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Analysis of the Results of the Targeted Program for Promoting Employmentfor the Population of Minatom Closed Administrative-TerritorialZones for 1998–2000

Irina V.Yefimkova *

Department of Regional, Social, and Personnel Policy, Russian Ministry of Atomic Energy

In 2000, positive trends continued in the development of industrial production and atomic power engineering within the Minatom (Ministry of Atomic Energy) system. The state order was fulfilled according to the established tasks and limits.

The rate of growth of industrial manufacturing output volume totaled 109.3 percent in 2000 (109 percent for Russia as a whole), while 103.5 percent is predicted for 2001 (in comparison with the previous year, in comparable prices). The growth of output volumes in 2000 is basically associated with the increase in electric power production at atomic power plants and the corresponding growth of manufacturing output volume in the nuclear fuel industry.

The active implementation of measures included in programs providing employment assistance to the population has had a substantial impact in reducing tensions in the registered labor market. The process of layoffs at enterprises and organizations has slowed, while the number of individuals placed in temporary jobs has increased. The number of participants in public works projects is also growing.

Thanks to funds attracted, as well as the use of outside investments, local government agencies in the closed administrative-territorial zones have carried out projects to create enterprises in the following fields:

  • manufacture and processing of food products (Zheleznogorsk, Lesnoi, Ozyorsk, Seversk, Snezhinsk)

  • light industry (Novouralsk, Seversk)

* Translated from the Russian by Kelly Robbins.



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Page 8 Analysis of the Results of the Targeted Program for Promoting Employmentfor the Population of Minatom Closed Administrative-TerritorialZones for 1998–2000 Irina V.Yefimkova * Department of Regional, Social, and Personnel Policy, Russian Ministry of Atomic Energy In 2000, positive trends continued in the development of industrial production and atomic power engineering within the Minatom (Ministry of Atomic Energy) system. The state order was fulfilled according to the established tasks and limits. The rate of growth of industrial manufacturing output volume totaled 109.3 percent in 2000 (109 percent for Russia as a whole), while 103.5 percent is predicted for 2001 (in comparison with the previous year, in comparable prices). The growth of output volumes in 2000 is basically associated with the increase in electric power production at atomic power plants and the corresponding growth of manufacturing output volume in the nuclear fuel industry. The active implementation of measures included in programs providing employment assistance to the population has had a substantial impact in reducing tensions in the registered labor market. The process of layoffs at enterprises and organizations has slowed, while the number of individuals placed in temporary jobs has increased. The number of participants in public works projects is also growing. Thanks to funds attracted, as well as the use of outside investments, local government agencies in the closed administrative-territorial zones have carried out projects to create enterprises in the following fields: manufacture and processing of food products (Zheleznogorsk, Lesnoi, Ozyorsk, Seversk, Snezhinsk) light industry (Novouralsk, Seversk) * Translated from the Russian by Kelly Robbins.

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Page 9 manufacture of water pipes and sanitary equipment using promising new materials (Tryokhgorny) wood processing (Zheleznogorsk, Lesnoi) retail trade and the service sphere (Zheleznogorsk, Lesnoi, Seversk) construction and renovation of the urban infrastructure, housing, and public facilities (Lesnoi, Novouralsk, Ozyorsk, Sarov, Seversk) industrial and domestic waste processing (Zheleznogorsk, Novouralsk) manufacture of medical preparations (Zheleznogorsk, Sarov) processing of local mineral raw materials (Zheleznogorsk) agricultural production (Lesnoi) sports and tourism (Tryokhgorny) and a number of others Within the framework of the Targeted Program for Promoting Employment for the Population of Closed Administrative-Territorial Zones of the Russian Ministry of Atomic Energy for 1998–2000, and thanks to the resources provided by those executing the program, about 13,300 jobs were created and preserved in 2000. More than 1,250 people took part in public works projects, and 1,200 were provided with job training. (See “Report on Implementation in 2000 of Measures from the Federal Targeted Program of Employment Assistance to the Population of the Russian Federation for 1998–2000,” Russian Ministry of Labor, February 27, 2001, No. 448, Appendix 1, pages 21–22.) SITUATION IN THE EMPLOYMENT SPHERE From 1994 through 2000 the number of unemployed persons in the Minatom closed zones registered by local employment service agencies of the Russian Ministry of Labor rose to 4.8 percent in 1996 and fell to 2.2 percent in 2000 (see Tables 1 and 2). TABLE 1 Size of Economically Active Population and Overall Registered Unemployment Rate in Minatom Closed Zones, 1994–2000 Registered as of End of Reporting period 1994 1995 1996 1997 1998 1999 2000 Economically active population 416,120 413,900 411,130 416,880 416,770 426,750 417,090 Number of unemployed registered by local agencies 9,480 16,970 19,980 18,040 19,590 13,660 9,180 Registered unemployment rate (%) 2.3 4.1 4.8 4.3 4.7 3.2 2.2

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TABLE 2 Registered Unemployment Rate in Minatom Closed Zones, 1994–2000 (in percentages) City (Closed Zone), Region 1994 1995 1996 1997 1998 1999 2000 Russian Federation 2.3 3.3 3.6 2.9 2.9 1.8 1.4 Zheleznogorsk 2.0 6.0 6.0 5.8 3.1 1.5 1.1 Krasnoyarsk Territory 3.8 3.8 4.3 3.4 2.6 Zarechny 6.2 8.8 8.2 6.8 7.9 5.8 3.1 Penza Oblast 6.2 5.7 3.8 1.9 1.6 Zheleznogorsk 2.6 2.3 3.1 2.0 2.9 2.7 2.7 Krasnoyarsk Oblast 3.8 3.8 4.3 3.4 2.6 Lesnoi 2.7 3.7 4.0 2.9 5.5 3.8 3.6 Sverdlovsk Oblast 3.3 2.7 2.7 1.5 1.5 Novouralsk 0.5 2.6 4.7 4.7 6.3 4.2 2.9 Sverdlovsk Oblast 3.3 2.7 2.7 1.5 1.5 Ozyorsk 1.0 1.9 3.6 4.6 5.8 3.2 2.3 Chelyabinsk Oblast 2.2 1.9 2.0 1.1 0.9 Sarov 0.5 1.5 2.3 1.7 2.4 2.0 1.2 Nizhny Novgorod Oblast 3.1 2.6 2.4 1.0 0.7 Seversk 3.7 6.3 7.3 5.9 5.1 3.6 2.0 Tomsk Oblast 3.8 3.6 4.0 2.4 2.0 Snezhinsk 1.8 2.2 2.8 1.8 2.7 1.4 0.8 Chelyabinsk Oblast 2.2 1.9 2.0 1.1 0.9 Tryokhgorny 3.4 6.0 5.4 6.9 5.8 4.5 2.7 Chelyabinsk Oblast 2.2 1.9 2.0 1.1 0.9 NOTE: Figures are shown for registered unemployment rates in Minatom cities (closed zones) in which unemployment levels exceed levels for the regions in which the cities are located. Blank cells in the table indicate that no data are available for those periods. By the beginning of 2000, the unemployment rolls included 13,656 people, of whom 63 percent were women and 38 percent were young people between the ages of 16 and 29. During 2000 the proportion of unemployed citizens who had been registered with the employment service for more than one year fell from 25.1 percent to 16.8 percent. Stagnant unemployment was reduced as the average duration of unemployment tended to decline, totaling 5.1 months as of January 1, 2001, as compared with 7.1 months as of January 1, 2000. The duration of unemployment was reduced as follows: among men, from 6.2 to 5.1 months among women, from 7.6 to 6.7 months among citizens living in urban districts, from 7.0 to 6.0 months among citizens living in rural districts, from 8.4 to 7.0 months among young people 16–29 years of age, from 6.3 to 5.4 months The number of job vacancies at the end of 2000 increased in comparison with 1999, totaling 19.8 percent, or 3,850 open positions. Requests to

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Page 11 employment service agencies by enterprises wishing to fill open jobs totaled 1,393 in 1999 and 3,850 in 2000, an increase of about 280 percent. Demand for workers in the state sector of the economy also rose, representing 29.6 percent of total demand in 1999 and 38.2 percent in 2000. More than 80 percent of vacancies were in blue-collar fields, and the majority of the requests were for men. During 2000 the labor market intensity coefficient (number of unemployed citizens registered with the employment service for every one vacancy) decreased by almost 43 percent, going from 4.2 individuals per job opening to 2.4. A total of 1,025 people, or 6.3 percent of the total registered as unemployed during the year, took part in public works projects in 2000. The number of unemployed who received unemployment benefits during 2000 was 17,323. Material assistance has been established for unemployed citizens and their family members for cases in which unemployment benefits have run out owing to the expiration of the legally established eligibility period. Despite the drop in the total number of unemployed and the continuing positive factors of development, the trend toward improvement in the condition of the labor market cannot be termed stable. There are a large number of vacancies in the labor market, but these jobs are not in demand for the following reasons: the majority of vacancies are for men, offer low wages, and are at enterprises where payment of wages is often delayed. Women and young people represented an increased portion of those laid off. The number of citizens requesting job placement assistance or receiving psychological, legal, and career guidance services has risen by 37 percent. LABOR DEMAND OUTLOOK A critical situation could develop in the labor market in the closed zones during implementation of the Federal Targeted Program for Reform of Atomic Industry Enterprises (Nuclear Weapons Complex) for 2001–2005 and for the period up to 2010. Measures included in this program call for enterprises of the nuclear weapons complex to lay off 30,000– 35,000 people during the specified period. The biggest and most intensive efforts on conversion in the industry are to be carried out during the first stage of the reform program (2002– 2005), which will require significant state support. Thanks to the development of conversion-oriented manufacturing enterprises, about 30,000 new jobs will be created for workers laid off from the defense sector. To ensure socioeconomic development and provide jobs for the population, local government agencies in the Minatom closed zones are carrying out investment projects to create small- and medium-sized enterprises in the following fields: production and processing of food products; pro

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Page 12 cessing of wood and local mineral resources; construction and renovation of urban infrastructure, housing, and public facilities; processing of industrial and domestic waste; manufacturing of metal and plastic goods and medical preparations; retail trade and the services sphere; agricultural production; light industry; sports; tourism; and a number of others. These projects are being carried out with funds from local budgets and from outside investments. The job creation efforts being undertaken by local self-government organs and by the management of the Minatom enterprises around which the closed zones center will make it possible to ensure employment for the population of the Minatom closed zones. They will also help to prevent the growth of mass unemployment in connection with layoffs during the reorganization and reform of nuclear weapons complex enterprises. KEY PROBLEMS REGARDING EMPLOYMENT OF THE POPULATION IN MINATOM CLOSED ZONES According to provisions of the subprogram Reform of Atomic Industry Enterprises (Nuclear Weapons Complex) for the period to 2010 of the Federal Targeted Program for Reform of the Defense Industrial Complex for the period to 2010, the following represent key problems regarding employment of the population and personnel and social policy in the Minatom closed zones: preserving and developing collectives of highly skilled specialists and workers consolidating personnel around the fundamental development tasks for the industry sharply increasing labor productivity (output per worker) In addressing the above-specified problems it is necessary to support preserving and effectively augmenting the personnel potential of the industry and stepping up efforts aimed at training and attracting young specialists and scientific personnel, selecting and assigning managers, and working with the reserve pool identifying specialists with critical knowledge that is key to the main thematic directions of activity in the industry and creating a system of priorities in wage payment, work organization, and resolution of social questions developing international cooperation in the training of specialists and creating the necessary training methodology base, training simulators, equipment, manuals, and documentation

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Page 13 improving efforts to organize and equip workplaces, developing and implementing measures to improve workplace safety and safety equipment, and systematically improving qualifications as foundations for increasing labor productivity preserving existing jobs and creating new ones during the process of enterprise conversion and reconstruction and placing top priority on the development of high-tech science-intensive production facilities developing and improving the system of interaction of Minatom with government agencies at the federal, local, and Federation-subject levels in the aim of developing and implementing programs to create conditions favorable for outside investors, preserve and foster scientific and industrial potential, and create new manufacturing enterprises preserving and developing the industry-wide corporate system for ensuring social protection of workers in the industry, providing for their medical-sanitary and pension needs, and organizing worthy conditions for work and rest developing cooperation with regional government agencies on questions of employment of the population, socioeconomic development, education, culture, housing construction, social insurance, and so forth establishing mechanisms for the granting of housing on credit at enterprises of the industry, including mortgage lending, that will guarantee the provision of housing to workers and their family members, especially young specialists Social and personnel efforts in the industry should make it increasingly attractive in the aim of maintaining collectives of highly qualified specialists. The objectives established in social and personnel policy are pursued through the use of consolidated financial assets and include the following key points: implementing a uniform industry-wide corporate system of social protection for workers in the industry that provides for their pensions and medical care and ensures the organization of comfortable conditions for work and rest preserving and effectively augmenting the personnel potential of the industry and coordinating efforts regarding the training of young specialists and scientific staff and the selection and placement of managers expanding interaction with local government agencies in the closed administrative-territorial zones regarding employment of the population, social insurance, housing construction, and socioeconomic development preserving the existing system of social insurance for workers in the industry preparing and adopting the necessary regulatory measures ensuring completion of a certain amount of housing space annually to improve housing conditions for workers in the industry

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Page 14 establishing mortgage lending mechanisms at industry enterprises to guarantee housing opportunities for young specialists sent to work at industry enterprises, which should reduce turnover at nuclear weapons complex enterprises and ensure timely replacement and continuity of workers with critical knowledge and skills The strategy of regional development is substantially based on the promotion and use of effective technologies in production and management and on the creation of linkages with new partners. This gives enterprises, and especially closed zones, new opportunities to expand their activities by participating in the development and implementation of regional strategies. With the implementation of major projects in the regions to create new science-intensive and innovative production facilities using civilian nuclear technologies in cooperation with regional governments and domestic and foreign partners, the enterprises of the Minatom closed zones will gain new business and be able to use their significant technological and industrial potential more effectively. GOALS AND TASKS OF THE PROGRAM The goals and tasks of the program are determined by the Federal Targeted Program for Promoting Employment for the Population of the Russian Federation for 1998–2000, which was authorized by Resolution No. 828 of the Government of the Russian Federation dated June 24, 1998. (See Collected Legislation of the Russian Federation, 1998, Volume 33, Article 4005, and 1999, Volume 26, Article 3184.) These goals and tasks are based on a general agreement among the all-Russian associations of trade unions, all-Russian associations of employers, and the Government of the Russian Federation for 2000–2001. They are also based on the current Industry Wage Agreement for the Atomic Power Industry and the concept of reforming Minatom as presented in the subprogram Reform of Atomic Industry Enterprises (Nuclear Weapons Complex) for the period to 2010, which is part of the Federal Targeted Program for Reform of the Defense Industrial Complex for the period to 2010. The basic goal of the program is to provide employment for the population of the Minatom closed zones and prevent the mass growth of unemployment in connection with layoffs of workers during the reorganization and reform of nuclear weapons complex enterprises. The main tasks of the program are as follows: preserving, developing, and effectively utilizing existing industrial, technological, and personnel potential of the enterprises in the closed zones during the reorganization and reform of Minatom

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Page 15 reorienting laid-off personnel to the development and production of civilian goods and services supporting and developing entrepreneurship and self-employment among the population organizing temporary jobs and public works employment In all, the program calls for creating 17,800 new jobs, providing temporary employment in public works projects for 44,900 people, and providing retraining or training in new professions for 185,300 people. The program is to be carried out from 2002 through 2005. Tables 3, 4, and 5 provide data on the program for the city of Zarechny. KEY AREAS OF PROGRAM ACTIVITIES The key areas of program activities in accomplishing the tasks set for the Minatom closed zones are as follows: improving employment-related laws and regulations in closed zones (conditional work, wages, employment assistance for laid-off workers, improvement in the quality and professional development of the workforce, and so forth). In particular, this pertains to the competence of managing bodies of the industry and to opportunities for their initiative. creating and preserving jobs increasing the efficiency of labor utilization reorganizing and reforming production (basic activity) as a source of jobs promoting improvement of the qualifications and professional mobility of personnel and working with the vocational education system to improve the professional skill structure of personnel in the closed zones ensuring staff rotation to replace highly qualified specialists who have retired from the industry providing employment assistance for vocational school graduates and young specialists developing labor markets at the industry, municipal, and enterprise levels and providing employment assistance for laid-off workers, especially those from enterprises around which the closed zones are based, by resettling them in other regions, placing them in jobs at other industry enterprises, and providing them with housing organizing temporary jobs and public works projects developing social partnership in the industry, in municipal organizations, and at enterprises expanding interaction of closed-zone enterprises with executive-branch agencies of Russian Federation subjects and regional agencies of the Russian Ministry of Labor regarding employment-related issues

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TABLE 3 Employment Situation in Zarechny and Related Assistance Measures     Volume of Financing (in rubles)   Target of Measures Including: 2002–2005 2002 2003 2004 2005 Source and Financing Zarechny Citizens discharged from military service and their family members 76,230 38,110 11,860 5,940 16,350 8,170 21,600 10,800 26,400 13,200 Fed.Budget Ministry of Labor Number of persons 65 12 15 18 20 Persons nearing retirement age 161,200 30,240 10,800 5,400 13,800 6,540 16,800 8,400 19,800 9,900 Fed.Budget Ministry of Labor Number of persons 51 10 12 14 15 Persons released from prison 30,030 15,010 2,980 1,490 5,450 2,720 8,400 4,200 13,200 6,600 Fed.Budget Ministry of Labor Number of persons 25 3 5 7 10 Long-term unemployed (six or more months) 331,100 165,550 61,380 30,690 74,120 37,060 90,000 45,000 105,600 52,800 Fed.Budget Ministry of Labor Number of persons 285 62 68 75 80 Total: 800,600 534,000 266,600 138,000 92,000 46,000 175,700 117,400 58,300 219,600 146,400 73,200 267,300 178,200 89,100 TOTAL Fed.Budget Ministry of Labor Number of persons 456 92 107 122 135

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TABLE 4 Assistance to Development of Self-Employment and Entrepreneurial Initiative     Volume of Financing (in rubles)     Target of Measures Including: 2002–2005 2002 2003 2004 2005 Source and Financing Zarechny Assistance to development of self-employment and entrepreneurial initiative 200,400 200,400 22,500 22,500 39,600 39,600 54,450 54,450 83,850 83,850 Fed.Budget Ministry of Labor Number of persons 37 5 18 10 14 Program to support development of entrepreneurship and self-employment, including:   Training unemployed and nonworking population in basics of entrepreneurial activity 111,200 55,600 12,500 6,250 22,000 11,000 30,200 15,100 46,500 23,250 Fed.Budget Ministry of Labor Number of persons 37 5 8 10 14 Providing financial help to organize entrepreneurial activity 289,500 144,950 32,500 16,250 57,200 28,600 78,700 39,500 121,100 60,600 Fed.Budget Ministry of Labor Number of persons 37 5 8 10 14 Total: 1,002,100 601,100 401,000 112,500 67,500 45,000 198,000 118,800 79,200 272,400 163,400 109,100 419,200 251,500 167,700 TOTAL Fed.Budget Ministry of Labor Number of persons 111 15 24 30 42

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TABLE 5 Material Support for Persons Recognized as Unemployed     Volume of Financing (in rubles)   Target of Measures Including: 2002–2005 2002 2003 2004 2005 Source and Financing Zarechny Payment of unemployment benefits 56,893,100 8,756,000 11,471,000 16,149,700 20,516,400 Ministry of Labor Persons 7,885 1,440 1,715 2,195 2,535 Rendering of material and other aid 90,600 14,300 18,100 25,500 32,700 Ministry of Labor Persons 348 65 75 96 112 Vacations for children of unemployed citizens 889,000 138,500 178,600 254,200 317,700 Ministry of Labor Persons 314 58 68 88 100

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Page 19 EVALUATION OF EXPECTED EFFECTIVENESS OF PROGRAM Implementation of the program will substantially lessen the acuteness of such an important social problem as unemployment, which is caused by the sharp reduction of production volumes for the manufacture of defense-related and other traditional output at nuclear weapons complex enterprises in the Minatom closed zones. Measures for restructuring nuclear and chemical manufacturing enterprises call for them to increase their total output volume of civilian products to 220 percent of year 2000 levels by 2010. Products intended for export should be increased by 120 percent, while export goods should total 39.7 percent of overall production output. In the course of implementing measures for structural optimization and restructuring, assembly line enterprises of the nuclear weapons complex are to increase their total output volume for civilian goods to 500 percent of year 2000 levels by 2010. Output of products intended for export is to be increased by 180 percent. Plans call for the creation and start-up of industrial facilities that will make it possible to produce competitive civilian products valued at 29.5 billion rubles. The proportion of export-oriented products will reach 37.7 percent of the total output volume of conversion-related goods by 2010. The recoupment period for these investments will be two or three years, and the development of these conversion-oriented manufacturing facilities will create about 30,000 jobs for workers laid off from the defense sector. To ensure stable socioeconomic development and provide jobs for the population, local government agencies in the Minatom closed zones are carrying out investment projects to support and develop entrepreneurship and self-employment among the population. These projects are being carried out with funds from local budgets and from outside investments. Local government agencies and the management of enterprises around which Minatom closed zones are based are jointly carrying out measures to create new jobs. These measures will make it possible to provide employment for the population in the Minatom closed zones and prevent the growth of mass unemployment in connection with layoffs of workers during the reorganization and reform of the enterprises of the nuclear weapons complex. Some 17,800 new jobs will be created as a result of programmatic measures to be carried out during 2002–2005. All projects proposed for implementation within the framework of the program are subject to a mandatory environmental impact assessment and will facilitate a substantial improvement in the condition of the environment in areas adjoining nuclear facilities in the closed zones. The basic tasks concerning ecology and industrial waste management at enterprises in the industry include

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Page 20 ensuring the ecological safety of atomic power plants and related industrial facilities during their operation and decommissioning providing for the safe handling of radioactive and toxic wastes during their formation, transportation, processing, storage, and final disposition (burial) rehabilitating natural sites (land areas and bodies of water) polluted with radioactive or toxic wastes during the operation of atomic power plants and related industrial facilities To improve safety for the storage of environmentally hazardous radioactive wastes, a set of measures is planned to renovate and construct warehouses and storage facilities, taking into account the increased demands of safety rules and SNIIP-90. Further measures will be aimed at conservation of storage facilities for radioactive mine tailings. Along with the decommissioning of nuclear facilities, radiation sources, and storage points for nuclear materials, radioactive substances, and wastes, a range of efforts is under way to dismantle contaminated equipment and structures. The rehabilitation of environmental sites (land areas and bodies of water) contaminated with radioactive or toxic wastes during the activity of industry enterprises includes a set of measures to be carried out at industrial sites, in sanitary-protective zones, and in zones under enterprise supervision. MANAGEMENT AND CONTROL OF PROGRAM IMPLEMENTATION Fundamental control of program implementation is carried out by the Minatom industry commission that directed the development of the program. Local government administrations in the closed zones and regional employment offices of the Russian Ministry of Labor also participate in this work, along with the Union of Employers in Atomic Engineering, Industry, and Science of the Russian Federation (SRMAE) and the leadership of the Russian Trade Union of Workers in the Atomic Power and Related Industries (RAEP). The basic task of the industry commission is to ensure that the fundamental goals of the program are achieved in a highly cost-effective manner. In accordance with this goal, the commission carries out the following functions: 1. At the program development stage definition of goals and ways of achieving them determination of work structure and implementers for the entire program period coordination, correction, and approval of the program

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Page 21 2. At the program implementation management stage monitoring of program performance overall and for individual tasks analysis of current status of work and forecasting of possibilities of achieving program goals development, implementation, and monitoring of the execution of management decisions The mechanism for monitoring program implementation consists of the following elements: preparation of annual reports on progress made in carrying out basic program activities, financial resources expended, and the degree to which results obtained correspond to the expected outcome presentation of reports to the leadership of Minatom, SRMAE, and RAEP so that they can be jointly discussed and the appropriate corrections can be made in the program The industry commission includes an information service and management group that analyzes the status of work and prepares information for decision making and operational management of program implementation. One of the most important organizational-economic conditions promoting successful implementation of the program is its inclusion in the Federal Targeted Program of Employment Assistance to the Population for 2002–2005 and the distribution of the corresponding forms of state support to the enterprises participating in realization of the program.