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Kyrgyz Republic Poverty and Inequality in 2009 Sarosh Sattar Europe and Central Asia Region The World Bank October 6, 2011. Outline of presentation. Motivation Objectives Developments in poverty and inequality over 2006-2009 Poverty profile: selected characteristics

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Kyrgyz republic poverty and inequality in 2009 sarosh sattar europe and central asia region

Kyrgyz Republic

Poverty and Inequality

in 2009

SaroshSattar

Europe and Central Asia Region

The World Bank

October 6, 2011


Outline of presentation

Outline of presentation

  • Motivation

  • Objectives

  • Developments in poverty and inequality over 2006-2009

  • Poverty profile: selected characteristics

  • Concluding remarks


Motivation

Motivation

  • Opportunity to show the importance of micro data to really understand what is happening to the population in the Kyrgyz Republic

  • Economic growth does not benefit all groups equally therefore it is important to look at disaggregated data


Objectives

Objectives

  • To monitor development’s in the population’s welfare – especially those who are the most vulnerable

  • A descriptive report which complements the National Statistical Committee’s publication on poverty indictors

  • Stimulate interest by raising more questions than are answered


Kyrgyz republic poverty and inequality in 2009 sarosh sattar europe and central asia region

Dynamics of Poverty

& Inequality,

2006 - 2009


Economic context large movements in macroeconomic aggregates

Economic ContextLarge movements in macroeconomic aggregates


Poverty was responsive to economic growth

Poverty was responsive to economic growth


Large decrease in poverty rates

Large decrease in poverty rates


Growth improved the livelihoods of lower income groups more

Growth improved the livelihoods of lower income groups more….


Mean consumption in 2006 2009

Mean consumption in 2006 & 2009


By 2009 share of salaries fell and pensions rose compared to the previous year

By 2009 share of salaries fell and pensions rose compared to the previous year


Inequality fell as measured by the gini coefficient

Inequality fell as measured by the Gini coefficient


Also the share of consumption increase for the bottom 80 of the population

Also, the share of consumption increase for the bottom 80% of the population


Macro and micro points

Macro and micro points

  • What we know….

    • Before 2008 economic growth and remittances went hand in hand with falling poverty rates

    • In 2009 there were dramatic changes in growth, remittances, and public expenditures and poverty remained level

  • What we don’t know

    • Why the bottom 40 percent of the population benefited the most in 2006-2009.

    • What economic developments occurred that were “pro-poor” and are they a result of government policies?


A puzzle

A puzzle…..

Why using household level data raises interesting questions for policy makers… and example


Rural and urban changes in mean consumption differed somewhat

Rural and urban changes in mean consumption differed somewhat


Significant reduction in rural absolute poverty

Significant reduction in rural absolute poverty


But agriculture did poorly so what led to poverty reduction in rural areas

But agriculture did poorly. So what led to poverty reduction in rural areas?


What could be happening

What could be happening….

  • Farm income rose due to high food price increases but volume didn’t change

  • Non-farm income is rising

  • Remittances could have increased substantially

  • …. Or something else


Another puzzle

Another puzzle…..

Large differences across regions and large changes over just a few years….


Significant differences across mean consumption per capita by oblast

Significant differences across mean consumption per capita by oblast


Large declines in poverty but also big differences

Large declines in poverty but also big differences


Poverty rates and mean consumption are strongly correlated

Poverty rates and mean consumption are strongly correlated

Osh’s poverty rate is relatively high


Obvious questions

Obvious questions

  • Why is there such high diversity among mean consumption levels and poverty rates across oblasts?

  • What factors could explain this?

    • Private sector development?

    • Education and productivity of labor?

    • Government spending?

  • Why are changes in poverty rates so dramatic but different across oblasts?


Kyrgyz republic poverty and inequality in 2009 sarosh sattar europe and central asia region

POVERTY PROFILE

2009


Geography matters for poverty

Geography matters for poverty


Larger households associated with higher risk of poverty

Larger households associated with higher risk of poverty


Higher poverty in households with more children

Higher poverty in households with more children


Distribution of poor by employment status

Distribution of poor by employment status


Poverty rates among household heads by employment status

Poverty rates among household heads by employment status


Kyrgyz republic poverty and inequality in 2009 sarosh sattar europe and central asia region

Extreme poor more dependent on social assistance, but no significant difference between poor and nonpoor


Poverty distribution and rates in terms of education hh head negative relationship

Poverty distribution and rates in terms of education (HH head): negative relationship


Kyrgyz republic poverty and inequality in 2009 sarosh sattar europe and central asia region

Concluding Thoughts


Key messages

Key Messages

  • Macroeconomic developments had a significant impact on the population’s living standards and the welfare of low income groups

  • Many interesting and unresolved issues of poverty and development

  • A large research agenda remains that could help policy makers pursue more thoughtful solutions


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