Europe and Central Asia

Europe and Central Asia

Poverty rose markedly in the 1990s, with chronic poverty an emerging concern. Even in countries with robust growth there is a growing group of the chronically poor. Recent poverty assessments by the World Bank highlight striking levels of poverty among the Roma. In Bulgaria in 1997 more than 84 percent of the Roma lived below the poverty line, more than double the national poverty rate of 36 percent. In Hungary a third of the long-term poor were Roma, though they made up only 5 percent of the population.

In Russia the breakup of central planning was accompanied by a steep fall in output and a sharp increase in inflation. Poverty as measured by the national definition jumped from an estimated 11 percent in the Soviet period to 43% by 1996, and probably increased further with the 1998 crisis. Inequality widened dramatically during the transition, with the Gini coefficient of consumption expenditure doubling an estimated 0.24 in 1988 to about 0.49 in 1998. Rising disparities in poverty have also surfaced, exacerbated by a inefficient system of fiscal decentralization, which left the more backward regions short of resources to assist the poor.

Moldova, one of the countries hardest-hit by the 1998 crisis and today one of the poorest in Europe, experienced a dramatic worsening of poverty. The percentage of people living below the national poverty line increased from 35 percent in May 1997 to 46 percent in the fourth quarter of 1998. Inequality also increased sharply in the last decade: the Gini coefficient jumped from 0.24 in 1987/88 to about 0.40 in 1997.


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