Baku, Azerbaijan, Oct.17
By Nargiz Sadikhova - Trend:
Central Asia countries which have seen most overall economic growth have also seen the most poverty reduction, William Seitz, World Bank (WB) economist of the WB Regional office in Central Asia told Trend in an interview.
According to Seitz, each of the countries have their economic and policy strengths that have helped to drive poverty rates down.
“This may sound trivial but it is actually a crucial issue for all governments: pursuing sound policies that encourage sustainable economic growth is absolutely essential for lasting poverty reduction. Globally, it is quite rare to attain poverty reduction targets when a country does not also achieve long-term economic growth. In this, all of the Central Asian countries have had some success, but those that have seen the most overall economic growth have also seen the most poverty reduction,” Seitz said.
He further added that rising employment income in Central Asia is usually the pivotal factor that pushes a household above the poverty line. Those countries that have done the most to encourage employment (for instance, by making it easy to start and operate businesses, and ensuring that workers have the skills they need to succeed) have been most successful in poverty reduction.
“Performance in the area of social assistance is mixed in the region. These programs are vital to the people who receive them, but many poor people in Central Asia still do not. In some cases, the value of benefits provided are also not enough to lift them out of poverty,” he said.
Talking about ways to accelerate poverty reduction in Central Asia, Seitz noted that there is no “silver bullet” to eradicating poverty in Central Asia, but there are a few important policy decisions that would substantially help.
“One is to remove barriers that make it difficult to find a good job. For instance, urban areas, including both big and medium-sized cities, have much deeper labor markets and higher average wages. But for people looking to move to those places, housing is often unaffordable. This ends up excluding people from opportunity and making the region and each country less prosperous. Another example might be taxes on employees, which in some cases could be improved so as to limit any effects that discourage job creation,” he said.
According to him, there are also restrictive propiska registration rules in some countries.
“For similar reasons to my earlier point about housing, these make it hard for people to move to places where there are more jobs available, which ends up limiting economic growth and incomes,” Seitz highlighted.
He also noted that there are some groups of people who particularly struggle to find jobs.
“For instance, women and youth have much higher unemployment rates than other groups. Focusing on growing employment opportunities and supporting people who are looking for work but cannot find it would help reduce poverty. Social assistance that focuses on people who are living in poverty and helping them return to self-sufficiency is an another essential tool for policy makers,” Seitz said.
Finally, he said, all of the countries in Central Asia need to invest in the education and health of people to ensure that they can reach their maximum potential.
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