FYI

Dear Ivane –

Thank you once again for yesterday’s excellent call.  As discussed, we are now mobilizing our teams and will follow-up with Niko to start preparations for all three requests. 

In the meantime, Lire has kindly reached out to our World Bank Social Protection experts to comment on your proposed actions.  Note that these are broadly in-line with what other countries are doing (see also the file I shared yesterday) and I’ve highlighted specific comments in blue to each of the measures below.  One overall comment is that in the context of the rapidly developing situation with COVID19, it would be important to differentiate between regular beneficiaries of social protection systems and those that are not part of the system under more normal circumstances. In the latter case, it would be useful to make a clear separation in the COVID-19 response, so there is a clear message that COVID-19 related benefits are temporary and will be scaled back when the crisis is over.  

1. Helping workers that have lost their jobs with a one-off 100-150 GEL transfer;

• The one-off income compensation could be targeted, for example, to low income workers (setting an income threshold below which workers are eligible) and workers in certain sectors more severely hit by the current lockdown and the indirect effects of the crisis. The benefit amount will need to be carefully defined based on certain benchmarks.  In the medium term, business start-up grants could be considered to support the launch of microenterprises that had to shut down due to the direct and indirect effects of the global pandemic. We think one of the biggest challenges in outreaching potential new beneficiaries would be "social distancing."  Bringing new people into any program requires some outreach and in-person interaction, either through application and enrollment or at cash-out points.   The best bet may be to use top-ups in existing programs, attempt to enhance social registries with other large data like health insurance or civil registries, then setting up online applications where feasible.  It may be possible to collect basic household and contact data through COVID-19 testing centers.  Transfers would need to be through existing accounts, top-ups or staggered payment points to limit physical contact (by ID number or last name on different dates, etc.).  Thorough and well-planned communications would be critical.   

2. Preserving jobs by introducing a 3-month moratorium on the payment of Personal Income Tax, accelerating and expanding the VAT refund program, and deferring payments of corporate income tax and property fees;

• Alternative measures with the goal to preserve jobs and limit layoffs during the crisis could include (i) temporary wage subsidies for employers/companies whose operations have been interrupted due to government’s restrictions, (ii) waiving social contributions and (iii) suspending firing procedures during a certain period. These measures could be targeted to specific sectors that may be deemed more severely affected.

3. Helping the vulnerable by expanding coverage of Targeted Social Assistance and also providing a voucher for electricity payments for low-income households;

• Expanding the coverage of existing flagship safety nets programs to new beneficiaries is one of the most common measures adopted by governments, leveraging existing administrative structures and infrastructure. In Georgia, this measure will be particularly reliable to mitigate potential negative impacts of the COVID 19 lockdown given the size of the social registry (capturing more than 30% of the population) and the TSA program’s flexibility to expand.
• Vouchers can be one of the options to compensate for potential electricity tariff increases; top up benefits to TSA benefits may be preferred as cash is fungible. Given the uncertainty on tariff increases, such compensations may be triggered by certain indicators linked to CPI, for example.
• Increasing the amount of TSA benefits should also be considered should inflation go above a certain threshold to be defined. Higher benefit amounts could be considered for household with infected members (depending on the evolution of the spread of the virus, the official cases are currently 70)
• Other measures to be considered along with the expansion of the TSA coverage may include (i) the simplification of application and approval processes (including necessary documentations), (ii) the adaptation of implementation processes and payment to the growing restrictions posed on human interactions.
• Further income support could be achieved by advancing /anticipating the payment of the universal social pension for the elderly.

4. Extend support to informal workers; 

• Proposed measures can include temporary cash transfers for informal workers unable to continue their business and to temporary migrants (who could not travel due to travel restrictions). Identifying informal workers in need of support is challenging. In addition to collaborating with micro finance institutions to reach the informal sector, it may also be important to maintain closer collaboration with UN agencies to reach refugees/IDPs who often get lost in these situations. Moreover, fortunately Georgia has universal health insurance coverage data that could be used to establish payment rolls, and the policy IDs could be used for deduplication and consistency checks against the existing SP programs (in this case, no direct contacts with potential beneficiaries may be required to support access to care and income support for affected families). From the implementation point of view, concerns over cash distribution for those not covered by banking and mobile accounts can be real and the simplest way to ensure income support to lower income informal workers in Georgia would be through the expansion of the TSA program and the expansion of the Unified Database of Households (the social registry).

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