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Poverty Continues to Decline, but Pace of Poverty Reduction is Slowing in Central Asia

MD Staff

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Although poverty rates in Central Asia continue to decline overall, the pace of poverty reduction is slowing, according to new data released by the World Bank. High levels of poverty remain in pockets of rural and remote areas, which also suffer from lack of employment opportunities, say new Poverty Outlooks for Central Asian countries, released ahead of International Day for the Eradication of Poverty on 17 October.

“The good news is that Central Asia continues to make progress towards eliminating poverty,” says Lilia Burunciuc, World Bank Country Director for Central Asia “However, poverty reduction is happening much less quickly than before. Rekindling inclusive growth should therefore be among the region’s most urgent priorities.”

Since the 2000s, all Central Asian countries have made significant progress in reducing poverty, but most of this progress occurred in the first few years of that decade. In the eight years from 2002 to 2009, the poverty rate dropped an average of seven percentage points per year in both Tajikistan and the Kyrgyz Republic – down from nearly 70 percent to 25 percent in Tajikistan and to 20 percent in the Kyrgyz Republic. Since then, however, poverty rates have fallen much more slowly: by only one percentage point per year on average in Tajikistan (from 25 percent to a projected 13 percent in 2019), and by nearly zero in the Kyrgyz Republic, stalling at about 20 percent from 2009 through to today.

Poverty in Kazakhstan was already lower in the early 2000s and declined at a rate of four percentage points per year from 2002 to 2009, at which point the country had almost eliminated poverty, as measured by the low-middle-income indicator of $3.20 per day. However, when measured by the upper-middle-income indicator of $5.50 per day, the poverty rate in Kazakhstan reached its lowest point in 2013, at about 6 percent, and since then has remained stuck above 7 percent.

The slowing rate of poverty reduction in Central Asian countries reflects several economic challenges, as well as difficulties securing jobs with decent incomes for vulnerable groups of the population.

Youth and women in the region are most likely to struggle with unemployment or low incomes. In Uzbekistan, World Bank data shows that over 25 percent of women aged 15-24 were unemployed in 2018, compared to 13 percent of men in the same age group. In the Kyrgyz Republic, 15 percent of women aged 15-28 were unemployed at that time, compared to only 9 percent of men in the same age group.

Recently published poverty maps for Central Asian countries reveal that many of the remaining poverty hotspots in the region are in rural areas that lack close integration with urban growth centers. This is especially pertinent for parts of Tajikistan and the Kyrgyz Republic, where poverty rates are above 40 percent in the most remote districts.

The analysis also finds that the middle-class in Central Asia is almost entirely concentrated in and around a handful of big cities: Nur-Sultan, Almaty, Tashkent, and to a lesser extent, in Dushanbe and Bishkek. One of the main challenges faced by all countries in the region is ensuring that people are not excluded from these dynamic labor markets.

The World Bank recommends policies that provide greater employment opportunities for people, expanding the availability of affordable housing in growing and prosperous cities, encouraging faster wage growth, and supporting vulnerable groups so they can be more competitive in the labor market.

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Central Asia

Kazakh President Tokaev introduces reforms

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Authors: Srimal Fernando and Kirtan Bhana* 

Political transformation will make Kazakhstan a success story. Political reforms will ignite progress in economic reforms this, according to President Tokaev  as he met with the National Council of Public Trust in Nur-Sultan (formerly Astana), the Kazakh capital on December 20.

The Council, created by President Tokaev .   in July is entrusted with facilitating the reforms through interactions and discussions with the general public, political parties, civil society and business. Composed of 44 public figures the Council is representative of the broader Kazakh demographic.

‘Different Opinions, One Nation’ said the President as he introduced new measures that guarantee the fundamental rights and freedoms to all its citizens. These measures will deepen the public discourse allowing for debate and open engagement on issues that affect all Kazakhs.

The emotive issue of land and its effective use was top on the list of challenges to be tackled by the Tokaev  Presidency.  Apart from the unbreakable link to ancestry and heritage the economic value of the land is priceless. Kazakhstan is listed as the 9th largest country in the world with a relatively small population of around 19 million people. On this issue, my position is adamant: only those who are able to cultivate the land deserve to be its owner stated Tokaev. The Ministry of Agriculture is implementing a pilot project to monitor unused land through remote earth sensing, and to increase the base tax rate for those who own but do not use their land from 10 to 20 times.

Growing the private sector and reducing the economic involvement of state businesses in competitive markets and adjusting the quota of foreign labour by 40% were also proposed.  

On Foreign debt President Tokaev  instructed The Ministries of the National Economy, Finance and the National Bank to develop a Unified Register of External Debt in the form of a digitised database by April 2020.

Stabilising the Tenge (the currency in Kazakhstan) to increase public and investor confidence, a new monetary policy strategy will be adopted. The National Bank will, from 1 January, announce the exchange rate of the National Fund’s currency market on a monthly basis.

Modernizing the pension system, jobs for disabled people, state allowances and social packages for low-income households will be increased by over 70%.  In addition school going children from these families will receive free school meals, uniforms and kits, as well as free transportation to and from school. These were among other social services measures presented to the council.

Political reforms were central to the President’s remarks. A draft law on political rallies will outline the correct registration procedures of political rallies and will determine the status of the organiser(s), participants, observers and their respective rights and obligations. A minimum membership threshold needed to register a political party will be reduced from 40,000 to 20,000 members. Women and Youth candidates must make up 30% of party election lists. A law will be passed to allow representatives from other parties to hold Chair positions on some Parliamentary committees, in order to foster alternative views and opinions.

The Ministry of Foreign Affairs is tasked to begin the process of acceding to the Second Optional Protocol to the International Covenant on Civil and Political Rights, which deals with abolishing the death penalty. Article 130 of the Criminal Code on defamation will be decriminalised and transferred to the Administrative Code.

Key Domestic reforms include the transition of the Kazakh language from a Cyrillic to a Latin alphabet will necessitate a modernising of the language system and require a scientific approach.

“Much depends on simple values that are cherished by our people, in the family, in everyday life. Frankly speaking, today people are tired of the world full of aggression and conflict. Therefore, we must spread good intentions and good actions. We should be kind, benevolent and principled – this is the driving force of sustainable development and spiritual revival,” said President Tokaev as he concluded his speech.

*Kirtan Bhana in the Founding Editor and Travel Envoy for the Diplomatic Society of South Africa.

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Central Asia

Kazakhstan: Celebrating 28 Years of Independence

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Pictured cutting the celebratory cake are (l-r) Mr Kanat Tumysh, Ambassador of Kazakhstan, Mr Joseph Gerard B. Angeles, Ambassador of Philippines and Dean of the Asian Group, Mr Bene M’Poko, Ambassador of the DRC and Dean of the Diplomatic Corps and Dr Monde Tom, Director-General of the Department of Trade and Investment of South Africa

Authors: Srimal Fernando and Kirtan Bhana

In Kazakhstan, like in many other nations around the globe, Independence Day is commemorated by conferring awards, national orders and medals on those that have made exemplary contributions to statehood. On December 16, 1991 the Constitutional Independence Law of the Republic of Kazakhstan was passed making Kazakhstan the last of the Soviets to leave the Union and declare sovereignty.

Many other milestones followed this historic date for the Kazakh people, including membership of the United Nations (UN), the International Monetary Fund (IMF) in 1992 and the International Atomic Energy Agency (IAEA) in 1994. This year also marks the tenth anniversary of the closing of the world’s second largest Nuclear Test Site at Semipalatinsk by the historic decree of Nursultan Nazarbayev, First President of Kazakhstan, which paved the way for the adoption in 1996 of the Comprehensive Test Ban Treaty – CTBT. The country was declared a nuclear weapon free country.

Located strategically in the heart of Central Asia, Kazakhstan shares a 6800km border with Russia and a1700km border with China. Kyrgyzstan, Uzbekistan, and Turkmenistan are the other three regional neighbours. Kazakhstan is considered a landlocked country but adjoins a large part of the Caspian Sea in the west.

The Kazakh people elected a Presidential system of government with two chambers of parliament. There are 14 political parties; Nur-Otan is the current ruling party. The lower house is the Mazhilis, with 107 seats and the upper house is the Senate which has 47 members. Women representation in national and local government is steadily increasing.

Having diplomatic relations with over 120 countries, Kazakhstan has a clear multi-vector international relations policy and has achieved much on the global stage in almost three decades of independence. Being elected as a non-permanent member of the United Nations Security Council (UNSC), Kazakhstan was further crowned by being elected as president of the UNSC for 2018. Its stance on non-proliferation of nuclear weapons is well known and so is its support for the transformation of the UNSC. Kazakhstan also presented a proposal for ending terrorism in the world by 2025 during its presidency.

Kazakhstan has become a fully integrated member of the international community joining many multilateral organizations, and bilateral treaties and agreements. Turkey was the first country to present letter of credence for the Extraordinary and Plenipotentiary Ambassador to Kazakhstan.

The radical transformation of the economic to a free market has seen large foreign direct invest flows into the country, growing the economy to become the most significant in the Central Asian region. New president KassymJomart Tokayev has introduced a raft of new measures that are directly aimed at stimulating enterprise, entrepreneurship and small business development. Other reforms introduced are motivation for Kazakhstan to become one of the top 30 economic nations.

Islam was introduced to Kazakhstan in the 7th century. Its ancient history is steeped in nomadic life of hunters and animal rearing. The philosophy of Al-Farabi and the poetry of Abai is legendary and filled with folklore. The dombra, a string instrument, is at the very essence of Kazakh culture and resonates with the music of love and heartache.

Modern and contemporary art forms, classical music and ballet have also found place in Kazakh society as the younger generations narrate poetry in restaurants. This together with the Kazakh’s nomadic heritage, Islamic traditions and modern art and culture has become an attraction for tourists looking for new and dynamic destinations to experience and explore. Its breath-taking landscapes and abundant natural beauty and the snow-capped mountains offers much to the intrepid traveller as it emerges as a unified nation with much potential, opportunities and prospects.

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Central Asia

Eurasian Economic Union Might Expand

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As the strained Russia-EU relations somewhat softened recently, and a rising cooperation is being seen over questions such as Ukraine and Moldova, Russia is on the economic offensive throughout the former Soviet space.

Valentina Matviyenko, a high ranking Russian official, announced recently that Uzbekistan had already decided to join the Russia-led Eurasian Economic Union (EEU) and that final preparations are taking place in that regard.

Uzbekistan is arguably the most important country in Central Asia as it is the only state bordering all four “stans” (Kazakhstan, Tajikistan, Kyrgyzstan, and Turkmenistan) of the region. From a purely geographic perspective, influence over Uzbekistan would increase Russian clout throughout the entire Central Asia.

Uzbekistan’s importance is also maximized by the fact that it possesses a pretty competitive industrial sector capable of producing various machinery and other vital products.

Uzbekistan’s membership of the EEU will also be a win for Moscow because of the latter’s quiet competition with the Chinese over the region, specifically in the economic and slightly military realms. As China rolls out its flagship Belt and Road Initiative, Uzbekistan is of primary importance to Beijing.

True, membership of the EEU will not mean cutting off trade between Uzbekistan and China, and the latter will certainly continue investing in the Uzbek economy. However, though no open animosity exists between Beijing and Moscow on Central Asia issues, Tashkent’s choice to become a member of the EEU will serve as a certain limit to rising Chinese ambitions.

On the other crucial front of Russia’s borderlands, Moscow is seemingly close to reaching a higher level of integration with Belarus (a country already an EEU member) by 2022. Though Minsk has officially refuted Russian plans on economic integration, it is clear that pressure from Moscow is indeed mounting and it is becoming increasingly difficult for Belarus to withstand various Russian moves.

Both events, which, at least according to the open source material, are likely to take place in the near future, will strengthen Russia’s position in Eurasia. It will also increase the EEU’s position and make the bloc economically more attractive for non-member former Soviet states such as Azerbaijan and potentially for Middle East powers (Iran and Turkey).

Though the expansion is a good indicator of Russia’s fortunes, in the long run it shows the limit of the EEU and Moscow’s strength. Still without Ukraine, the EEU is a constrained market, solely dominated by Russia, both economically, militarily and in terms of population numbers. In fact, as I have written in several articles for GT, nowadays the expansion of Russian economic (i.e. geopolitical) interests in Belarus and Uzbekistan is logical, as avenues for Moscow’s active foreign policy are limited to Central Asia and Belarus. Elsewhere (Ukraine, Moldova and Georgia), the Russian influence reached a certain limit, going beyond which would see Moscow needing to increase its military pressure in those countries.

Thus, Economic competition around Georgia and in wider Eurasia is intensifying, with large states increase their efforts to get smaller ones into their respective economic zones. All this is likely to build up geopolitical tensions in the super-continent.

Author’s note: first published in Georgia Today

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