint se.vi8ceSurve_ lumpem 1000 1 200 200 200 200 200 1000VellwhlSp (2 s a MoD.) a/lonth 12 2 24 24N/Sold 04"ey\fGou Mtg. P) lumpaum 60 1 60 6OStafts 2

Subtotal 60 200 200 224 200 200 104

SquuMetOffiSc Iquuimt and Matertal fSt

115 offices lampm so0 1 100 S00

Subtotal 100 1007. SuKOYND YUXM 10014 9.25 a25 195

Tra Programonsultat Swice

Policy TeenTgg. Picy a v#t.qps./Tym Lea s/year 200 1 so s0 50 S0 200nt a Contracting Spotalint s/year 200 1 S0 So S0 s0 200PtrgaS TeamAult Traing Spec._-esm Leadere/yraz 200 1 S0 S0 s0 S0 200Occup ^ai AalJalseiAbor Varke

survey SpeiaSlist a/yea 200 1 50 ' -50 so 200Progam Develoment Spe1iailst a/year 200 3 150 150 150 150 600

Traini waterial. troduwtIon Sp s/yser 200 1 s0 10 10 S0 200Tranin of Traine SPaci8alt *amth 25 6 7S 71 1S0

allowlipasITraining Policr Mat) a/month 12 2 12 12 24Piacl Q Coatraaln Prcaduree(4oa/onth 12 4 1S 12 12 12 40TrainingProgrm (61) ae/IAth 12 6 12 12 24 24 72 25 755StatfT5slatione/tocal Conbultants 1UM_M 3.5 400 S50 350 350 *50 1400 l005TSaig Ptos. Secialist (PM lump..m 71 1 75 75Carricla Oevellmeat (PM tumpsai 245 1 241 245Staff

Subtotal 320 774 49 973 796 3614Squi_p t (se tootnote.)Pully elSped locationS lb. 45 so 100 is00 3400Minz ialy equvpd lationS uSo. 5 300 710 n1 1SO0priting/ublioatins 1p_m 1 2000 So00 S10 SOO 50 2000 705 305Office equpmet lumpaun 100 t00 100

SuwbtOtl 600 3050 3010 500 7200

ASE 445 Page 4 of 4

wwmw smtcu mm SOIALme o =UP0!3U izaVimAS D 800121. P013ZW13080970360 oat Sstlu44s

(U8#000)

atai %Oot Oaf aof*nit 999m Qurters Yatal ea" 8a. Sar. Locl

oult COst go. -1 1 2 3 4 ostst s costs **$t. C0to CoatsS. N1a6Y0f ay 800ct1 mS@N0TZ 7120 S.40 100% O%

Cansi4ta&% 8*4,3*058. x*Asnw*/0t so so r ust 01ca s.o* Io so s o seKalva eSttwx 8p.lliet sI,wr 200 1 50 50 50 50 200Date/eado/Operatis S"stm- Installation 8wc15t yee.r 200 1 0 so 50 50 so 20O- Ya1ea_iaaicatioas Specialist s/Math 25 4 0 75 75 150Benfitt aetin. pecnlst */Math 25 4 0 75 75 150

B_nfit Volley*e"lallst (2 x 7 sos.) /*Math 2s 14 0 50 150 150 350

sahtotal 0 100 150 400 400 1050

CoNvaters go. 6 00oo 4000 e000Aeforonce LIbrares go. 4 5 20 20

subtotal 4020 6020TralniaoIudtildi4e (2 fru each Oblast)4 tfm3a4%tuxt*n go. 10 S s0 s0 10051

subtotal s0 509. 1O3-'fl ma OF a1 £WN 5002 0.00% 100ooo 0%

ssa mstStft Lwa_sv 400 1 200 200 200 *00 400

subtotal 200 200 200 600

Subtotal 1100 8064 21916 257S2 240*4 16041 9ass7 89697 0

10. Salas" 1.00W5553300 1 4460 4660 6660 6460 4660 33300 25.2% 0% 100%

Total Rass Costs 1o0 11114 UPS 32442 3074 23501 132267 132287 100%

wtinesn1sz 84 154 17S 166 15 113 713 1%

Total fto3ect Cast 1500 S600 2*730 32417 30910 23636 1)3000 133000 101%

Loss-Ung csultants 0/yer 300 s00 800 800 700 3400 3400 2.6% 9% 9tshort-Tom Coas1tante /Aths 1275 1175 1425 1475 1650 7000 7000 5.3% 9% 12%Cosutast Contrct 1_ssaft I5 500 525 521 52S 325 3750 3758 2.8% 100% o0

Y.cnaal* hoSIstanc 1358 207S 2SOO 2750 2*00 2675 14158 1415* 10.7% 100% 0%£ASistrttw s Uea I%Mpeo 3000 30*0 3000 3000 3000 15000 15000 i1% 0 100%Publicateln ?raaslations Mianth 350 350 350 350 1400 1400 1.1 30% 70%Fellovshpe *Iaoath 24 0 96 48 48 276 276 0.2% 100% 10o

vute 401 11191 12232 11*32 726 43021 43021 32.5% 100% o0Cput.Lr Ibray otortial 20 *20 SOO 1440 1640 1.2%uss5 tpraratin 1084 10*4 10*4 1084 lO* 5420 5420 4.108qn3umt 142 100 3050 2550 5S42 5S42 4.4% 100% 0%Prlntlng/P lis*na 500 500 500 500 2000 2000 1.5% 701 300Traiaine Prooras 2240 2210 1920 1920 1920 10230 10230 7.7% 100% 70%

5 Staff (tse. only) 72Salai" 6640 4440 44O 4460 6440 33300 33300 25.2% 0% 100%

Totl B_e 06t 1500 15S24 2*576 32442 30744 23501 1322*7 132267

rice Cmntingencie fer tqulmt.. Bso/Pllsoa 84 154 35 144 431. 713 713 3.9% tO0% OoUd TrainioG OX010dift opUter) 705

Toal Oests 1S10 1540* 2*730 32617 30910 23636 133000 133000 713A. Unit COsta Ler U84hfmsat 8St1 tot Traii Progam.

7008M1 --1-- ------- Imicr@-ceuter fer class of 20 lb. 10 3000 3000Priater fet elas et 20 go. 2 50*0 10000VCR and uaitet ts. 1 1000 1000Ovonbead proector Vscren SO. 1 500 50080taure pI*ate. 5 SO 400

rnitu et a. 1 2000 200041t~ WA USdtw M. 1 1100 1100

B-. iImllY 3ipge LcticasVCII en4 oitor t e . 1 X000 1000overhea prolcto V/.Me lb. 1 500 500Sotts" ckage ft. 5 00 400tVatar. set ft. 1 S0*0 2000Var nachin Io 1 1100 1100

Sttal 5000

46

Page 1 of 8

1. sh caurret automation capacity of the 3 s extr1awly limited._araxe, software, staffing and fInaal resources ar na no way adequate tosupport the lmediate or long-rang need for _coputer or applicationssoftwr. Additionally, the premt wgaisatiol relationship (i.e. linesof authority) betwee the 1 and the Oblasts/Distriote a Local Officepreent some challenges to a conistent. united automation project.

2. The repoting relationshps withia the organiatLonal structure of thebederation ia the Service area prelude direct authority andcontrol of the N1 over the opeation of the oblasts/Districts and LocalOffics. ikewise, the funding flow structure limts the lafluence the PUScan exercise over the sub-entities. he a reslt the ablasts/DLitrLts arefree to exercise a great dal of inepndec i formuting ad exeutingtechnial and operational plans. Mence# compute systems delopment issomewhat fragmente, A proceeding irregularly througot the RV.

3. the InfOrmation System D tmnt wLthn the 1 consists of five (5)employees. Oblasts/Dietxicts have computer staffs, and ia se cases LocalOffice have computer staff _embers, as well. A numbe of Oblasts/Disictsare moving ahed with automatio plans, som ae waiting for guLdance andassistan frm the 1 and still othe "re presumably doing nothing.Consequently, a diversity of tehnical strategies age being pursued orconsidered.

4. tly apprimtely two hundred Local offices have some hardwarecapacity. The oonfiguratLos vary frm larg scale Mainframes wlth Wide AreaNetwork (W) timesharig capability, to sta alone PC's. The I8 haestabIlise a technical guideline (i.e. not mandatory) of I3K compatible PC'sand assoiated opating system software. Likewise, a varety of hardwareand software exLt in the Oblast/City/UstrLct and at the 13.

_M-M

S. An assortment of aplications system are i use in thos local officeshaving equlpment. Same offLes' use of the eqipmet Lncludes wofficeautomation.0 Pathe tha provding client sevice most are usiag the

47

Page 2 of 8

computers to register applicants prfom job watching an Ln a few casescalculate befits es. s_YteMs ae* rather paper and mnualintensive aN do not represent a truly "autmatedO cpablity.

6. It is Liportant to note that wlth the preset enviroament s dLversity ofcapabilities and the absc of centralised control over the automationprogram no totally unified strategy Le possible or, in fact, desirable. Withthe variety of conditios (organizational, technial and finacial) it wouldbe a mistake to dictate rigid tehnologial standards, operating procedures,appiLcatLons systems, etc. Prankly, it is not likly to be possible glven theindependene of the Oblats/Oistricts a fure it would tend to stifleprogress and constrain Innovation ln the mor progressve ablaste/DLetrLcts.Conversely, themre an opportunty for the 135 to provide guidelLnes to, andstimulate crtio n in, thoe Oblaste/Ditricts wlthout adequate staffor resources. It is hee that a unifled or standard approach would be mostuseful, successful, and financially prudent. ecognaing that anyFederation-wLde strategy will, of necesLty, ewxude some of the moreindependt OCblasts/Districts the attentLon of the 1 must be in thedirectLon of elevating the capabLlity an capacLty of the le fortunateOblasts/DLitricts. Th following nees for autmaton and asociLatedmaterials and guidance ar the ot critials

.schnLal l

7. Given the fact that mws OblasteDstricts have resources with which tobegin automation progrems it would be extremely useful to the PU5 to formlateand publish, not only hardware, operating systems word procesLng,spreadshsee, prograigpackae an language guLdelLnes, but also selected

standard data elsemnt format and definitions. Thes guidelines would offersubstantial compatibility for exchang of data, reporting of statisticalinformation, sharing of application systems, etc.

S. of major importance in the deelopet of computer appiLcatLons is theneed to asure that the compute systm os designed to properly interface wlththe processes of the offices Nowhere is ths ore important thn at theLocal office lel where the cllents are ftewed. there is a need for the 138to develop suggested Local Office procedure for carrying out theresponsibilities of the tocal Offloe. InitaLlly the noed is for manual andsemi-computerised procedures, but at a later date the procedures should beaended to refloet the automated step the eventul compute system willembody.

Oranatlon NW staffi.

9. Staff resoure to support the compts exist In some of the regLonaland local offloe, but are snial (S employes at the present) at the n3olevel. Th present limit of automtLon staff ln the M3 precludes adequate

48

D SPage 3 of 8

oversight and management of a substantial computerization project.Augmentation of the present Information Systems staff in the PUS ip necessaryassuring a range of automation capabilities and skills are covered. Whereasthe actual development of computer ystems can be accomplished through the useof outside contracts, the oversLght role must reside within the FRO and mustnot be left to consultants and contractors.

10. The second problem is the present confusion surrounding the question of"who determines the user requirements to be fulfilled by the data processingprofessionals?" A clear understandLng of who the customer is, in each of thesystems areas, is necessary. This role can be fulfilled by a steeringcommittee or by a single point of contact in each of the program areas in theFUS, but it cannot be left to the data processing staff to resolve theinevitable conflicts over priorities and schedules.

ApDleatIons mDeveloent

11. Of primary urgency, in light of the expected increases in unemploymentand the neceessity to process benefit payments, is the need to proceed quicklywith a short-term strategy to develop and implement at least minimal hardware,software and applications system nationally for Local office use. Thlishort-term effort must target the limited Objective of cmputerizedretgstration of the unemployed, calculation of benefits, and requiredrecord-keeping for benefits payments. The software and hardware for thisshort-term objective must be deployed immediately in order to prevent abreakdown in the overwhelmingly manual local office systems when unemploymentrises beyond the present capacity. (It is noted that the 135 has formulated aplan to select 2-3 applications system from among those 15 or so ln operationand to encourage local offices to adopt one of these system. This approachis the most expedient for achieving the short-term objective of quicklyproviding computerixation to support unemployment processes.)

12. Of equal importance, but somewhat leos urgency, is the requirement todevelop comprehensive computer systems to support the broad range of evolving118 and biployment Service functions and activities. System developmentactivitie should proceed indefinitely with full automation rqupiring 5 to 10years. This long-range project would require a much more deliberate approachthan the short-term unemployment project discussed above, and would require aformal System Development Life Cycle (SDLC) methodology be followed. Thismethodology should include project planning, requlrements definition, systemdesign, programing, testing documentation, etc. in conjunction with thislong-range project serious consideration should be given to two particularissue. The first is the likely future need to evolve toward a moresophisticated hardware and networking onvironment. The second area whichshould be addressed is the interrelationship between the 1B8 and other RPorganizations. There is likely a need to interface programmatically andtechnically with other oclal/welfare agencies. Requiremnts for suchlinkage should be considered at the outset.

49

Pag. 4 of ,

Hardware

13. To support both the short and the long-range applications systemobjectives a procIrement, or series of equipment procurements, is necesary.Rather than have indlivdual Oblasts/Distrlits buyLng these components.Federatlon contracts should be establLshed, through whlch theOblasts/DstrLets could buy and through whlch lnternational flnanclalasslstance could be used. An optlonal quantity contract speoLfying theminimum number of components whlih could be defLnLtely ordered, wlth thepossibility of ordering more, would be most desirable. The first phase of thehardware and operating systems procurement should addres the lawedLate needfor PC's, with a subsequent procurement to fulflll the more comprehenslveapplicatlons: In other words, to be compatible wlth the short and long-rangestrategy of system development, there should be both a short and long-rangehardware procurement strategy.

Manter Plan

14. It li clear that a substantial and sustained computerLsatLon effort isnecessary to support the immedLate and long-term program components of theP8S. These program components Laclude the full range of servLoes to thepubllc, such as regLsterLng the unemployed, processLag and payment ofbenefits, referral to job vacancLes and training, public works, etc., as wellas internal PUS management LnformatLon systems necessary to facilltaterecord-keepLng, statlstical reporting, financLal magm-ent and other lnternaloperational actlvlties. Investment ln hardware, software, applicatLonsdevelopment and continuing malntenance and enhLancemnt i cruclalt furthermorthis lnvestment must be made wlthln the context of a well formulated near andlong-term strategy.

Plan Overview

15. The clear and urgent requLrement is to deploy computerLsation capabliltyas quLckly as possible ln order to support the calculation of beneflts at thelocal offlce level. Other requLrements for comprehensive automationcapabLlity at all levels of the Employment 8ervlces structure certainly exlstbut can be fulfilled through a less accelerated strategy. Consequently, therecommended approach is to dlvLde the effort ahead Lnto two (2) dlstlnctprojects. The fLrst would be the mplementatLon of the enflts Subsystemconsisting of registration, benefits calculation and reportLng. Thisimplementation would of course be accompanied with the installation ofappropriate hardware to support the subsystem.

16. The components of the short-term plan are designed to accomplish threeobjectives:

(i) To distribute guidelines to the fLeld as quLikly as possLble sothat any local procurement are compatible with the equipment that will beprocured natLonally, thereby being able to operate smoothly with the BenefitsSubsystem to be distributed.

50

aR sPage 5 of a

(ii) To procure the first wave of equipment to support the BenefitSubsystem, and

(1ii) To provide the Benefits Subsystem applications software, operatingprocedures and documentation, as well as simple record-keeping software totrack mass layoff and public works.

17. It should be noted that the schedule is based on the possibly optimisticassumption that either there would be no substantive change to the presentEmployment Law or that any changes would not be of such a complicated natureso as to delay the completion of the adaptation of the benefits applicationsoftware subsystem.

18. Concurrently with the execution of the short-term plan attention shouldbe given to the long-range project of developing comprehensive computersystems. Whereas the full long-range development activlties are likely totake from 5 to 10 years, the initial phase would encompass a number ofpreliminary steps to address the organizational, capability building issuesand ministry-wide, indeed RF governmental-wide, inter-relationships. Theactual requirements analyses and planning phases of such a major project wouldyield the information on the specific components of the project, but ingeneral the plan should cover the details necessary tot

(i) fulfill the requirement of a sound systems development methodologywhile

(ii) covering the specific needs and priorlties of the F18.

19. Figure 2 is a general outline with a tentative schedule initiating theactivities. The actual scope of Phase 1 activities will depend not only onthe resources available but also the speed with which the YU8 can formulaterequirements.

20. The three (3) primary objectives of the long-rang plan are to:

(i) Perform a thorough requirements analysis

(Li) Procure full functioning equipment to support the broad spectrumof applications systems during the first three years of operation

(iii) Develop the first phase of the applications system.

Flnanglal Reirement

21. The funding necessary to execute the short-range plan and the initialphases of the long-range plan is estimated to be $35 K over the next 19monthe. The planning assumptions whlch were used to derive the financialestimates are as follows:

51

ANnnuK 5Page 6 of 8

Teohnical Assistance (TAr

22. It is expected that three (3) TA specialists would be necessary toprovide guidance to the 78E over the next year at a mLnimum. Assuming anannual cost of $125,000 for salary and annual expenses of $115,000 thisresults in $720,000 for 12 months.

23. One TA specialist should be devoted to assisting the FES in developingoffice operating procedures including mass layoff and public works automatedrecord-keeping to be integrated with computerization stepsl a secondspecialist is necessary for development of hardware roquirements andspecificationsl and the third TA specialist is crucial for computer projectmanagement assistance to the FES.

Short-term Plan

24. For execution of the short-term plan, a total funding of $30.5 X isestimated. Equipment requirements are for approximately 5800 PersonalComputers (PC's) consisting of 386 technology and associated Operating Systemand packaged software, each with a laser printer. The unit cost is expectedto be $5,000 or a total of $29 M. The actual distribution of the PC's toLocal, Oblast/District and FES offices can be determlned later but each officelocation must have at least two (2) PC's for back up/contingency purposes.The total assumed number of locations of 2,400 includes 7F8, 2121Oblast/District and the present locations as well as some expansion localoffices. This number of locations would be broken into categories of 200locationis having an average of five (5) PC's each; 400 locations having three(3) PC's each; and 1800 locations having two (2) PC's each.

25. Certainly the hardware installatLons cannot be scheduled simultaneouslythroughout the Federation; the hardware installations, as well as theimplementation of the short-term Denefits Subsystem are likely to occur over aperiod of up to ton (10) months. It is of utmost importance that thosegeographical areas predicted to have the greatest impact from unmploymentreceive the flrst installations; those areas predicted to have less impactshould receLve the later installations.

26. Site preparation costs are dlfficult to predLet but it is expected thatan average cost of $S500 for each location would be reasonable, resulting in atotal cost of $1.2 M.

27. Finally, trainirg costs for both hardware and benefits applicationssoftware are expected to be no more than $300,000 since a "train the trainer"approach is envisaged.

Lonn-Term Plan

28. The long-term computerization plan assumes consultants/contractors wouldaccomplish most of the work during the first phase, For purposes ofestimating consultant fees $1000 per day, including expenses was used and It

52

Page 7 of 8

La assumed that each month wlll result in 25 billable days. The planning taskis expected to requLre a total of 500 man days, or flve (5) consultants forfour (4) months. The hardware speclflcation task will demand two (2)consultants to prepare the RFP over a period of nine (9) months or $450,000.

29. The sytems development phase will require approximately 10 consultantsover the perLod of May 1993 - December 1993 for a total of $2 K. Finally,prototype hardware for development and testing is expected to cost about $1 M.

30. Coincidental with oversLght of the computerization plan FR8management must be aware of a number of issues whlih have substantLal bearingon the successful progress of automation. These Lisues must be addressed inorder to properly proceed with the computerliatLon objectives.

roLkLzation

31. In order to fulfill the requlrements of the automation plans, both shortand long-term, an organlzational structure with a clear defLnitLon of rolesand reqponsibilitles must be created withLn the 138. Of speclfle importanceL a structure which depicts the interrelations among the InS s InformationServLces department, TA specLalists and any companLes or consulting firmwhLch will participate ln the automation project. Further, the roles andresponsibilities of other 3S5 departments and the Oblasts/Districts vie a vlethe computerization project entltles must be deflned.

32. A second organizational issue is the eventual need to bulld a capacltyfor developng system wlth an approprlately sLzed nS staff. Whereas outsidecontractore can be used to augment the FES staff lt is best to create asomewhat self-sufficLent department. This wlll prove to be a necessarycomponent of a smoothly operating automation program, sLace lt will fostergreater responsiveness to user needs. Having capable in-house staff resourcesalso tends to offer greater rellablilty and depth of understandLig of theneeds of the users. FLnally, in-house staff are likely to be much lessexpensive than procurLng the servLces through outsLde computing servicescontracts. SLnce lt often takes anywhere from one (1) to three (3) years tobuLld a capable in-house staff, management should begin as quickly as possibleglving both attention and resources to this end.

33. Several difficulties lnherent in today's envLronwent deserve theattention of mausament.

34. The fLrat is the serLous problem a number of offlces have wlthlimited space and facliLties. Increases ln workload resulting from increasesin unemployment will necessLtate higher staffing levels and larger areas forclients. ThLi problem will be further compllcated by the requirement to wlrethe otfices for computers. WlrLng offices, whlch can be quickly outgrown andwhLih cannot be expanded will present challenges to managemnt. In general,

53

au SPage 8 of 8

each case must be handled according to the particular circumtances, but theinstallation of the computers should not be postponed simply to avoidinvesting in facility preparation when it is clear that a new office site willbe necessary.

35. A second area which will require the ongoing attention of managemet isthe need for an adequate staff training capacity. The difficulty of atransition to an automated environment cannot be overstated. Whereas soe ofthe staff will welcome automation others in the local and Oblast/Districtoffices will have a great deal of trouble adapting themselves to the newtechnology. The only way to overcome this problem is for manageme to assuredequate preparatory training and proper follow-up training is given. This

will be no small task since large numbers of staff must be trainedi however,the risk of having the computer systems sit idle or even worse, to be usedincorrectly, is great if proper training is not forthcoming.

36. Finally, a third area with which management must be concerned is therequirement for continuing support of computer systems. Once the system areinstalled the demand for support will soar. Technical guidance will benecessary, maintenance and repair of hardware must be immediately available,application software problems must be resolved, and consumable supplies mustbe avaiiable. The rural areas, of coarse, will experlence the greatestdifficulty in accessing the necessary technical support, but urban areas mayfind some needs can not be met locally as well.

olicym

37. One of the greatest challenges management will face with thecomputerization program is the continued consistency of the unified system.Just as some technologically advanced Oblasts/DistrLits will not choose topartLcipate in the unlfied system, others who do participate will want to makelocal changes to the system, thereby creating a non-standard* versLon. Theneed to make local changes will be precipitated by legal requirements as wellas efficiency enhancement. Over time, left unchecked, the unifLed systemwill have many, many versions. Centralixed control and support forapplications system and standardizatLon of hardware will erode. There is nosimple solution for this inevltable problem. St will become a policy Issue asto whether the 138 will want to enforce strict compliance with standardsystems or allow local alterations.

conclusion

38. Large automation projects inevitably encounter numerous difficulties buthave enormous potential for improving the capablIlties of the organizationthey are to serve. During the next several years the benefits of automationwill enhance the service delivery to the clients of the IR8.

54

Page 1 of 2

-s8a3MIT.flyjNy SERVICKS AND pOCIAL PROTECTION PROJECT

Proiect Coordination Unlt

1. ManMomennihStructurh. The final authority and control of a proposed projectis by the Head of the Federal Smployment Service (FES). The day-to-day operationsshould be implemented under the dlrection of his principal Deputy. To providesupport to the leadership of F8S, a Project Coordination Unlt le to be established.The Project Coordination Unit will be responsible for the overall coordination andoversight of the project and for its successful implementation. An importantobjective of the PCU is to enhance the capacity of the FE staff to manage andcoordinate an active employment service program. Therefore Russian counterpartstaff with a co-project manager is a key part of the PCU. It is expected that thesestaff would be able to perform project management tasks in future World Bankprojects without the need for international consultants. The PCU staff levels, bothforelgn and local counterparts, would be maLntained throughout the duration of theproject, with levels of staffing and terms of reference acceptable to the Bank.(Pilot actLvLties in the MBP would fall under the dlrection of the Minister, whowill follow the design and evaluation of programs.)

2. ManugMmD t ison. The PCU would be responsible for project management andcoordinatLon, as well as trouble shooting as problem arlse ln the carrying out ofthe speciflc TA tasks, whlch would be triggered by the failure to meet specifiedbenchmarks. The management functions would Lacludes (L) coordlnating the executionof the project operations schedule including performance benchmarks and contractorreporting procedures; (ii) provldlng contractor monitorLng; (LLi) ensuringcoordination of the related TA task actlvltles, e.g., user requirements with theautomation design; (lv) preparing overall project progress reorts; (v) providingcontract financLal oversight includLag financial reports; (vi) advising onprourement proemdures, etc. whero ub-contracts, including RussLan suppliers may beinvolved; nid (vii) a full range of other general management and administrativedutles requlred in carrying out the overall project. Glven thli set of functlons,the Laternational consultants, skills should be largely in project management,rather than the technical tasks being undertaken, since the latter expertise liesmainly in the TA teams. There would be five lnternational consultants, and eachwould brLng, beyond project management sklls, a background or knowledge inemployment and training programs. The five international consultants would includes

(l) Project Management Director with skills and experience in overallproject managment techniques and practLces;

(ii) Project Planninag Monitoring and Reporting Expert;(LiL) Pinancial Management and Control Expert;(lv) Computer system _ xpert;(v) Procurement Expert (part-time).

55

UMLA^ Page 2 of 2

Consultants (i) through (iv) would be involvd for the full 15 months of the projectand the fifth would be available for the first two months of the project to assistin the initial procurement activltles. The four RussLan counterparts would begeneralists with promLis of belng quickly trained in the related project managementtechniques.

3. The overall Project Implementation Schedule would guide the implementation ofthe project and facilitate the necessary coordination of tasks, monitoring ofprogress as well as problem identification and resolution. Thus a key task of thePCU would be to develop such a detailed schedule. The plan, in a form of a projectwide GANTT or PURT chart, would be drawn from the component terms of reference andthe executed contracts' scope of work. The Terms of Reference and the aongluded&echnigal asZai ngnrae would clearly identify the tasks to be performed; theproducts to be delivered; set out performance timetables; and, detail the basicadministrative elements such as reporting and procurement/fiduciary requiremnts.The Project ImplementatLon schedule would contain the overall key benchmarks,critical paths and other information through which project progress could betracked. Critical linkages and rolationships between the individual technicalassistance efforts would be detailed therein. A key role of the PCU is tofacilitate coordination of Later-dependent project elements which cut acrossindividual oontractor activitLes, e.g., employment service user requirement with thecomputerization effort.

4. The PCU will directly strengthen project MaermLsiJ.n in several respects.There would be a contractor reporting system with periodic (monthly) technicalassistance proress reports to the PCU which would forward them to the Read of the1B8. The report format would be designed by the POU and would relate to the Projectmplefmentation Schedule. A PU monthly summary report would highlight problems andissues, reccgnded actions, etc.

5. Similarly, an VW reportlag system with periodic (monthly) technicalassietance progres reports to the lank (and other Russian authorities, asappropriate) would also be established. These reports would be prepared by the PCUon the basis of the contractors, progress reports noted above. There would also beperiodic INS financial reports to the Bank based on the Dank's existing requirementsand procedures. The PSU technical assistance progress reports to the Dank wouldidentify and discuss the key policy issues and other major problem which havesurfaced in the contracting reports or otherwise have been identified. Asappropriate, the Dank can provide guidance or other assistance, or take up mattersunder the ongoing policy dialogue.

6. Given the POU's overall project mnagement and coordination role, the PCOUshould be independent of the component project activities. The PCU should alsoprovide assistance in arranging translation and interpreter support for the projectcontractors, as well as providing "heavy duty' reproduction and other projectadminstrative support. Additlonal Russian staff to carry out these functions wouldneed to be provided.

AIM7 PageX of 8

aims" 80

s-Quarter 1 -Quartr 2 1 -@itr 3- i-Qarter 4- l-arte5- Iysgmo.j as±.taoe mUgeatOet-UW-O Sam Veb KmAM ay Sua.Tul- MM #pt act Moves. Tan go Mr Apr1_-_2----11993 -- -…1993-…- _94 1994-- 5

tsoj oto*4 i mIttI

fAitt mmalaW lUli

Sa tbr Ft. psl.& Mt. Cagelaty_ liaPnal", mCeto ly 1ste

- lommat l_rvos _ast.. owve/gt Caoalty I

- eamaz1 Uvaatioa 8 Policy Devpt.

- NM"s Lsal &*opaet "flowe- Mass Lmapof tMas a caacity

Pt- Of tommmcally Dw"tated ares

Mbor Markt ofezmatm yt P _ I-aes &9l &evel tol a , teab e -stagff Wraina-Pamois of Private a pablia jobs I ... Acreation progress- Ocoupatiosal Classifiastl S ys-Lambor market Muuitori*a/eurveyd/Peverti, Lahow I~

eloyaet Pralaing l _

Ministry of 5.aial Protectiwa, -

-m Tom DWt PI Lllo z|

PCsa nd Visal Ad1 ito/ ilities Preratin .e *

Caspater Ueelopaat/aiplioatiosaI.4Mscwmtiau

- MM%bWO ?..4'a.on

- Vser Data (oa*ss.sl.o

- yteas Dvwelopmoat

Irvotoepp Rardemar Develapset a vesting I~

AM387 pag 2 of S

LOS~3 O F-wna~Product en ActivitIes to be comleted bycontractors wlthli speaific tioframo

Y03 350131011. 3sSISYA' ' - P&Y Cei"iUcSNO. c aPOEE

L.. we 803 000oID3&aYZo m3! signin of contracts withb PM VA prior towi11 rman In place for the effee by Jau"y 1993duration of the proeats will Sstablisbmnt of PM/staff 01-Feb-93 tbrough 30-Apr-14cotinaly updat proae5Ze" Ptoject Qperatia Crogrms 01-Feb-93 tbrovgh 30-Apr44to develop effective projeot - Coordatla of 3) componotsinfomatio magemet sytem - M. 1. a. 4evlogmet

_ Fisucni Aditn- eporting Procedures

- rocuremoat IVaing

2. .AP? YUMU UN!! Nstablilsbmt of StEfffraM Utit 01-eb-93 through 31-sy43Unoordnatlon of ft compoents and

will engage la comprehewive Developmt of staff ttraing strategy: 01-Feb-93 through 31-Jul-f3staff training at Provide Facllities a 8quipuent 01-FE-93 tbrough 31-Jul-93headuarte, regioal ad Netablish sta fraing Support Capaaity 01-Feb-93 through 31-May-93local level offsces of the framingw aterfal require_mts and aids 01-ap-93 through 31-Ma-93V8.

3. Bongo= DU rID OF Feblicatioc of procuremt documents 01-Feb-93 throug 31r-93 .um.oi 38311018 P>thlicatioa of Gtideline and Standards 01-Feb-93 through 01-Sep-93staff fraing 01-Feb93 through 30-Sep43

is designd to met the Iustallation of Iquignet 01-Jun-93 thrwoug O1-ov-93emorgeny needs of the 83C to computerlsed registrtlat 01-Ju-93 througb 01-Ju-94process unemploymet benefits Automated benefits calclation 01-jun-93 through 01-Ju-94claim axd to devise a shortterm automatlon plan.

4. PMS - la0 lam"! POLIC ANSD Analyze existin budget and sYstems 01-Feb-93 throadh 31-Ma-93I _NAGUN SYSID Identlfy needs and posslble improvemets

Progrm planui, budget Make rocommndations on nowformlation and fnancial sand processescontrol sstem iwludliw an Prepare rPort for FBMaudt capaclty supptted by Seaure FE approvalan K.I.X.

"Slit M ia implemtation of 01-apr-93 through 31-Ju-93teised plan

support VWI in prepwrig syte , o0-apr-93 tbhouog 31-Jul-93processe, tools a staffdeelopmet

eplormenat services Analyze existing eploymt services 01-Jul-93 through 30-Sep-93managemet and oversight program - policles, oversightcapaelty including a. program capacity and multoring procedures.Performance revlew capalcty Mevies program elements.

supported by monstoring Lncorporating evaluations____ >>lures. *Prepare report and secure F8s approrval

AUll t 1ge 0f S

products adActivities to be _oseleted hiosetreotmer withlo specifc timefreme

againgm|eeo t,n _fl C t

111. _ ta u _ _ _ _ _ _ _- - UM MI MiOLer mm sit MI& relattm of 0 3 trou 31-Dso-93

tostimos) 8urt VW tsees l"g Xspeot of

Develop smim to losecpoate,

rai 8Staf ad bild their suport

Sesear, Uveluatio ma RI_earh policy dovelagmet roc 0l 43 throug 30-a"e 3Polcy dro"lo t IF sp rogrm Saperstia ewauaticsSuppwortd by a progrides MU Asses" the proraxm's dsvoelopmet capacitya"d devlemat apeity. Prepar reprt nd se 3 approval

A"it VW in of e0-S 3 tOug 31-POs43reisd le

_upot mmi assls epest of- -ru

movelop m_aims to lcorporate.~~~~~~~uou program amsIaaStaff md build their spoft

_ _awmmnl ofttl1ssSao" aloginmt Svalmaae, osstiao osatamn Minpemm a

gs. dote em be *" n msupliaoB Vill be eSIMI e etd to-S oga_sied, to most diVer A"*" mtemetioe Needsseedsad ofesel eoupismot laes ter"e report for 1

sevis An Saepg tigrooomdatlass

aMi Mastom" *ugepsa

3.Develop modail ocal Office system 1nrO through 31-55143Orgsistical& aperiliomel Procedures

organisat"ioal &Oporatiomereportig usoheaflsas

Prepare supportti documsatatic., manuals amdmaterial for aorigniaticoma, opoamtioalamd fiscal mkenageamet.

eveliop starf trainin materialsDevelop alient services program wlith

special refer.... to occupationalcoun selln -and quideace__ _ _ _ _ _ _ _ _ _ _ _

AS 7 Page,4 of D

Products and Activities to be caspieted bycantrators itbin speitfic tinfsam

_0. O m S Pg _ _ _ _ _ , _ . _ _ _ _ _ , _ i i _ _ _ _ _

5.1 raom sxeIss(Montiu"d e. Pield Tet the mufti in thre loal 01-May-93 tbrouh 30-44n-93mode taal _loymt offUic With different .nuiroomtsOffices that caa be ad Incorovate reftinemt an neededrapllated viti bed"egned, to mat dvers grain reional starff 30-Apr-93 thro 30-Un-93naegs of local employmt Aslit In developin regom 30-Apr-93 throug 30-Jun-93serice ad incorporatiag capacity to support local off ice InexistiOg RUSSIan eupeIMets iwlestatinand atetoe Raropean stablish a natioal 30-Apr-93 throug 30-Ju-93emperiemoe. *trouble-shootin TA caacity to

support regional iplemtation.

B. D _velawmant of Impromsd model office 01-Apr493 thrlugh 30-am-93system design. 34d 'Ow torspliastin packag inludgeplapatoy materials,

lnpiematatice, faolllties. _~~~~~~~rprtio an _up t gudelne.

. . ooutasw to mitor models" 01-apr-93 tbrongh 30-am-3 .lalenmntation MAn oeraiona.swrle_c to inso adluet_mtsincerporating res0lms that maymere, inludin staffiln.equirmms, staff tranin (trathe traines) and usrcoeputeriuaioa assstan.

5.2- _ev Ceom of C_ter nvPublicti of v Ta pln. 01-A93 thou 31-Oct-934Ppliton Prototpe eipmt installati. 01-Ag-93 throgh 30-apr-94to support a corpehmsive Iae I applicatlos syatem test. 01--bS4 throug 30-Apr-95rane of cltent service andmanugomot Safoernatle

sytem at selectod offles.

aP93 7 Page S of 8

bXa8tz or a _naAiProducts and aatlvitiee to be completed bycotractors withln specific tmeframa

30. coa w io in _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

5.3 KwS Lairop 3391035 CIPACZ Preparation of an interi- 01-Veb-93 through 31-Ma-93wll dselop a progrm to report to asess exlstingaddress maes labor conditios.

reandancies in entoprises Deelopmt of a modl N1W tem iLn 31-rO-93 through 30-p8-93by te establishmet of cooperation with egionl and local1saly Respons eama (Bs) off le.

Dvelopmet ot a manual oonetalnn 31-Mar-93 through 30-Ar-93the necessar methodelogy.

oed , tools, techiques andguidelnes, and staffnl/stafftraii reuremts and coursecontent.

Assist 3 In field testing 3 01-Feb-93 through 30-Ap93model In flve mas layoff situationsDevelop furthor modifLcations inprogr_m design as necessary

s.1 3LC mimes UiwoaU Prepare interim report to asess 01-Apr-93 through 31-Ma-93eo ceate standby existing caabilities and resources

discretionary public Work available to address job cratio 0m4or temporary emloyment strategies.progamsw

Prepare public wors and temporary 01-apr-93 tbrouh 31-May-93employment anual ad relatedsuporting procedures and gidancefor awerall ms3 plannn. budgetingand progrm managmnt as well asldentfication of staff traininrequlrements a content.

"Aist 35 In field testin the 01-May-93 through 30-Ju-93public works and temoray emloymetmodel In seloeted blg UNleoymentareas and dealopin furthermodiications a progrm desgn asneosary.

MUU 7 Pag 6 ot 8

Produts end Actlivtles to be completed bycontractors withi spelfic tinfrems

R WUZOL M8EYSC - StR . . MP..NO. cam _ .

D Ooo PU:p assist WED to study the lIse of 01-My-93 through 30-pr-94IMMzOai.T USMAYBD AlE unemplmet In areas that had a

sinle ecoomic actlvlty, and provideuidance to defne lpolly optionso.

6.1 waai. tama MwoaRI Prepar interim report to a&sess 01-May-93 thrumgh 15-Jun-93INiOuauO.W SUWED existing capeblllltes and resourcesLocal Labor market avallable to romote effective laborInformation systems to be market laformation flows.devloped by localemploymaet services offices Develloment of lnterim techniques, 15-Jun-93 throub 31-JUl-93to ldentlfy demand for tools and aproacheo to be used byplacaaent and trailnin local office including staffactivities. traiunw requlre_mts.

Cwnduct staff training prorams wlth 31-Jl-93 through 31-Au-93developmet suort from stafftraoin unit.Prepar report measures 31-Aug-93 through 31-Aug-94and actlons noeded to develop the abmore estenslve and substentlve locallabor market informtion programrequred by local eploymt servlcesand training agencies

Prmote private ad individual 01-Nat-93 tbrough 31-Jul-93inltlatlves in functioning of labormarket by devlopaing %m torbrocures regarding job sarchtechniques, interviewing, resumepreparatin. te deign of a publicmedia caoin on hbow the labormarket functions, available govt.programs a services and the role ofIndividual Anitiative.

Devlopent of programs encouraged by 01-Jul-93 thoug 31-Oct-93goernmet such as private jobplaemet age.cies, job clubs, jobfairs, and other non mploymetservice labor exchange actlvitles.

R3UU?7 Pgee7 of S

Liavm. or _inauProducts and Lotvitis to bh coleted bycantaactrs within spelUii tmeframe

ewfi tuz aa usvAP - .FR _ , N at1W. q .oo

ZOOM.~~ laSSSMhU tOp ato reort noitiu OFlUi thob 01-93 n--9Ivwin 815aW classifuction mthods and categories.(cOtiue) Awom_m an Interim olassflcation

6.1 classifiatio n qtou incldin the possbles"t ad of VA or W standard

system and secure M apovaI

Devlop an Interim and 1lmited 01-Ju-93 throug 31-Jul-93Mccupetioml olassiflcation ceodusing osistin systems already ia useby local offices an a torarybass.

Conduct staff trainin pogerms In 01-Aug-93 throug 31-Au-93o_ccptlodnl classification wlthdeveloent tsuort frn stafftrainugw unit.

6.2 _abo maret anitoring au prepar reprt ettiog out a looger 01-Aug-93 throug 31-Aug-93 "survgs to establish lIs" term strategyan plan for deelopintween lor bmet an updated and compreh_enlve

montorin ad powerty ocopatlml classification systemmnitoring. Reviw ad anayse existlu data and

capacity for monitoring labor mrkettrends, and for verty mnitorin.

Identify shortacming of methodology 01-Feb-93 through onoingin use.Develop interim survey Instrument. 01-e-93 through 30-Jun-93conduct surve. 01-Ju-93 throuo ongoinProvide report with prelimiary o0-sep-93 through 30-Apr-96rvsults of surve and establlshedbaseline.

hU 7 PO geof 8

LIoM oW _n _mmfto'dotl. and ativitirn to b cauloted bycontractors within spemf to testrem

1oin_ ffU1 aaew.l-p a Metmlb * st taaitia sa- throug 30-Tm-' 33_o tm rtO .tb:W.otma pe.it3 to fro"IS

Sminiag to th _im*pleg" e st3ess for 4.Uvwmy of £rasiae An 08-AW43 tClu_ 30-000,93om theme at dis of _erniae S lesits.

"sIo 1_ta p M _Olt to 01-p4)3 tbvomO Si-Ost-43.er otWket aegis.

-- _ t..- MG pv.idsre fw Irsiala 01-am-f3 t xot 21-Ost-,)

lroef1 a" eqmi 300 t,oais setw X d t t 01-_*l-93 thrnOh 30-AM-94iekaudeiSowml -a .omtw uaigmsmt.

_1" ~ ~ ~ ~~prae otta _dM 11 gmbolpiSt arogam Zselati.m of eqilgemst. *1W3 how 3 -lu-4X*trftmm to automated LeletemDpot.0-Ag3tr 0apU. of so. 't

it - refm of

LOW MON aM41 0o a £IUS Prepae report ldysiae preset system, WA 01-May93 throug 31-Ja-o94Soon n3Lh31 fl81 fozssatia got . rofozmd ystem.

Dorelo a long gm plan for Inpl.m.tatlfta. 01-May-93 ti GbrOu 30-3K-94

AALWcAYIOE or wRaNoaucr oMPOUEY 3! Yu O20AXIVAYONAL gmIDBPW DIRE_t

Leadership DepartMt7 Staff

Department administration2 Staff

TOTALs 9 8TAFF

- ~~~ ~ 8 mAO :JWSTMSVU

Regional Offlaes Dept. of Employment Policy Deartmt of Unmployed Employmeont Analysis and-O?gaiiation -Development of organizational -Developing System of Projections-Dereloymentllmrovmernt and Economie Foundations for vocational Tralnig and -Developla Bmploymentof anC ferritorial Branches State Regulation of B ploymea counaselling and Ioplementation Polity-Licensing Private services -Developing Legal and -Research/AnalysiaOrganizations 33 staff ethodologlcal Foundations Coordination-Promting Baloy.ent - Coordlnation of Regionrl -Statlstlcal Daeta Collection

24 Staff iactivities In this Field i tf~~~ ~ ~~~ ~~~~~ ~24 Staff

Laibor Migration011MM WOW______ ____ lI

and = Sm =u no m-Trrltorial a Industrlal 8tat- E"ployaet Fund

Labor Migration -Budgeting and Financlin International Relations-Organized Mlgration as per Dept. of Information systemsa tate Employment Programs -organization Oflnter Oblast Agreements -Facilitating the -Fliance and Accounting Internatlonal Cooperatloan

6 Staff Computerizatlon of 6Be -Revenues and Expendltures -Organization of11 staff Internatlonal Exchange of

______________________is_Staff_ p ecialistsPersonnel Departmet - o -Organization of Overseas-Recruitment Fellowship-Professional UpgradingmW 'e~ 10 ftaff

0 staff SInoration and PublishingDepth of Legal Affalir seC Inspection -Information Bgport to SEC

aint aiance Department -Analysis of neployment -Auditing and Supervlslon -Preparation and Updatlng of-Material support of SEC La tiplemetatlon of the Eployment Fund DoCufemt/Daetabse-Janitorial -Int6r Agency Lialson for -Employment Law Unforcemen -Preparation of Loecal end-Bookkeepkng Employment Leogislatlon -Compliance and Dlspute Foreign Materials

10 staff 5 staff Resolution .__ _

TOAL *8 6ShAF OTALS 49 STa" TOTALs 51 STaFF TOTAL: 38 STAYFonu TOA. 9nSAFI

65CHART 2

RUSSIA

02LOWYUT SERVICES AND SOCIAL PtOTECTION PRWJ8CT

MINISTRY OF SOCIAL PROTECTION

THE MINISTER OF THE THE SOCIAL WELFARE OF THE RUSSIAN FEDERATION

THE MINISTRY BOARD

The Council on The Social Policy Development

The Council on The Financial/Budget Questions

The Council on the Veterans and The DisabledThe Council on Pension Payment and Social Insurance

The Council on The Family, Maternity and Childhood

The Council on Administering/Management QuestionsThe Council on The International Cooperation and

Humanitarian/Technical Aid

THE CENTRAL MINISTRY STAFF

The Head Division on the Perspectives of the Social Poection ofthe Citizens

The Head Division on the Pension Payment organization

The Head Division on The Organization of Social Aid

The Division on Permanent Social Service Offices

The Division on Material Aid to Veterans and the DisabledThe Head Division on Socio-Medical Expertise and Reabilitation of

the DisabledThe Head Division on the Economics and Finance

The Division of Social Ensurance

The Division on the International Humanitarian and Technical Aid

The Head Division on Automation and Information Technologies

The Division of International CooperationThe Division on the Prosthetic Appliances and Orthopaedic Aid to

the CitizensThe Division of Cadre and Educational Institutions

The Division of the Sector Material Base Expansion

The Division of Control

The Material Division

The Letter Processing Division

The Ministry Management Division

The Mass Media and Mass Social Organization Interfacing Centre

The Division on the Legislative Expertize

The Supplies Division

The Social Aid to Families and Children Committee

66

C!1! 3a~~~~~o1owmau°t ervica and RoeI* Protection Project

DRURJDOWN OF 135 PROM=?OOU3RSTJan minguumuuus AS To P33s33TZ.

ow soauf Awo OrA TO i INIPD

iltt OSMIER- ETLY To aUONSL- PJUT F ON 3330/

____ ___ ___ ___ ____ ___ ___ __ TA M1 PAFF Sou l 31 3 13 1 _ _ __ _ __ _ __ _

A - "boIct O"otie imw 1"- tUbb td Cp * a U 4. 4 O 4 Effeti wni

I ftI_ the a od 6 8 5 3

e - Awoatin _ lfn _&w "OIw1- 1:141 a svou N3Is 5

0 . ECOM AcL 10 5

.IBM LStt 3 S 1 4 FelNeurch 1993- PshU. Jb cratio 4 6 1 S hb./irb 1995- Jd Training 11 20 10 10 Dun/Jis 1993

I * Lmr UaIt Polie and_--

Poicy am pt . prog"a Pling .iw d 2 3 2 1 Fdua 1*3

-= _meua "IluatImN 4 4 2 2 J_t 119*3od Pr"qs 1 2 1 1 ty 199

= fISFncioniW of Laor

* Lent LAr 2 2 1 1 f*ruy 1993* Laor M at itering* Osmtiuiul Clasiffctfan 2 0 2 Ibrh 193- ifl Job earc. Aid _f*nary 1*3

m *av w "obf 3 3 1 2 Febuay-*pri 199$Training ________; ___2____________

waLs a5 9 a9 40

'7

Tabi 1-2: Paletst io Eby _mie n eglArn, eNpamf, Krals, Gunt mw cicp, 1 1 9I90(mt-Jwmuy i thsw*

1990 w 1991 fauty O.;i.... ............. ... ....... ........... ,.,,,,,, POW* pop

* ,tout Urban Rurl Totat Urban Rurlt sq.1, 1991

Total 148,041 109,29 3802 148,543 109,19 38,744 8.7

I. North 6,149 4,25 1,4 6,161 4,746 1,415 4.21. Aridialkl btuest 1m t1159 416 1,577 1,14 413 2.7

a. wseiwle $oviet Aaawn mammin 55 34 21 50 34 21 033. Rapubtlo of Karatlo 7 651 145 I" 655 1 4.64. Reqpulc of Ka 1 1,265 9J 9 06 1,20f 961 304 3.05. Nurswakiai Obtest 1.155 1.04 91 1,159 1,043 91 6.06. Vologodsbica Obtlst 1,359 892 467 1,361 898 463 9.3

It. Norvhuest 8.299 ,199 1,100 8,305 7,208 1,097 42.3T. St. otenbuwrs City 5,C35 5,035 0 5,035 5,035 a8. St. Potersbusrs1cle Oblest 1.64 1,099 S" 1.670 1,103 67 78.1 1/9. Wov9rodi al Obtast m 5 227 5 30 2s5 13.6

10. Peokvaula abtest 846 537 309 a5 540 305 15.3

tt. central 30,467 25,204 5,263 30,478 23,249 5,229 62.8II. rirskeite Oblast 1.46 1.OO 476 1,44 1,000 44- 42.012. ienovwais Obtest 1t318 1,077 241 1,317 1,076 241 5S.113. Ketuzhata ablest 1t074 2 322 1,080 159 321 36.114. Kostramkia Obtlst a11 558 253 813 560 253 13.515. I _nokovtefa ablest 6,70 5.3V 1,36 6,718 5,339 1,379 334.5 2/16. Nos.. City 9003 9,002 1 9,003 9,0Q2 117. Ortlekvia Oblest 69 561 336 901 S 335 36.518. Rfie akns Otbest 1,3U 893 45 1,349 899 450 34.119. sli.skei ablet 1,163 95 m 36 1 1" 802 344 23.420. Tvwrskea abtest 1,674 1199 475 1.676 1,203 413 19.921. Tultefa Oblest 1,862 1,516 346 1.855 1 512 343 72.222. Vleinfrskeia Obtest 1,'m 1.316 s3 1,440 1322 338 57.223. ltrovskev a Oblest 1,474 1,306 20 1,476 1,209 267 40.5

Iv. Voto-Vta 6,473 5. I,95 8,480 5.902 2,5 32.224. Riepubtc to Coaveeb 140 7 3 1,346 800 546 73.623. Kirove1a Oblast 1,6'm 1,196 5"2 1,7C0 1,202 498 14.126. Republc of "uil4.t 754 40 29 I 470 2n6 32.7V. Nordvin soviet Sosiatf*t Ropubltf 964 551 413 944 5$6 406 36.828. mlltorrOdkala Obtst 3,717 2.679 83 3.712 2,84 U3S 49.6

V. Central C _bnam 7,751 4.706 3*,03 7,761 4,747 3,014 46.329. Bl9esrdkait Oblest 1,391 64 5W 1,401 897 504 51.730. Kurskais Oblest 13 75 52 1.336 792 54 44.831. Lfpetis Obtest 1,81 776 45 1,234 784 450 51.232. T1avkat altaest 747 0 1,315 751 54 38.333. Vronabka ablest 247 1,516 959 2,45 1, 92 47.2

Vt. Volge 16,500 12,12 4,37 16,56 12,25 4,361 30.934. Asttekhftis alest 1,001 661 320 1,007 65 322 22.835. Repttlc of KIltki 325 149 17 3i2 151 177 4.336. Pvwenskate Obet 10 940 567 .s12 94 5" 35.03?. uam"esktia ablest 3.7 3.655 633 3.290 2.669 431 61.48. trt 0ss Obtet 2700 Z.007 693 2a'06 2,026 62 27.0

39. Repubi of Tetata 3.0 2,691 967 3,679 2,716 963 54.1U4. Utlanvks ablet 1416 1,018 3S 1,430 1,032 398 38.341. Volgserskie abluest 2,15 1,9 62 2,632 1,996 64 23.1

ns. Nrth Ceuseam 1669 9.661 7,18 IN 17030 9, 7.207 48.O42. Rep6ic of Deestsu 1,0 Sol 1.022 1,4 616 1,08 36.943. echen Repbic fed iuAh Rep_blIc 1,290 52 15 1.307 56 709 6?.?4"- daftMfnlatkar tqpio UB766 471 27 77 476 299 62.244. KIC IterskUf kr f 9,135 2,797 2,338 5,115 2,517 2,3 61.9

46. RpAbtIc of AdVIy 436 32 207 437 20 207 57.647. Norb-0setion Soviet Sec1*tft t {c 06 439 199 643 443 200 80.347. No kfa SObtet 43Soe 4.326 3.086 1.2*0 4.346 3 1.I,0 43.149. StevrepoltkffI ri 2,9 ,5M 1:334 2,9 1,573 1,33 36.3

*50. larct-Chek Soviet Seeall: RI&MlC 422 207 215 427 2 216 30.3

68

=I*I± 1-2t Popbatcn bv t im, upatiet ad Una, 19091(m*yJslr, In #hmuW)

1990 -1591 Nonslty........... ....... .................... I*.*

totl Ubta Aurl Total Urlbs ural eq. ̂ 199

Vill. urate 0,35 15s5 503 o.om 15,310 5 6 248.51. Rep*llc of OaedorUosAn 3.94 23.9 1,415 3, 3,74 1,410 V7.72. ch*tiabinsksi* Oblast 3.637 3,00 636 3,41 3,001 610 41.453. Uurwaemei Obtst 1,106 " 499 1.110 613 496 15.654. oranbgkaies Obet 2,183 1435 40 2194 1,432 71 17.755. Pormkes Obtest 3,106 2,404 702 3.110 3,411 499 19.4

56. Km-perwatakaie £I*ItU btest 160 48 112 160 48 113 4.957. uaee :rinbureskee Oblast 4,76 4.13 59 4,750 4,1 f 2sso. u^rt ASep1li. 1.619 1.13 482 1.6 1,145 4u 3.L

Ix. vtern ibwria 1s,055 11016 4l9 1,0 1,15 11,090 4,06 6.259. Altaiskil e 3.05 1596 1,23 2,651 1601 1,350 10.9

60. Rbstfa of Altf 194 93 101 16 53 143 2.161. Kanrovkaee Most 3,176 2,77 39 3,160 2,760 400 33.363. scvostbirsicsia Obtet lo73 2.09 698 3. 3,096 698 15.763. Idofe abst 3,151 1,465 66 3,163 1,47 15.364. Tskaia Obtest 1.009 695 314 1,012 69 316 3.265. Tianwakela Obtest 3,135 2,394 741 3.156 2,440 716 2.2

66. ShantyuNnritskil Atoous 01m 1.301 1.166 115 1,314 1,201 113 2.567. Imt-*mnot Repll 4C95 334 111 493 407 6 o.?

X. astwe 9,307 6,63 2,56 9,43 6.62 3,91 2.2U. Rdepsa of tI1e 1,019 69 400 1.056 45 421 3.069. Chiti1eQskaeOtest 1 90" 476 1,39 916 476 3.2

70,* Aglkf urytskf f Atn.m ousOlWe 77 25 5a 78 26 53 4.171. irkutkale Obtest 2,847 2,3 54 2,33 2,314 549 3.?

73. wt#'w*_dwss &i vkt*l laosmeoukrh I3 as 111 13 36 112 6.273. KIraa tskll Ke 3,6132 2,637 9n 3.635 2.641 986 1.5

74. RepAl,.0 of 1hakeee 573 417 1S6 577 419 1s6 9.37!. Tlcuyrakff (Oolgan takll) Atu*_. 01u is v 18 54 36 18 0.176. lvo sffnk _ slbAut¢O m u t as r 18 as 7 13 0.03

;7. Rsll¢ of Two 314 .149 t16 307 . 14 161 1.6

XI PFW Usut 8,008 6,107 1,901 Bo0 6,14 1,911 1.376. Aumrkala test 1.066 73 342 1,074 3 34 3.0i9. Kuestekle Obtest 470 62 a 473 3B4 at 1.0

80. Kwrlk Autewu Soviet Repsl. 39 15 24 40 1S a5 0161. uabavovklfl Krre 1,640 1,483 317 1.51 1.442 339 2.2

#3. ewish Auton_mu O t 2118 144 74 220 145 75 6.1U. Ngedkeis Obtet 5 439 100 34 436 U9 0.4

04. cu*abf Soviet Astmnumaus R{MaA 156 113 43 154 111 4 0.2S. Priewsklt Kl 2,21 1,7I9 513 2.259 1781 515 1.986. Sakdstinkle Obteu t 713 67 106 717 612 1 6.26. RapsAll of ehe (TktIe) 1,099 73 366 1,109 73 3 0.4

. rtiningakslr Obtet 6 69 t# W 701 166 56?

sams kmfan sft e ot Yearbook, Nttoel1oTP o ussia in 19WP pp. 77-; Th Rhbluce f tRusIan Uartflan by A,. 60y.

N The ten Popation cass urs cln ta_ In eld-4nMY, 193. Pop0In dht fer 199.0 d 1991 M eestle"s an tlw bass of pop_latio anma deft ad fnfmtln on birts en death omyltad by offtleof th RltVt of ita of Clvii SttW. thes poulation dt Wt reot n a * Fa hees, i.e.tme pplatIfn ft ur lmtu both p m end t_p_ay resi In RusIn topsl an easluatI_ntm lde resd a are t em,ety in oeth repAtfIs ow abrod. Nititay residnts,hao my be sluold In poplAtion tete for teir r_tsle of foiin, cstitute a possbte eWtion

U/ InrlUdin t. S et- ONOe City.Inctudin Psse City.

69

Table s Am nd Ptpulation by loonadc egionO(uid-january eltUat")

Pisltation (in ThowAwh)P- p-att Ion mr of

Ch_ 1090 199t peopletOOO We- _ pe sq. la

eq. a perss Total Urben url Total Urban Rut In 1990

Total 17.075 7.2 140,041 109,39 38,802 146.5 109.7" 3,744 8.7

I. NIort 1.4, 9.4 6,149 4.7 1,424 6,161 4.,7 1,415 4.2

2. Nothwest 197 7.8 S299 7,1 1.100 S.305 7.206 1.9 42.1

3. Central 48 4.9 30, 5,204 5,2a 30.478 25.249 5. 6.8

4. VoltVtks 26s 1.4 6.473 5.8 2.595 6.488 5.92 2.5m 32.2

. Cntl Ch1r_ 1" 0.7 ?.M 4,70 3,043 7#761 4,747 3,014 "A

6 Vote 56 5.6 16,50 12,127 4.373 16.5, 12, 4,361 so0s

-, rth Cl A . 356 8.1 16.86 9.661 ?*18s 17.06 9to 7, 47.4

S. Uraet 86 4.5 20,345 15,256 5,08 20.9 15,310 5,0 24.7

9. vstn Sliea 2.4, 15.8 15,005 11,016 4.0 15.156 11,090 4.00 6.2

10. Easten ibwris 4.12 12.2 90,W 6,6 2,5" 924M 6642 t59 2.2

11. Vr gt 6,216 16.4 8$,0 6,107 1,901 5 6,1 1,911 1.3

Matiniiurad Wast 15 7.9 a7 695 1d 7 186 58.5

Slures bSusefe Noinhat. Oi ttisticsl Veebok. NatiGmt EgonaW of 1_si1 In "Op.

Notes Th lest opulatIon CMWu we nd in mid_Jewnry, 1989. hPmt eon dt for 1990 e" 199 areeetfted an the bis of poUatien ceus data V Infreretion en birth NW deaths eO led bY offitcof the Mefltr of Aets of Civil Sttus . The popltion data r eptdn aode facto beso, i.e.these population firem Ictude both peommunt wa to_o resident In usian repshlic eN excludetmwtwetr. de jure rosid et Weo ar temporurity in other rapkhlift or ebresLNi. titay reidensWoo my be inetuded in P_eation tottls for thir rlpi fe of origin, onti *t oa possibte ewoe n.

70

Umloimn Ueirvicas and Lacia PR.tcAio proi.ctZAUb 1l' opWulation =a fmploymmut - sum8ary Table, 1970-71

(in u.lUios or pecent)

M97 1900 1" 191| 1990 199t

Totl peptuatlen (mid*yeet) 1/ 130.1 139.0 143.9 147.6 148.3 148.9attes 4".0 46.O 46.0 47.03 47.0 47.03

Famales 54.03 54.0% S4.03 53.03 53.03 53.03Urban 62.03 69.03 O.0 74.03 74.03 74.03Rural 36.03 31.0X 27.0X 26.03 26.03 26.03

Unde 16 32.0 36.0 36.0Active Age 2/ 83.0 84.0 84.0Abe Active Age 24.0 27.6 28.9

Poputation rorwh rt o." 0.53 0.53 O.4 o.23 0.13crxde birth rate 1.5 1.6" 1.7X 1.53 1.4" 1.2Xcrux death rat 0.9S 1.1 1.1X 1.1X 1.2X 1.1t

!Etoyed-Tatat 73.3 74.9 75.2 74.4

Eployed-State sector 72.5 74.2 74.1 73.2oales 47.7X 4L1X 47.6x

Fawkies 52.33 51.9X 52.4X

tn Industry & Construct. 42.0 41.JX 43.03 42.83In Agriculture 115.0 14.33 13.4 13.4other Sectors 43.03 43.9 43.53 43.8X

of whicht eiotion nd helth 17.53 17.9X 19.33 19.53central boveryment 2.33 2.43 2.33 2.3X

Rettred (Receiving pensio) 28.3 31.2 33.2 33.8As Percent of .plwed 39.11 42.03 44.6X 46.2X

Sources: hid-yea popuLation estimistes lle ored Ban's Pm:; EfploVnt estfmates are Russian Goskekmtat.

1/ The breekdow for 190 e those of 1979.2/ Include wormn aged 16.55 and cm aed 160.

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