In 2015, the UN member countries adopted Sustainable Development Goals (SDGs) aimed at improving life quality of people all over the world. The first of seventeen goals was to end poverty in all its forms everywhere by 2030.
Up to 2020, there was a positive trend in poverty control. Since 1990s, the proportion of people in the world who lived in extreme poverty, i.e. earned 1.9 dollars a day, declined from 35 per cent to 8.4 per cent. As of the beginning of last year, the number of people living in extreme poverty in the world was 689 million people, or 9.2 per cent of all population, and by the end of the year, according to preliminary estimates, the number of the poor increased by 14-40 million.
Also, the Covid-19 pandemic unleashed the new wave of poverty in Kyrgyzstan. In 2020, the poverty level increased by 5.2 per cent compared to the previous year, and was 25.3 per cent across the country.
Extreme poverty rate in the Kyrgyz Republic is 3 times less than the world rate
Poverty is a characteristic of the economic status of an individual or a social group, which helps them satisfy a certain range of basic needs essential for life, employability, and reproduction.
It is a relative and multivalued concept and depends on the general living standard in a given society. When assessing the poverty level, Kyrgyzstan follows the methodology approved by order of the Kyrgyz government on March 2011. According to it, the cost of the general poverty line in 2020 in the republic was 35,368 som per year per capita (or 1.14 dollars a day), of extreme poverty – 19,774 som (0.63 dollars per day).
As we see, the poverty rate and extreme poverty rate in the Kyrgyz Republic are below worldwide rates.
Every fourth Kyrgyzstani is poor
In 2020, 1 million 678 thousand people in Kyrgyzstan lived below the poverty line, including 73.7 per cent of rural residents. However, rural residents seem to be more protected because they have household plots.
Nurgul Akimova, the expert in economy, explained this situation by the fact that in urban areas there are more opportunities for mediation and competition.
“Densely populated locations provide more job opportunities. As a result, the quality and cost of works are more expensive because of the competition,” Akimova said.
The highest poverty rate is found in Dzhalal-Abad region (28 per cent), and the lowest rate is in Talas region (only 2 per cent).
Over 58 per cent of total number of the poor resided in Dzhalal-Abad, Osh and Chui regions.
The poverty rate has been on the rise, including in Dzhalal-Abad region – by 10.3 per cent, Naryn region – by 8.7 per cent, Chui region – by 6.3 per cent, Osh region – by 4.8 per cent, Issyk-Kul region – by 3.5 per cent, Batken region – by 2.1 per cent, and in the city of Bishkek – by 4.9 per cent.
Despite the general trend, some regions of the country experienced reduced poverty rates. For example, in the city of Osh the poverty rate decreased by 6 per cent, in Talas region – by 0.8 per cent.
40 thousand citizens left unemployed
The key reasons for poverty increase in the Kyrgyz Republic, according to the World Bank, were loss of jobs, nearly 40 thousand people were left without fixed income, 20 per cent of migrant workers were left without jobs, GDP decreased by 8.6 per cent, inflation (7 per cent in July this year compared to December 2020).
In 2020, 75 thousand people were recognised as unemployed, according to the National Statistical Committee. Among them, 30 per cent or 22,479 were residents of Dzhalal-Abad region. It is followed by Osh region with almost 20 thousand citizens who do not have regular income.
Extreme poverty rate increased
The extreme poverty rate in 2020 was 0.9 per cent, which shows the increase by 0.4 per cent. In terms of people it is 59.2 thousand people. The shortage of funds in people living below the poverty line was 10 billion 219.2 million som (120.54 million dollars), which is 3.2 billion (37.75 million dollars) more compared to 2019.
The available cash income per capita in the pandemic year was 5,625.4 som (66.36 dollars) per month and reduced by 1 per cent. It can be explained by falling earned income by 1.2 per cent, individual labour activity by 8.3 per cent, whereas the income from the sale of personal subsidiary plot products has increased by 18.7 per cent and social transfers by 4.4 per cent.
“The increase in the number of unemployed demands that food and non-food costs be compensated either by relatives (family, relatives, friends etc.) or by the state. Whereas many families in the country receive cash remittances from relatives working abroad, we can suggest that the money they receive they spend on consumption, not saving or business investment,” Nurgul Akimova said.
The main sources of income of people is earned income (67.4 per cent), social transfers (16.7 per cent), as well as income from sales of agricultural products produced in personal smallholdings (11.9 per cent).
In the structure of average income, the proportion of salary was 40.6 per cent, individual labour activity – 14.5 per cent. It should be noted that over 12 per cent of income fall on the labour activity beyond Kyrgyzstan.
The greatest dependence on cash remittances from migrants is observed in Batken region, with almost 30 per cent of all income of residents, followed by Osh region with 20.4 per cent.
Last year, the poverty rate began to return to its previous status because of the pandemic. Thus, it became even more pressing problem for the whole world and remaining a very important one for Kyrgyzstan.
10 years without changes
Since the 2000s, the poverty rate in Kyrgyzstan decreased by 50 percentage points and did not change since 2009. According to the World Bank’s report, in the last 10 years, the poverty rate in Kyrgyzstan did not decrease, staying at the level of 20 per cent, whereas in remote regions of the republic it reaches 40 per cent.
Not all agree with such conclusions. Thus, according to the Ministry of Health and Social Development, there are some shifts in this direction. At least, judging from the personal income – it increases, yet slowly. Why does not the World Bank see it? Officials blame it all on the poverty methodology.
“From 2017 to 2018, the poverty rate reduced by 3 per cent up to 22.4 per cent. The minimum reduction, according to the social programme, must be at least 1 per cent,” the ministry said to the media.
This version could be reliable based on the individuality of the poverty index. However, in 2019, both the National Statistical Committee and the World Bank provide similar indicators of the poverty rate, 20 per cent (WB), 20.1 per cent (statistical agency of the Kyrgyz Republic).
The state provides training to new professions in order to compensate for the poverty. Also, there is a system of social guarantees, for example, subsidised healthcare. However, these measures are not enough. The republic does not have enough jobs for all. Otherwise, why would citizens leave for neighbouring countries for a better life? Moreover, the Kyrgyz Republic is aware of the situation and takes an active part in the employment programmes of the Eurasian Economic Union for the Kyrgyzstanis abroad, such as “Work without borders”.
Title photo: Sputnik / Табылды Кадырбеков
This article was prepared as part of the Amplify, Verify, Engage: Information for Democratisation and Good Governance in Eurasia project implemented by IWPR and funded by the Norwegian Ministry of Foreign Affairs, and mentoring program of the Development of New Media and Digital Journalism in Central Asia project implemented by IWPR with the financial support of the UK Government. The content of the article does not reflect the official position of the IWPR, the Norwegian Ministry of Foreign Affairs, or the Government of the United Kingdom.