Income Inequality and Poverty in Ukraine and Transition to the Market Economy. Yevgeny Orel, C.Sc.(Econ.), Docent Faculty of Economic Science National University “Kyiv-Mohyla Academy”. Outline of the presentation. Introduction Deprivation and poverty Basic definitions Selected statistics
Yevgeny Orel, C.Sc.(Econ.), Docent
Faculty of Economic Science
National University “Kyiv-Mohyla Academy”
The Government of Ukraine and people of this country are in the process of transition to democratic governance, market economy and integration into the global system. This means the transition towards prosperity for all Ukrainian citizens. Prosperity for Ukrainians is the ultimate and permanent objective and the most desired result. To this end, the process of poverty alleviation is a must.
HDI of Kiev oblast is 0.738 (Income index 0.603)
Kyiv city 0.811 (0.687)
Transcarpathian oblast 0.661 (0.475)
Ukraine overall 0.736 (0.579)
Agricultural sector provides for 30% of GDP and 30% of total employment;
Economic growth in Ukraine owes the most of it to agricultural growth.
It concerns both sharing income and participation in the decision-making process:
the ratio of women’s wages in non-agricultural sector amounts to 71% of that of men;
the female representation at the legislative bodies amounts to 8%.
WB/SCS: female poverty exceeds that of male by 4-5 pp
People (%) considering environmental problems critical for Ukraine (UNDP/DFID data):
Air pollution (86%)
Unsafe drinking water (83%)
Nuclear safety, lack of (83%)
Poor people become victims of the above problems more than any other group.
Ukraine: The largest HIV/AIDS infection incidence, 1-1.5% infected (as estimated compared to formal statistics)
High correlation between poverty and HIV/AIDS incidence (?)
Poor are more vulnerable (?) in terms of:
Greater chances of getting infected (poorer prevention and lack of information)
Lower capability to combat infection and disease
It results from unequal distribution of income
cited after David C. Colander
The same relates to other countries, Ukraine with its 55% of GDP in the “shadow” (the second economy) is not an exception.
Regions (and countries)
Gini coefficients for income per capita
Central Eastern Europe (Cz, Hu, Slo, Pl)
South Eastern Europe (Alb, Bulg, Cro, Mc, Ro)
Baltic States (Lith, Lat, Est)
CIS and Western FSU (RF, UA, Mld, Blr), incl.:
Caucasus and Central Asia (Ar, Gr, Krg, Kaz, Tdj, Trkm)
Income inequality in Eastern Europe
before and after transition
Source: World Bank (2000), Making Transition Work for Everyone: Poverty and Inequality in Europe and Central Asia, Washington DC: The World Bank. - Table 4.1.
Note: Gini coefficients in this and previous slide were calculated for income (not earnings) distribution.
“Poverty as a social problem was either unknown or well-dressed up in Eastern Europe before the disintegration of socialist regimes.”(Dimitri A. Sotiropoulos)
Are these two really peculiar only to Ukraine?
The latter finding is consistent with findings for Poland (Keane and Prasad, 2002), and Russia (Brainerd, 1998)
“You can’t feed people with macroeconomic indicators”(Anatoly Kinakh, 1st Vice-Premiere)
A fish or a fishing-rod?
“Combating poverty remains my top goal.” (Viktor Yushchenko, President of Ukraine)
Source: Waiting for the next dominoes. Economist; 1/15/2005, Vol. 374 Issue 8409, p40, 1/3p