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REGIONAL OUTLOOK – EASTERN EUROPE AND CENTRAL ASIA
Eastern Europe and Central Asia (ECA) is a diverse region composed of a total of 12 countries,
with a population of roughly 280 million people. It includes seven countries located in Eastern
Europe –Armenia, Azerbaijan, Belarus, Georgia, Moldova, the Russian Federation, and Ukraine;
and five countries located in Central Asia - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan,
and Uzbekistan.
Two decades after the end of the Soviet era the countries of the region have taken very diverse
socio economic trends and levels of political and economic stability.
The region has largely become a Russia-centered trade bloc, with trade dominated by commodity
exports. Azerbaijan and Kazakhstan have attracted significant foreign direct investment, mostly
in their oil sectors. Russia represents more than three quarters of the region’s GDP and, as the
world’s largest country, it is also a critical actor of the ECA region global development issues
(World Bank, 2011). What happens in Russia affects the region’s economic prospects.
Prior to the 2008 financial crisis most of the region’s countries were enjoying rapid growth levels
driven by trade, capital flows and remittances. Significant achievements were made in meeting
the Millennium Development Goals (MDG). However, ECA was also the region the hardest hit
by the financial crisis. According to the World Bank, growth declined more than in any other
region, and it has been the slowest to recover (World Bank, 2011).
POLITICAL AND SOCIO ECONOMIC TRENDS
According to the UNDP Human Development Index (HDI), over the last three decades, Armenia,
Azerbaijan, Belarus, Georgia, Kazakhstan, the Russian Federation and Uzbekistan have
converged to an HDI of above 0.7. Belarus has the highest score of 0,777. Overall, when
compared to other developing countries, the growth of the HDI has remained modest. According
to the UNDP, the main reasons are the continuing concerns relating to high levels of inequality,
security issues and the poor political stability of these countries.
For instance, Russia presents significant contrasts in socio-economic conditions across its 83
regions. In 2008, headcount poverty rates ranged from 38 per cent in Kalmykia (in the south) to
7.4 per cent in oil-rich Khanty-Mansiysk (World Bank, 2011). Moreover, since 1991 the gap
between rich and poor has widened. According to the ILO, while in 1991 the 20 per cent poorest
received 12 per cent of total national income, and the 20 per cent richest the 31 per cent, by 2003
the 20 per cent poorest received only 6 per cent, and the richest received 47 per cent of total
national income (ILO, 2008). Providing access to social services and infrastructure of comparable
quality across this expansive terrain is a principal development objective in Russia.
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HDI development trends in ECA (1970-2010) (UNDP, 2011).1
The lowest income countries of the region, with an HDI below 0.7 - Kyrgyzstan, Moldavia,
Tajikistan, Turkmenistan and Uzbekistan; remain vulnerable, and, over the past two decades,
have achieved little progress in terms of poverty reduction, health standards and GDP per capita.
In particular, due to high levels of corruption and the threat of violence, democracy standards in
Tajikistan and Uzbekistan are the lowest of the region, with tendency towards authoritarianism
(Freedom House, 2011).
Even if absolute poverty is decreasing across the region, according to the MDG 2010 report, parts
of the ECA region are not expected to achieve the MDG 1 target – to halve between 1990 and
2015 the proportion of people whose income is less than $1 a day. In particular, in Central Asia
countries the percentage of people living with less than USD 1.25 a day has increased from 6 per
cent to 19 per cent between 1990 and 2005 – and in 2009, 21 per cent of the population was
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Turkmenistan current HDI value is of 0,669. No available data prior to 2005 (UNDP, HDI).
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registered as living in extreme condition of poverty (MDG, 2010: 6). According to the OECD,
poverty has declined far more rapidly in capital cities than elsewhere, but rural residents still
count for some 70 per cent of the poor in low-income countries of the region (OECD, 2007: 5).
ECA countries differences in population, GDP and urban population (OCED, 2007: 5).
Equally, in terms of hunger rates and sanitation infrastructures ECA countries show alarming
figures. According to the FAO, in 2002 18 per cent of the population of these countries suffered
from hunger. In particular the most affected were Armenia (22 per cent) and Tajikistan (46 per
cent) (FAO, 2010b). Also, access to human needs, such as supplies of clean water and sanitation,
remains limited for a large part of the population given that between 25 per cent to 50 per cent of
(mostly rural) population has no access to sanitation (WHO, 2005). According to WHO, over 50
per cent of the population in Armenia, Georgia, Moldova, Ukraine and most of Central Asia use
wood or cool for cooking on open fires or rudimentary stoves, leading to bad indoor air quality
and associated respiratory effects.
MIGRATION FLOWS
One of the most significant post-transition challenges for many ECA countries is the regulation of
migration flows. The transition process has both eased constraints on migration and strengthened
some of the incentives to migrate. Today, across the region, migration represents one of the main
coping strategies to escape from poverty.
After the transition, migrations routes were established between Russia, as a destination country,
and the majority of the CIS countries. Also, three routes were established between Germany, as
country of destination, from Kazakhstan, the Russia Federation, and Ukraine. For the majority of
these economies the emigration flow represents more than 10 per cent of the total population
(Mansoor, 2007). Accordingly, labour emigration has seriously eroded the social fabric
exacerbating the problem of depopulation. This combined with ageing population contributes to
make pension systems more unsustainable, aggravating an acute challenge that requires
immediate policy attention.
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Migration flows in ECA region (World Bank, 2011).
In particular, remittances sent by migrant workers to their families are a major source of
livelihood for large parts of the population in Central Asia, in the Republic of Moldova and in
Ukraine. According to the Central Bank of Russia, personal remittances from Russia to CIS
countries in 2009 added up to 13 billion dollars (Klomegah, 2010).
Representing more than 10 per cent of the GDP of some countries, the inflow of remittances has
been a key contributor to increasing consumption and falling levels of poverty (World Bank,
2011). As a consequence, these countries have also been the most directly affected by the
financial crisis, as this flow of remittances dropped significantly in the fourth quarter of 2008. In
some cases, the decrease was of more than 25 per cent, with serious implications for living
standards and investment in health and education for the poorest segments of the populations in
the receiving countries.
Remittances as a Portion of GDP (2004), Current US Dollars (World Bank, 2011).
Across the region, patterns of human trafficking routes have also increased. Overall, all countries
are sources and recipients of human trafficking. For instance, according to the 2010 Annual
Survey of violation of trade unions rights, more than 700 workers from the Balkans have been
victims of labour trafficking in the Republic of Azerbaijan (ITUC, 2010/Europe). This is setting
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back not only economic development, poverty reduction and social protection, but also any
immediate hope of achieving gender equality and human rights.
Map countries of origin and of destination of human trafficking.
LABOUR STANDRADS AND OPPORTUNITIES
From employees state-owned firms, or state and collective farms, transition reforms have led to
rapid structural shifts in the economy and many new alternative forms of engagement and jobs
have been generated, including in the informal sector. As a consequence, the rules and regulations
of product and labor markets now dominate.
In the socialist period participation rates were relatively high across the ECA region. Today the
picture is very different, as widespread labour non-participation and unemployment have become
common phenomena. In particular, the costs of adjustment appear to have been disproportionately
borne by less-educated workers, particularly older men, both in terms of reduced wages, much
greater economic insecurity, and lower life expectancy. Across the region, workers with primary
and lower secondary education have much higher unemployment rates than do workers with
higher levels of education (Rutkowski, 2006).
According to the ILO, across the non-EU ECA countries the average unemployment rate is above
10 per cent (ILO, 2011: 79). In particular the highest rate of unemployment are registered in
Kirgizstan, and Turkmenistan.
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CIS unemployment trend (ILO, 2011: 79).
Evidence suggests that underemployment may be a problem in Central Asia, as employment in
subsistence agriculture and in the informal sector – both of which are associated with low wages
– appear to absorb a significant share of the population who would otherwise be unemployed
(Rutkowski, 2006).
In general, informal sector employment plays a large role in the region low-income countries.
According to the MDG 2010 report, the informal sector employment rate in the region was of
44per cent in 2009. Moreover, about 21 per cent of workers were living with less than USD 1,25
per day in 2009. Across the region the informal sector is a primary source of income for
individuals who cannot find work in the formal sector (UNDP, 2010: 8).
All ECA countries have ratified the eight ILO core Conventions (except Uzbekistan, which has
not ratified Conventions No. 87 and 138). Instead, the ratification of other ILO Conventions
varies according to countries, for instance Uzbekistan has ratified 12 Conventions and Georgia
16. Also, in Kazakhstan, Russia and Ukraine, measures were adopted in agreement with social
partners to prevent mass dismissals and unemployment.
However, in practice the application of the laws pertaining to trade union rights remains
inadequate in a number of countries of the region. For instance, in the Russian Federation a
complaint was filed with the ILO concerning the continuous attacks on trade union leaders and
anti-union harassment, government interference, the refusal to register and recognize trade unions
and an overall lack of effort in investigating violations of trade union rights (ITUC,
2010/Europe).
Moreover, although average indicators of social security coverage may be high, a significant
gender gap shows up frequently across the low and medium-income ECA countries as elderly
women are covered to a much lesser extent than elderly men (ILO, 2010: 54). New social
protection schemes need to address the specific vulnerabilities of some women’s group such as
ethnic minorities, migrants, women heads of households; divorced, widowed and/or elderly
women.
ENVIRONMENTAL CHALLENGES
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The region is blessed with abundant natural resources, including oil, gas, coal, metal ores and
fresh water, as well as areas rich in biodiversity. The Russian Federation alone has a forest area of
8.1 million km2 (UNEP, 2007: 236). However, over the last thirty years these resources have
been severely challenged and are at great risk due to the lack of specific regional policy
instruments regulating for their use. Factors that threaten biodiversity and ecosystem functions
include rapid changes in land use, extensive but poorly managed irrigation, more intensive use of
rangelands, medicinal and food plant collection, construction of dams and fuel wood collection
(UNEP, 2007: 220).
In Central Asia, due to large-scale exploitation of natural resources, most of the inland
ecosystems have been severely depleted. For example, extraction, transportation, transformation
and use of all forms of energy have had significant environmental impacts caused by oil drilling,
coalmines, pipelines, dams and thermal power stations.
Achieving environmental improvements remains specially challenging in the low-income
countries of the region.
Climate change
ECA faces significant threats from climate change, with a number of the most serious risks in
evidence. According to the World Bank, average temperatures have increased by 0.5°C in the
southern countries of the region to 1.6°C in the north (Siberia), and overall increases of 1.6°C to
2.6°C are expected by the middle of the century (World Bank, 2009: 18). Above all, the most
affected regions have been the Arctic regions of Russia, were the temperature has increased by up
to 3°C over the past 90 years (Russian 3rd Nat. Comm. 2002, ACIA 2004).
According to the UNDP Human Development Report, the origin of increasing regional water
supply and energy issues across the region is closely related to environmental challenges caused
by climate change (UNDP, 2005: 99). This is directly affecting hydrology, with a rapid melting of
the region’s glaciers and a decrease in winter snows. Many countries are already suffering from
winter floods and summer droughts, with both Southeastern Europe and Central Asia at risk for
severe water shortages. In particular, according to the Intergovernmental Panel on Climate
Change Fourth Assessment Report, by the 2050s, in parts of Central Asia, fresh water availability,
especially in large river basins, is projected to decrease (IPCC, 2007: 50). Also in Eastern Europe,
summer precipitation is projected to decrease, causing higher water stress, loss of forest
productivity and increase of peatland fires (IPCC, 2007).
MAPA MAR CASPIO
Given that the environmental vulnerability over the next 10 to 20 years will be dominated by
socio‐ economic factors and legacy issues — notably the critical current environmental situation
and the poor state of infrastructure — rather than by the changing climate itself, it is clear that for
the low-income countries of the region the impact of climate change will be more challenging
when compared to neighboring countries with a higher-income (World Bank, 2009: 18).
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World Bank Simplified Index of Vulnerability to Climate Change (World Bank, 2009: 18).
Compared to other regions of the world, the energy intensity and carbon footprint of the region
are among the highest of the world. With its vast pristine territory (22 per cent of the world’s
undisturbed ecosystems) and as the third-largest emitter of greenhouse gases, the Russian
Federation is essential to solutions for climate change across the region.
Air quality and transport
According to UNEP, the level of air pollution in the largest cities of Russia, Ukraine and
Moldova has increased over the last years, and frequently exceeds WHO air quality standards.
This high level of pollution is mainly caused by an increase in particulates, nitrogen dioxide and
benzo(a)pyrene. In Russia, the number of cities with concentrations of benzo(a)pyrene over
maximum allowable concentration has increased in the last five years, reaching 47 per cent in
2004 (UNEP, 2007: 235).
Land-use change and biodiversity loss
In Central Asia, where 60 per cent of the population is engaged in agriculture, land has been a
central component of development, but yet another source of major environmental concern.
The case of the Ferghana Valley, located between the borders of Kirgizstan, Tajikistan and
Uzbekistan, combines the main environmental challenges of the region and their socio-economic
impacts. Areas within the Ferghana Valley are subjects to significant disputes over water
resources and borders, disputes between private and collective farmers, deforestation and overuse
of pasture. Furthermore, this area is suffering from severe industrial pollution and chemical risks
caused by badly maintained radioactive dumps, tailing containments and several working
industrial facilities (UNEP & All., 2004).
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Environment and Security priority area in the Ferghana Valley.
Also, over the past 10 years the massive diversion of water for irrigation has resulted in the
widespread destruction of ecosystems. In Central Asia land salinization, swamping,
desertification and declining ecosystems have increased by quarter and a half (UNECE, 2010:
12). The Aral Sea has lost 90 per cent of its volume since the early 1960s and its biodiversity is
probably irretrievably lost. Moreover, the lack of progress in these areas is a cause of rising
tensions between Central Asian countries.
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The disappearance of the Aral Sea (UNEP, 2008).
Across Eastern Europe subsistence agriculture is now spreading again, since 1990 (UNEP, 2007:
236). Socio-economic conditions in rural areas with small-scale farming are generally
unfavorable, leading to low incomes, difficult working conditions and a lack of social services, all
of which makes farming an unattractive option for young people. The result is population loss
from rural areas and land abandonment. For instance, over 200,000 km2 of arable land have
already been deserted in the Russian Federation and this trend is expected to continue
(Prishchepov & All., 2006). With such abandonment traditional management practices also
disappear, and high-nature value farmlands are degraded. For instance, the grasses are no longer
kept short thanks to controlled winter fires and sheep encroachment.
Forestry is another source of environmental issues. Although the countries of the region have
laws designed to support the sustainable management and use of forest resources, illegal
harvesting, human-induced forest fires, law enforcement problems and unsustainable forest and
agricultural land use have been contributing to forest degradation in a number of countries.
According to the FAO, further work is needed to highlight the ecological, economic and social
role of forests and forestry across the region, and the related change in the rural socio-economic
conditions of the areas afflicted by deforestation (FAO, 2010: 3).
Hazardous waste
Across the region, many countries have to deal with accumulated hazardous waste generated
during the Soviet era. It includes mainly radioactive, military and mining wastes, but there are
also large stockpiles of obsolete pesticides containing persistent organic pollutants. The lack of
funds for proper disposal makes them a large risk to the environment (UNEP 2006).
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Radioactive, chemical and biological hazards in Central Asia. Designer: Philippe Rekacewicz, UNEP/GRIDArendal (UNEP, 2005).
Moreover, the current total waste generation per capita in ECA is 14 tones per year, which is
relatively high compared with other regions in the world (e.g. four tones in the EU). A substantial
part of waste generated in the ECA countries is hazardous and between 400 and 500 million tones
of hazardous waste are generated across the region every year, constituting 12–18 per cent of total
waste generation (EEA, 2007: 152).
Progress is taking place at waste policy development level, but is not accompanied by action
plans and effective legislation, including for hazardous waste. Armenia and the Russian
Federation have issued regulations restricting transboundary movements of hazardous waste and
projects on persistent organic pollutants have been launched in Belarus and Georgia. Also,
international support is facilitating progress in chemicals management. However, there are no
systematic procedures and plans to clean up contaminated land.
Water and sanitation
As earlier mentioned in this report, water and sanitation figures across the region are critical.
Countries in Central Asia lack the appropriate chemicals for water purification, and piped water is
often untreated and consumers receive water that is below microbiological health standards. An
evidence of this issue are high rates of mortality from water-borne diseases in Central Asia, where
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only the 78 per cent of the population has access to safe drinking water (UNEP, 2007: 218). In
particular, urban-rural disparities are significant.
Central Asian countries urban-rural access to improved drinking-water sources (UNICEF, 2006: 24).
Sanitation. Rural areas coverage. (2004). (UNICEF, 2006: 24)
For instance, a critical example is the case of Armenia, were sections of its water supply and
sanitation infrastructure are in disrepair, and occasionally even non-existent. The wastewater
network collects sewage from 60–80 per cent of urban areas, but raw sewage is mainly
discharged directly to receiving waters, as only a few of the 20 treatment plants constructed
before 1990 are still in operation. About 63 per cent of all wastewater collectors were built about
40–45 years ago, and are now in a state of decay (UNEP, 2007: 238).
Green Jobs
There are few data available analysing the promotion and presence of green jobs in the ECA
region. At the country level, some initiatives sponsored by aid agencies, such as USAID, and
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private actors are trying to address the issue, but lack of visibility. Governments remain reluctant
to promote large-scale programs, even if they seem to acknowledge the importance of
environment aspects. For instance, last March the Russian Prime Minister announced that local
governors’ job performance would be assessed in part on their environmental record. According
to this new rule, officials are required to measure local emissions and assess their progress in
meeting recommended thresholds. Also, officials are required to evaluate the quality of water and
soil, and verify if local factories are using eco-friendly technology (RT News, 2011).
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CONCLUSION
Despite the Soviet era common background, the countries of the region have taken vey different
path, more or less successful, in handling economic development and sustainable policies.
Similarly, the Eastern Europe and Central Asia countries represented in this report display a high
bio-geographical diversity. Predicted climate change impacts are similarly varied, ranging from
land use changes in Eastern Europe, to desertification in the lowlands of Central Asia and melting
of glaciers in the alpine zone of the Caucasus.
Environmental authorities in most of the region face structural and political constraints, as well as
low environmental awareness of the public and economic agents, which is often related to public
administration practices inherited from the Soviet era. Evidence shows that the low-income
countries of the region, which incidentally are more vulnerable politically, are the most exposed
to climate change. Water, energy and environmental sustainability in Central Asia are inseparably
interlinked and have very significant region-wide dimensions that call for regionally coordinated
action.
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