Download Kazakhstan Challenges and Achievements in Poverty

Kazakhstan:
Challenges and Achievements
in Poverty Reduction
Sarosh Sattar
The World Bank
May 4, 2005
Outline of today’s presentation






Changes in poverty over time
Characteristics of the poor
Linkage of poverty and economic growth
Access to services
Social Safety Net
Conclusions
2
Changes in Poverty
Trends in aggregate poverty
National Poverty Trends
45
120
40
100
30
80
25
60
20
15
40
(in '000 tenge)
(in % of populationa)
35
10
20
5
FBS
HBS
WB
2004
2003
2002
2001
2000
1999
1998
-
1997
-
GDP per capita
Sources: World Bank and National Statistics Agency.
Note: NSA poverty estimates are based on Family Budget Survey (FBS) and Household Budget Survey (HBS).
WB refers to World Bank estimates based on Household Budget Survey.
4
What averages can hide:
Rural – urban poverty differentials
Poverty Rates in Rural Areas and Cities
25
(in percent)
20
15
10
5
0
2001
Rural
2002
Small cities
Medium cities
2003
Large cities
Source: World Bank staff computations based on HBS 2003.
5
Oblast level poverty rates
Oblast Poverty Rates in 2003
25
22
22
South-Kaz
26
Jambyl
(in % of oblast population)
30
20
20
16
Kyzylorda
Aktobe
Kostanay
Almaty
11
Atyrau
10
East-Kaz
8
9
Akmola
7
North-Kaz
6
Pavlodar
4
Mangystau
1
4
West-Kaz
-
1
Astana City
5
Almaty City
10
9
Karaganda
15
Source: World Bank staff estimates based on Household Budget Survey (NSA).
6
…But poverty is multi-dimensional and
widespread
Consumption
Housing
6%
5%
18%
1%
.4%
2%
5%
Education
Poor=37%
Source: calculations using KHBS 2003.
1/ The people over 15 who at most completed primary education
2/ The housing poor are those who live in crowded conditions (with less than 6 square meters per person)
or take water from public water pumps or public wells that located more than 100 meters from their
dwelling, or use of water from a spring, lake, pond, or river.
7
Characteristics of the poor
Prevalence of poverty by age group
(in percent of age group)
Poverty Rates by Age Group
25
20
15
10
5
0
0-4
5-9
10-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75 +
(in years)
Source: World Bank staff computations based on HBS 2003.
9
Some correlates of poverty
Household size
Average number of children
Average number of prime-age adults
Average number of elderly
Households with children <6 years (%)
Dependency ratio among households with any prime-age adults
Headed by females (%)
Source: World Bank staff estimates based on HBS 2003.
Bottom
6.3
2.7
3.2
0.5
Top
3.1
0.7
1.9
0.5
Ratio of
Bottom/Top
2.0
3.9
1.7
1.0
49
1.2
30
12
0.7
55
3.9
1.7
0.6
10
Escaping poverty
The probability of being poor decreases if
 Urban resident in large city
 Head of household is employed
 Fewer children
 Small household size
 Higher education degree
 Own assets such as land or livestock
11
Poverty and
Economic Growth
International Comparison of Poverty
International Comparison of Poverty and Income
(Share of population below
poverty line of $2.15 (PPP)
16,000
14,000
12,000
10,000
Russia
8,000
Kazakhstan
6,000
4,000
2,000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Poverty Rates using $2.15 (PPP corrected)
GDP per capita PPP
Power (GDP per capita PPP)
Sources: World Bank staff estimates and World Development Indicators.
13
Poverty is correlated with the level of
economic development—usually
Oblast Poverty and Income Levels
Poverty in % of oblast population
30
25
20
15
10
5
-
200
400
600
800
1,000
1,200
Value-added per capita in '000 tenge
Non-oil
Oil
Power (Non-oil)
Source: World Bank staff estimates based on HBS 2003 and national accounts data from NSA.
14
Poverty reduction and growth in oblasts
Economic Growth and Reduction in Number of Poor, 2001-2003
(in % change in number of poor)
40
20
0
-20
-
10
20
30
40
50
60
-40
-60
-80
-100
(in % change in average consumption per capita)
Decrease in number of poor
Linear (Decrease in number of poor)
Source: World Banik staff computations based on NSA national accounts and HBS 2001-2003 data.
15
Human Development
Life expectancy rates indicate a crisis
Europe and Central Asia: Life Expectancy and Income
85
(in number of years)
80
75
70
Kazakhstan
65
60
55
50
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
GDP per capita in US$ PPP-corrected
Source: World Development Indicators.
17
Infant mortality rates are correlated to poverty
Poverty and infant mortality rates by oblast
40
Poverty rates (in %)
35
30
25
20
15
10
5
0
10
12
14
16
18
20
22
24
26
Infant Mortality Rates
Source: World Bank staff estimates based on data from MOH and NSA (2002).
18
Education: School Dropouts
Secondary School Dropouts
(in % of age cohort)
25.0
20.0
15.0
10.0
5.0
0.0
18-22
23-27
Male
Female
All
Source: World Bank staff computations based on HBS 2003.
19
Under-utilization of human capital
(in percent of age and sector cohort)
Unemployment rates by age and sector
25
20
15
10
5
0
20-24
25-29
Male Urban
30-39
Female Urban
40-49
Male Rural
50-59
Female Rural
Source: World Bank staff computations based on HBS 2003.
20
0
Atyrau
Kyzylorda
Jambyl
Kostanay
North-Kaz
East-Kaz
Mangystau
Karaganda
West-Kaz
South-Kaz
Almaty
Aktobe
Pavlodar
Astana City
Akmola
Almaty City
(in % of 18-29 year olds by oblast)
Human capital in limbo?
Youth: Out of School and Out of the Labor Force
45
40
35
30
25
20
15
10
5
Source: World Bank estimates based on HBS 2003.
21
Access to Services
Urban access to two essential services
How many don't have access to key services in cities?
66
70
(in % of city's population)
61
60
50
40
28
30
20
20
17
12
10
Large cities
Medium-sized cities
Piped Water
Small cities
Sewerage
Source: World Bank staff computations based on HBS 2003.
23
Urban access rates for sewerage is
correlated with value-added per capita
Value Added per capita and Urban Access to Sewerage
1,200
(in % of population)
1,000
800
600
400
200
-
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
(in KZT)
Non-oil
Oil
Power (Non-oil)
Source: World Bank staff computations based on NSA national accounts data and HBS 2003.
24
Access to infrastructure services


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Though the urban poor are less likely to have
access to piped water and sewerage in their
dwelling than the better off, many of the
middle and upper class lack access as well
Access to services in urban areas mirrors the
general level of economic development for
non-oil oblasts
Rural sector access to infrastructure services
is very low
25
Social Safety Net
Three main criteria for success of a
poverty reduction program
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

Maximize coverage of the beneficiary group
Minimize leakage of benefits to the non-poor
Adequacy of benefits in raising people out of
poverty
27
Coverage of social protection programs
Social Protection Program Coverage
(% of quintile receiving benefits)
40
35
30
25
20
15
10
5
0
Old Age Pension
Targeted SA
Housing Benefit
Q1
Q2
Q3
Q4
State Allowances
Speacial State Allowances
Q5
Source: Staff estimates based on HBS 2002.
28
Poverty rates among program recipients
Poverty Rates among Program Recipients
(in % of recipients)
50
45
40
35
30
25
20
15
10
5
All SP Benefits
Pensions
Current Poverty
TSA
Housing Benefits
State Social
Allowances
Special State
Allowances
Poverty in absence of program
Source: Staff estimates based on HBS 2002.
29
Government financing of social protection programs,
2002
As a proportion of (in %)
GDP
Social spending Population
Total social protection expenditures
5.4
100
Republican budget
4.4
82
Pension program
3.2
59
11.4
State social allowances
0.9
16
5.3
Special state allowances
0.1
3
0.9
Local Budgets
Special state allowances
Targeted social assistance
Housing benefits
1.0
…
0.2
0.1
18
…
5
1
5.9
7.6
Number in '000
Recipients
1,691
792
134
874
1,137
Source: Ministry of Finance and Ministry of Labor and Social Protection
30
Conclusions 1

How to help the poor?
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
Further develop targeted program of cash
transfers (TSA Program)
Provide basic infrastructure services in sewerage,
clean water, and heating
Economic development at the oblast level
31
Conclusions 2

Further work to be carried out
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Why is rural poverty falling relatively slowly?
Why has urban poverty fallen so fast?
How do the rural poor manage in terms of access
to clean water, sanitation facilities, and heating?
What are the developments in the demand for
education?
What are the causes of the low life expectancy
rates?
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