1 / 15

Economic Growth, Government Pro-Poor Policies and Poverty Reduction in Armenia

Economic Growth, Government Pro-Poor Policies and Poverty Reduction in Armenia. Poverty and Extreme Poverty Rates in Armenia. Distribution of Income. Explanations for gap between poverty rates and public perception.

balin
Download Presentation

Economic Growth, Government Pro-Poor Policies and Poverty Reduction in Armenia

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Economic Growth, Government Pro-Poor Policies and Poverty Reduction in Armenia

  2. Poverty and Extreme Poverty Rates in Armenia

  3. Distribution of Income

  4. Explanations for gap between poverty rates and public perception 1) Certain segments of the population aren’t benefiting from positive economic results 2) There are regional disparities: • Lowest poverty rates: Yerevan, Vayots Dzor • Poorest: Shirak, Aragatsotn, Gegharkunik, Kotayk and Armavir 3) Official poverty line underestimates the true amount of poverty.

  5. Poverty and Extreme poverty lines in 2004 • Extreme poverty line: AMD12,467 or $28 per month • Poverty line: AMD 19,373 or $43/month

  6. STEPS TO CALCULATE THE EXTREME POVERTY LINE 1) Estimate per person per day calories needed: 2,232 2) Estimate the amount of money required to purchase 2,232 calories per day for one month: AMD 12,467 or $28.

  7. STEPS TO CALCULATE THE POVERTY LINE 1) Estimate the amount of money required to purchase food: AMD 12,467 or $28 2) Estimate the non-food share of the budget of a person earning an income equal to the poverty line. This number is 36%. 3) Based on these estimated numbers, calculate the total budget or the poverty line: AMD 19,373 or $43 --The non-food part of this budget is just AMD 6,906 or $15 per month.

  8. Pro-poor Government economic policies 1) Build public infrastructure in agriculture: roads and water resources 2) Improve education, health care & housing 3) Provide easy access to credit by the poor 4) Improve pensions and safety nets for the poor 5) Reduce of corruption 6) Redistribute assets

  9. Government Expenditures • From 2000 to 2004 Government expenditures/GDP declined from 26.7% to 20.4% • In 2003 Government social expenditures, (pension, social assistance, health and education) were low: 8.7% of the GDP. Poverty Reduction Strategy Paper expects that number to be 12% of the GDP in 2015

  10. Feasible ways of increasing government expenditures on pro-poor economic policies • 1) Increasing government budget deficits • 2) Increasing tax revenues

  11. 1) Government budget deficits • During 2003, 04, 05, budget deficits/GDP were 1.4%, 1.5% and 2.5% • For 2010, 2015, and 2020 the deficits/GDP are estimated to be, 1.9%, 1.6% and 3.3%

  12. Government Debt • In 2005 government debt/GDP was 31%. • For years 2010, 2015, and 2020 the government debt/GDP are estimated to be, 29.1%, 29,8% and 37.9%.

  13. 2) Tax revenues and rates • In 2004 government tax revenue/GDP was 17.4%. • After year 2000, annual taxable income of less than about $2,500 is taxed at 10% and above that amount is taxed at 20%. • After year 2000, income tax collection fell by 28%.

  14. Armenia: Poverty measures by age Groups, 1998/99 and 2004 (in %)

  15. The effect of elimination of pension system on poverty rates • If in 2004 pensions were eliminated: • Poverty rate would have jumped from 34.6% to 42.7%. • Extreme poverty rate would have jumped from 6.4% to 12.3% Source: National Statistical Service of RA, 2006

More Related