Is poverty an issue in the ECIS region?

1. PEI in Europe and CISVladimir Mikhalev,UNDP Bratislava Regional CenterEnvironment and Energy CoP SessionBratislava, 16 October 2008

2. Is poverty an issue in the ECIS region? Per-capita GDP in purchasing-power-parity terms (2005) Source: UNDP Human Development Report 2007-2008

3. Poverty reduction outcomes • The revival of economic growth led to decline in poverty • in 1998-2003 from 20 % to 12 % of the population; 40 million moved out of poverty; poverty did not decreased in Georgia, Poland & Lithuania • Inequality declined with the exception of Georgia, Tajikistan, Macedonia, Serbia • Current economic instability simulations even a 5 percent relative increase in food prices (according WB) can increase poverty rates by 2-3 percentage points in some of the Central Asian countries • Mixed progress on non-income poverty: • improvements in education, but in Western Balkans, Tajikistan, Kyrgyzstan and Moldova enrolment rates declined; • HIV and TB spread in many countries, high infant mortality and increased maternal mortality in Central Asia and Caucasus, • poor access to safe water in lower income countries • Growth failed to generate enough jobs • Growth in low income counties did not increase productivity in agriculture and small trade; incomes of large sections of workforce employed there did not increased • Regional inequalities increased – gap between capital cities and rural areas & small towns

4. Environment-poverty nexus in ECIS Links between economic growth, ecosystem services, and resource management: • Economic recovery is resource-based challenging sustainability of ecosystems, especially rapid growth in the exports of : • fossil fuels from Azerbaijan, Kazakhstan, Russia, and Turkmenistan • metals from Albania, Kyrgyzstan, Ukraine, and Tajikistan • agricultural products from Moldova, Ukraine, and Uzbekistan • Progress in poverty reduction is now challenged by rapid growth in global food and energy prices • (e.g., Albania, Macedonia, Kyrgyzstan, and Tajikistan that are net energy and food importers) • Poverty is concentrated in rural areas and aggravated by water and land degradation, especially Central Asia HDR • The poor (particularly women and children) suffer disproportionately from unclean water, lack of sanitation, indoor air pollution, and exposure to toxic chemicals

5. Entry points for PEI • PRSP / NDS • PRSP is a national policy framework comprising key development objectives and policy tools aimed at poverty reduction • PRSPs operationalise long-term objectives such as MDGs by specifying concrete public policies and expenditure priorities • Serve as a framework for all external assistance geared towards poverty reduction • Sub/national – regional local development strategies and plans • Sector strategies

6. PRSPs / PRSs in ECIS region • PRSP countries that rely heavily on IFI financing: • Tajikistan, Kyrgyzstan, Armenia, Azerbaijan, Moldova, Albania, Serbia & Montenegro, Bosnia-Herzegovina • Welfare Improvement Strategy – analogue of PRSP but not linked to IFI funding: • Uzbekistan • Poverty reduction as sector programmes • Belarus,Ukraine, Kazakhstan (completed) • Other type of national development strategies or plans: • Georgia, Russia, Macedonia, Croatia, Turkmenistan • New EU member states and EU accessions countries incorporate poverty reduction policy in EU social inclusion agenda

7. Prominence of Environment in PRSPs • PRSPs in Central Asia prioritise sustainable land and water management but focus heavily on public investment projects–particularly for irrigation and flood control • Uzbekistan: 2007-2011 Welfare Improvement Strategy calls for gradual transition from growing cotton towards other crops, 18 percent of the public investment budget directed to rehabilitating irrigation systems and more efficient water usage, (e.g. introducing meters) • Kyrgyzstan’s 2006-2010 Country Development Strategy: more efficient water use via modernization of irrigation system and expansion of water user associations • Tajikistan’s second Poverty Reduction Strategy Paper (for 2007-2009): renovation of irrigation and drainage systems to reclaim degraded areas • Lacking much-needed changes in policy environments and legal frameworks • Lack of skilled specialists in land and water management in the state, private, and third sectors • Need for SEA of all components of PRSP, not only water and environmental sections

8. Tajikistan: Financial Estimations for MDG 7 (environment), 2005-2015 (US$ million)Source: Tajikistan MDG Needs Assessment, 2005

9. World Bank assessment of PRSPsafter 7 years of implementation • No PRSP received a score of "A" and 5 PRSPs received a score of "B“ • 67% of PRSPs need greater elaboration of underlying strategies • 72% are weak for costing and financing scenarios • 85% weak for greater specificity, prioritization and sequencing of time-bound actions • PRS does not provide guidance to achieve the MDGs

10. Lessons learned from PRSPs • PRS goals and targets must be SMART: • Specific, Measurable, Affordable, Realistic and Time-bound • Higher level of ownership of PRS with budgetary commitments required for integration of activities of sector ministries • PRSPs plan increased resource flow to MDG sectors: job creation, micro financing, education, health, environment but not sufficient for MDG achievement • SEA should be embedded in PRSP process – role for PEI

11. Synergies with MDG Support • UN MDG Support (MDG-S) initiative aims to assist countries in preparing and implementing national, area-based and sector strategies to achieve the MDGs • Kyrgyzstan, Uzbekistan and Tajikistan are target countries in the ECIS region • Under MDG-S framework, UNDP Bratislava Centre supports UNCTs in dialogue with governments on policy formulation, strategic planning and budgeting and offers technical support for MDG-related sectors • The BRC MDG-S project (2008-2009) policy support covers innovative development, competitiveness, social inclusion, decentralization • BRC project funds offered to 11 countries for policy support in 5 thematic windows: • Support to national development strategy processes; • Regional development; • Social inclusion, social policy and social sector reform; • Trade policy; • Strategic environmental assessments and policies for environmental sustainability

12. MDG Support to area-based initiatives • Support to strategic planning at sub national level offers opportunity to mainstream environment in regional and local development • Outcomes / benefits of regional strategic planning • Sustainable development- set of balances betweeneconomic, social, environmentalaspects and between local, regional, national goals • Better use of the own resources - prioritising of activities and expenditures, information for the budget elaboration • Improving the mobilization of external resources / foreign investments • Changing the role in development of the local or the regional authorities - undertaking leadership role, coordination of the local actors activities • Democratisation of governance - increasing the responsibility, transparency, commitment and participation

13. MDG Support to national sector programmes • Potential MDG sectors supported (1 or 2 per country) • Agriculture/ Food Security • Education • Health • Infrastructure: Roads, Energy Trade and Transport • Environment, Water Resources • Gender Equality and Women’s Empowerment • Areas of sector support • Needs assessment • Sector-specific policies and programs • Strategic planning and resource mobilization • Institutional and human capacities