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$30-50 MILLION CREDIT WILL BE USED TO NETWORK COMPUTERS IN SOCIAL SECTOR

World Bank, Slovak officials close to loan accord

Final negotiations on a technical assistance loan estimated between $30-$50 million that will go towards reshaping Slovakia's social sector currently is taking place between representatives from the World Bank and the Slovak government, Juraj Šipko, director of the international relations department at the Ministry of Finance, told The Slovak Spectator.
While World Bank officials remain tight-lipped about the loan's specifics, more than half the money will be channeled toward interconnecting the social sphere's vast, divergent computer network, said Jozef Krištufek, the information advisor to the Ministry of Labor, Social Affairs and Family's state secretary, Vojtech Tkáč.
"The inspiration for our [social] system is what is in place in Ireland," Krištufek said. "From a systematic point of view, it amounts to one-stop shopping."

Final negotiations on a technical assistance loan estimated between $30-$50 million that will go towards reshaping Slovakia's social sector currently is taking place between representatives from the World Bank and the Slovak government, Juraj Šipko, director of the international relations department at the Ministry of Finance, told The Slovak Spectator.

While World Bank officials remain tight-lipped about the loan's specifics, more than half the money will be channeled toward interconnecting the social sphere's vast, divergent computer network, said Jozef Krištufek, the information advisor to the Ministry of Labor, Social Affairs and Family's state secretary, Vojtech Tkáč.

"The inspiration for our [social] system is what is in place in Ireland," Krištufek said. "From a systematic point of view, it amounts to one-stop shopping." Asked to clarify, Krištufek said that various social benefits - such as pensions, health insurance and employment to name a few - could be handled better when all computers used by offices in the social sector were compatible.

Several important details with the loan still need to be worked out, such as its amortization period and its specific dollar amount; even more ominously, Šipko said as The Slovak Spectator went to press that he was not as certain about the loan as before. He wouldn't give any details, but said all would be known when the negotiations conclude in April.

Computer compatibility

Unique among the region's transforming countries, both Slovakia's Social Insurance company (Sociálna poisťovňa - SP) and employment offices are extra-budgetary, self-financing institutions. However, there are currently several computer information management systems in the country's social sphere.

Both Šipko and Krištufek claim that Slovakia, with its emphasis on developing a "social market economy" - compared to the more free market policies of the Czech Republic, Poland and Hungary before July '94 - is ahead of the game.

"We think we have the best social benefit system in the region, but we want to make it even better," Krištufek said, adding that World Bank officials were especially enthusiastic about Slovakia's success in battling unemployment.

However, those same officials were critical about the contributory burden that employers must bear in health, social, accident and disability insurance. Companies wind up paying nearly half more on top of an employee's salary, and it is no secret that employees often receive an "official salary" that is much lower than what they receive under the table to offset these costs.

This fiddling with figures affects pension payments and all other forms of social support. Pat Wiese, a World Bank actuarial consultant, has presented the Slovak government with some algorithmic tables that look ahead to 2040.

By that time, Wiese claimed, Slovakia could be looking at significant depopulation given its declining birth rate and emigration outpacing immigration. Therefore, for an organization like SP, this spells big trouble, meaning larger payouts and fewer people contributing to cover them, Krištufek said.

Therefore, SP is keen to find investment vehicles that will enable the organization - currently in a positive cash-flow situation that has made possible pension increase of 30 percent over the past two years - to meet future commitments. The World Bank loan, carrying the institution's standard interest rate of a fraction above LIBOR (London Interbank Offered Rate), is expected to help do that.

The talks with World Bank officials are touching also on health insurance, employment and pension plan flexibility, supplementary pensions (with special consideration for the shorter working lives of underground miners raised by the Confederation of Trade Unions), unemployment insurance (including disincentives for people who won't work), maternity allowances, pension adjustments, job retraining and others.

POSS ADDS:

As a starting point for this process of melding the databases in the ministry, Social Insurance (Sociálna Poisťovňa - SP), the 78 new National Labor Institute (Národný Úrad Práce - NÚP) and others, Slovakia is somewhat at sixes and sevens in this number crunching exercise.

Among the senior officials who have recently visited Slovakia are Emily S. Andrews, head of social policy department at the World Bank, and Principal Economist Robert Rocha, based in Budapest. Neither would reveal any details on the number of World Bank staff or the exact number of dollars that will come to Slovakia as a result of the loan.

The loan has emerged hand in hand with a Country Economic Memorandum on Slovakia that the World Bank is planning to submit to the European Union in April. There are environmental measures involved, too, but most of the focus is on the Ministry of Labor, Social Affairs and Family.

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