Towards “better work” through pandemic storms

Towards “better work” through pandemic storms

Pandemic challenges

What are the challenges faced by the labor market in Uzbekistan during the COVID-19 pandemic?

– Yes, indeed, the COVID-19 pandemic has become the greatest threat on a global scale, affecting the state of the national economies of all countries. The devastating impact of the coronavirus, including on the labor market can be seen around the world. Uzbekistan is no exception in this row.

During the period of the quarantine, due to the restrictive measures, we faced an intense increase in unemployment, in particular, in the sector of small and micro businesses.

While the majority of budgetary organizations continued their work and retained their jobs, 55% in the small business sector, and 60% of microfirms temporarily closed their activities.

The pandemic also affected the informal employment sector, which now accounts for more than 5.5 million people, or about 42% of the total employed in the country.

The pandemic has had a strong impact on external labor migration. Due to the introduction of restrictive measures, many labor migrants were unable to leave the country, and those who remained in the countries of employment found themselves in a difficult situation.

If at the beginning of first quarter of 2020, the unemployment rate was 9.5%, then during the quarantine restrictions this figure rose to 13.2%, the number of unemployed people increased by almost 500 thousand people, by the end of the year this indicator decreased to 10.5%. In 2021-2022, work will continue and we hope to reach the pre-quarantine unemployment rate, i.e. 9-9.4%.

What measures have been taken by the Ministry of Employment and Labor Relations of Uzbekistan to support the population during quarantine? What new tools have been developed this year and how quickly and efficiently have they been introduced into practice?

– In 2020, the Ministry of Labor has done a lot of work both in terms of employment and in providing social services and assistance to more than 1 million citizens. In January-December 2020, over 1 million people applied to employment centers for assistance in finding a job. 362.8 thousand citizens were employed, 521, 7 thousand people (including 278.5 thousand women, 175.5 thousand young people) were involved in public works, 89.7 thousand unemployed were provided material support, unemployment benefits were paid.

Since the situation is unique in itself and humanity has not yet faced such challenges, the Ministry has developed and implemented new tools to mitigate the impact of the pandemic on the labor market.

Our task is to achieve maximum efficiency in using these tools, whether it concerns issues related to remote work hours, the organization of additional payments, etc.

Features of the labor market

According to the calculations carried out by the Center for Economic Research and Reforms (CERR), the share of those employed in the informal sector is approximately 40% of the economically active population of the country (or 43% of the employed in the country). How does the Ministry of Employment and Labor Relations plan to fight against "shadow" employment, use simplified forms of legalization of labor relations?

- By the end of 2020, the informal employment sector (excluding migrants) in Uzbekistan covers 42.8% of the total employed population.

The government is taking steps to legalize informal labor relations. In particular, in recent years: the tax burden has significantly decreased due to the adoption of the new edition of the Tax Code; measures were taken to stimulate the voluntary participation of informal workers in the social insurance system; from July 1, 2020, a simplified self-employment procedure has been introduced; the draft of the new edition of the Labor Code provides for the improvement of the mechanism for regulating the labor of workers involved in remote and home-based forms of labor relations, etc.

An important tool in reducing the informal sector is the "Unified National Labor System", which has been in effect since January 2020, which unites 532.3 thousand employers and includes data on 4.8 million employees.

At present, based on the study of foreign experience, proposals have been prepared to establish responsibility for the non-inclusion of information in the "Unified National Labor System". In countries with similar electronic programs, for example, in Azerbaijan, there are high fines and sanctions for those who do not conclude employment contracts electronically. In Belarus, the fine for these violations is set in an amount equal to 5 to 15 times the base amount of the calculation, in Russia - in an amount equal to 20 to 30 times the base amount of the calculation, and in South Korea a fine of 10 thousand US dollars is provided.

As a result of taken measures to reduce the informal sector in the economy, it is expected that the share of the informal employment sector will decrease to 30% of the total employed population by 2030.

The full version of the interview via this link

In the country/Social policy

Ziyoda Rizaeva, Victor Abaturov, CERR

Economic Review Magazine №6 (258) 2021

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