Regions and Countries

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p. 3 of 20 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Pverty Assessment C. Assessment of Socio-Environmental Performance D. Governance E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Kazakhstan : I. Country Performance Assessment

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B. Poverty Assessment

6. Poverty has risen rapidly since Kazakhstan attained independence in 1991. The current economic growth is narrow-based (mainly oil, gas and metal subsectors) and has not led to a widespread improvement of the people’s living standards. As a result, poverty remains a serious problem. The Government indicates that 43 percent of the population lived below the poverty line in 1999, compared with 25 percent in 1992. Poverty is more pervasive in rural areas than in urban areas, and those most affected are pensioners, women, and children.

7. The sharp rise in poverty was caused by the persistent economic difficulties. The economic contraction resulted in the increase in unemployment and the decline in personal incomes. Hyperinflation eroded real wages and social allowances to a fraction of the pre-independence values. Due to severe fiscal constraints, arrears on wage and pension payments in the public sector occurred, the Government’s social expenditures were sharply reduced, and the delivery of social services (such as basic education and primary health care) and social assistance deteriorated.

8. The Government is conscious of the urgent need to address the poverty problem and approved a state program on fighting poverty and unemployment in June 2000. The program, which will be implemented during 2000-2002, aims at poverty reduction through the creation of income-generating job opportunities, improvement of social services delivery, and strengthening of social safety nets. In particular, the program proposes to reduce the rate of unemployment from 13.5 percent in 2000 to 9 percent in 2002. To effectively implement the antipoverty program, efforts are needed in three areas. First, a comprehensive poverty analysis should be undertaken to examine the causes and extent of poverty, and options for poverty reduction. Moreover, measures need to be taken to promote pro-poor, sustainable economic growth and social development, and improve governance. Special attention should be paid to stimulating development of small and medium-size enterprises (SMEs) and strengthening institutional capacities of local governments and communities, which are primarily responsible for delivering basic public services and providing social assistance to the poor. Finally, the international aid community needs to provide timely financial and technical assistance.

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