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Kyrgyz Republic: Poverty Update, 2011

Core Content Summary

This report provides an update on poverty and inequality dynamics in the Kyrgyz Republic for the period 2007–2011, highlighting the country's progress and challenges in achieving the Millennium Development Goals (MDGs), as well as its international standing in human development indicators.

Main Points

Poverty Trends

• Poverty Incidence: In 2011, 36.8% of the population lived below the absolute national poverty line, equivalent to over 2 million people. The extreme poverty rate was 4.5%, affecting more than 252,000 individuals.
• Regional Disparities: Rural areas have a higher incidence of poverty (68% of the total poor population), with the two most populous oblasts, Osh and Jalal-Abad, being the most affected.
• Urban-Rural Gap: The gap between rural and urban poverty narrowed to 10 percentage points by 2011, indicating some convergence in poverty levels.
• Poverty Dynamics: Poverty indicators stagnated between 2009 and 2011 after a period of rapid decline. The trend followed an "L" shape, with a decline followed by stagnation.
• Income Sources: Poor households rely more on social benefits and pensions, while affluent households derive a larger share of income from work and remittances.

MDG Progress

• MDG 1 (Eradicate Extreme Poverty and Hunger): The country is likely to achieve this goal, with poverty rates showing a clear downward trend.
• MDG 2 (Universal Primary Education): High primary enrollment and completion rates suggest progress, though inefficiencies in the education financing system remain a challenge.
• MDG 3 (Gender Equality and Empowerment of Women): The country has made strides in gender equality, but challenges persist in terms of wage gaps and underrepresentation of women in decision-making roles.
• MDG 4 (Child Mortality Reduction): The infant and under-five mortality rates are declining, but they remain relatively high compared to the ECA region.
• MDG 5 (Maternal Health Improvement): The maternal mortality rate is high and not expected to be reduced to meet the MDG targets.
• MDG 6 (Combat HIV/AIDS, Malaria, and Other Diseases): HIV prevalence and AIDS-related deaths have increased, and the country is unlikely to meet the MDG 6 targets.
• MDG 7 (Environmental Sustainability): Environmental sustainability is not a major policy focus, and progress on this goal is mixed.
• MDG 8 (Global Partnership for Development): The country has made progress in some areas, such as ICT development, but remains reliant on donor support for reforms.

International Comparison

• Poverty Levels: The Kyrgyz Republic is among the poorest and most vulnerable countries in the ECA region, with over 85% of the population living below the PPP $2.50 per day poverty line.
• Human Development Indicators (HDIs): The country performs relatively well in non-income dimensions of well-being, such as health and education, compared to other low-income countries.
• Social Indicators: The Kyrgyz Republic has higher literacy rates and school enrollment compared to low-income peers, but lags behind other ECA countries in some areas like maternal mortality and HIV prevalence.
• Infrastructure Access: Poor households have less access to basic utilities like water and electricity, and face more frequent service interruptions. This is especially pronounced in rural areas.

Key Information

• Economic Growth: The GDP growth rate averaged 5% annually between 2007 and 2011, with fluctuations due to external and internal shocks, including the global financial crisis and political instability.
• Macroeconomic Link to Poverty: Economic growth and poverty reduction are symmetric, but this relationship weakened in later years.
• Sector Contributions: Agriculture remains a significant employment sector, though its contribution to GDP has decreased. Mining, especially the Kumtor gold mine, plays a key role in GDP and employment.
• Labor Market: Rural areas have higher labor force participation rates, but underemployment and informal employment are common. Urban areas show more distinct differences in labor market participation between the poor and non-poor.

Conclusion

The Kyrgyz Republic has made notable progress in reducing poverty and improving education and health indicators, but faces significant challenges in achieving MDGs related to maternal health, HIV/AIDS, and environmental sustainability. Poverty is strongly regionally and demographically concentrated, with rural areas and female-headed households being particularly vulnerable. The country's economic performance is influenced by external factors and internal volatility, and further reforms and consistent policies are needed to achieve the MDGs by 2015.