Poverty and Economic Transition in Kazakhstan

Abstract

This paper examines the impact of the economic transition of the 1990s on living standards in Kazakhstan and suggests ways in which the social safety net can be made more effective. There are three principal conclusions. First, over a third of the population of Kazakhstan was living below a ‘subsistence minimum’ living standard in 1996. Second, given the extent of poverty, this is a problem that cannot be eliminated by public transfer programs alone. Indeed, the social safety net has shrunk substantially since independence under the combined impact of falling revenues and the need to maintain fiscal discipline. Third, the social safety net will nonetheless be critical for easing the costs of economic restructuring, and to assist those who may not be able to take advantage of changing economic opportunities. The social safety net could be made more effective through greater regularity in the payment of benefits and improved targeting of benefits to those in greatest need. An expansion of programs that assist the poor could be considered.

Keywords: poverty, Kazakhstan, 1996, safety nets

JEL Classification: I38, P29