Reducing poverty and MDG: some aspects for Moldova

1. Reducing poverty and MDG:some aspects for Moldova Dr Arcadie Barbarosie Institute for Public Policy, Chisinau, Moldova http://www.ipp.md

2. Outline • Poverty in Moldova • HIV/AIDS, Malaria and Other Diseases • Strategy for poverty reduction

3. Goal 1: Eradicate Extreme Poverty and Hunger

4. Poverty in Moldova • Poverty in the Republic of Moldova is evaluated annually based on Household Budgets Survey (HBS) data. • Proportion of population below $1PPP per day is not calculated in the national statistic • The extreme poverty line = to ensure food consumption, for the necessary minimum of calories per day, equal to 2282 Kcal per person, based on the consumption pattern of the “impoverished” (the 2-4 deciles of the total distribution of per capita consumption) • The absolute poverty line is based on total consumption expenditures, where the non-food component = difference between total consumption expenditures and food consumption, based on the structure of consumption of the impoverished (2-4 deciles). • The absolute poverty line for 2002 has been estimated at 270,67 MDL, and the extreme poverty line – at 212 MDL. • The relative poverty line = 50% of average consumption of household per equivalent adult, 210 MDL (203 MDL after CPI adjustment). • For info: 1USD=13.5MDL (exchange rate)

5. Poverty incidence in Moldova

6. Subjective level of life Prof. Falknigham data

7. Chare of quintiles in total incomes, HBS

8. Who are the poors • Children: 34,5% of children below 5 years of age live in extreme poverty, being concentrated in rural areas (40,8%) • Economically active persons: employees and unemployed. Combined, this category weights 43,4% from the total number of those extremely poor, proving that being economically active does not mean being immune to the high risk of poverty. • Economically inactive persons: age pensioners. This category ponders 1/4 from the total number of those extremely poor. In very many cases, the members of households leaded by pensioners in urban areas are part of the extremely poor category • Geographic distribution of poverty. Although the majority of poor people live in most populated localities – the central area of the republic, the highest risk of poverty is known by residents from south regions (where the poverty ratio is by 23% higher that the country average). • Poverty in Moldova is largely proliferating in the rural environment: every third resident from rural environment has been extremely poor in 2002 • Urban poverty in Moldova is also significantly diverse, being by four times lower in the main cities (Chisinau and Balti) if compared to small towns..

9. Poverty characteristics in Moldova • the monetary incomes have a very low share in the structure of incomes, especially in rural areas • in the structure of consumption the consumption for food has a very high level • the high level of inequality in distribution • high level of subsistence agriculture activities • predominance of the agricultural sector in the economy, vulnerability towards climate conditions • risks for food security • no famine, but low structure of food • high level of informal economy (50-80% of official GDP) • high level of illegal labour migration • high level of flows of money from emigrants (app., 75% of annual budget in 2002, est. one budget in 2003)

10. Goal 6: Combat HIV/AIDS, Malaria and Other Diseases

11. New Cases of HIV Infection (per 100,000 population)

12. Goal 6: Combat HIV/AIDS, Malaria and Other Diseases

13. New Cases of Active TB (per 100,000 population)

14. TB-Caused Mortality (deaths per 100,000 population)

15. Strategy for poverty reduction • SEGPR under development • It seems to be too general, not targeting the poors • One of the versions contains the next goals • Finalization of the transition to the market economy • Insurance of a sustainable development • Realization of the Millennium Development Goals • Territorial reintegration • European integration • Consolidation of the statehood

16. Strategy for poverty reduction • And objectives • insurance of high GDP growth tempo (moderate scenario – not less than 5%; optimistic scenario – of 8-10%), maintenance of macroeconomic stability; • reform of the public administration system, eradication of corruption and shadow economy; • development of the private sector, modernization of the economy and increase of goods and services competitiveness; • reduction of the number of poor people, especially those that are part of vulnerable social layers, located in areas most affected by poverty; • recovery and development of the infrastructure and housing sector (improvement and extension of water, heat, electricity and gas supply networks, repairing and building of roads, development of telecommunications, building of houses, especially social ones, etc.); • reduction of the death rate (the number and gravity of illnesses); • increasing the number of children attending school and improvement of the quality of education.

17. Strategy for poverty reduction • Good, but declarative, too general…

18. Recomandations • Improving the statistical system (new indicators, harmonisation with international standards, data collection) • Governmental Programmes harmonised and “measurabilised” • PR Strategy made concrete, with measurable objectives, benchmarks, targeting the poor population, with action plans, etc. • Define country’s MDG objectives, in a large participative process • PRS objectives coordinated with MDG objectives