2011年-世界发展银行全球_Georgia_-_Poverty_dynamics_2003-2010_34页_870kb

Summary of Report No. 63110-GE: Poverty Dynamics in Georgia, 2003 - 2010

Core Content

This report provides an analysis of poverty dynamics in Georgia from 2003 to 2010, focusing on the impact of economic growth and major shocks on poverty incidence. It highlights the disparity between urban and rural areas and the limited pro-poor effects of economic growth. The report uses an empirical methodology to establish comparability between different household survey data sources and estimates poverty levels during periods of growth and economic downturn.

Main Findings

• Economic Growth and Poverty Reduction: From 2003 to 2007, Georgia experienced robust economic growth, with an average annual GDP growth rate exceeding 9%. During this period, real household consumption per adult equivalent increased by about 14%. Poverty incidence decreased from 28.5% in 2003 to 23.4% in 2007, and further to 22.7% in 2008. However, this reduction was not proportionate to the overall economic growth.

• Urban-Rural Disparity: The gap between urban and rural poverty incidence widened significantly since the Rose Revolution. In 2003, rural poverty was much higher than urban poverty, and this disparity has continued to grow. By 2009, 64% of Georgia's poor lived in rural areas, despite rural populations accounting for less than half of the total population.

• Impact of the Crises: The 2008 conflict with Russia and the global recession caused a sharp economic downturn. Georgia's economy contracted by 3.8% in 2009, and poverty incidence increased from 22.7% in 2008 to 24.7% in 2009. The crises more than offset the gains made during the previous growth period, particularly in rural areas, where poverty increased by nearly 3%, compared to about 1% in urban areas.

• Job Creation and Wages: Economic growth in Georgia was not accompanied by sufficient job creation, which may explain the lack of significant poverty reduction. While real wages increased substantially (over four-fold from 2000-2009), this growth was concentrated in a few sectors, and not evenly distributed across the population. The targeted social assistance (TSA) program launched in 2006 played a key role in improving living conditions, especially for the very poor.

• Growth Elasticity of Poverty: Georgia had one of the lowest growth elasticities of poverty in the world. During the growth period (2003-2007), a 1% increase in per capita consumption was associated with only a 1.3% decrease in overall poverty and a 2.1% decrease in extreme poverty. During the economic downturn (2008-2009), the growth elasticity of poverty increased significantly to 2.5 and 5.4, respectively, indicating that the poor were disproportionately affected by the economic decline.

• Poverty Trends by Quintile: The gains in living standards were concentrated among the top wealth quintiles. The top 20% of the population saw a consumption increase of over 26%, while the bottom 20% only saw a 10% increase, most of which occurred in 2007-2008 due to the TSA program.

Key Information

• Data Sources: The report uses non-comparable household survey data from the 2000s, including the 2003 Integrated Household Survey (IHS), 2007 Living Standards Measurement Survey (LSMS), and 2008-2009 IHS. These data are adjusted using a small area estimation methodology to ensure comparability across time and sources.

• Poverty Line: The poverty line used in the analysis is based on 2007 LSMS data and is set at 71.6 GEL per adult equivalent per month (2007 prices). For extreme poverty, the line is set at 47.1 GEL per adult equivalent per month.

• Methodology: The report employs a method developed by Elbers, Lanjouw, and Lanjouw (2003) to adjust and compare data from different surveys, enabling the estimation of comparable poverty rates over time.

• Economic Recovery: Economic recovery in Georgia began in 2010, with real GDP growth estimated at 6.6% for the first half of the year. The recovery was driven by increased demand for exports and tourism. Growth is projected at 4-5% for 2011-2013, with exports expected to play a key role.

• Policy Implications: While the TSA program contributed to poverty reduction, Georgia needs to implement more proactive policies to ensure that the poor and rural population are better integrated into the growth process. The report emphasizes the importance of understanding how policy changes and economic growth affect poverty and inequality to ensure more equitable distribution of benefits.

Conclusion

The report concludes that Georgia's economic growth from 2004-2007 did not translate into proportionate poverty reduction. The impact of the 2008-2009 crises was severe, reversing the gains made and increasing poverty incidence. The urban-rural divide has widened, and the poor have not benefited significantly from economic growth. To ensure more equitable outcomes, Georgia must focus on policies that promote inclusive growth and strengthen social safety nets.