The Ukrainian government may cancel an IMF-backed plan to raise the retirement age for women if the public speaks up against it, Prime Minister Mykola Azarov said on Monday.
Under its $15 billion deal with the International Monetary Fund, Ukraine said it would raise the retirement age for women to 60 from 55, bringing it into line with that for men. A draft bill on pension reform is now with the parliament.
Analysts, worried by the government’s earlier decision to back down on an unpopular tax reform, say the pension reform’s implementation will be the key indicator of Ukraine’s willingness to comply with IMF programme policies.
But, in a move that could displease the Fund, Azarov said he was ready to drop parts of the plan after its review by the wider public.
"Let us listen to our people, if they say they don’t like such a system then no International Monetary Fund is going to stop me," Azarov told a briefing. "We will say that our people don’t want (a reform), they want to live like they live now."
Pensions are relatively small on an individual basis — about $140 a month on average — but total pension expenditure is a big burden on the ex-Soviet republic’s budget, amounting to 18 percent of gross domestic product (GDP) in 2009, one of the highest rates in Europe.
There are nine pensioners for every 10 working people paying into the pension fund in Ukraine — and this ratio is set to get worse as the population ages. (Writing by Olzhas Auyezov; Editing by Ruth Pitchford)
