Summary of the Report “Belarus: Poverty Assessment. Can Poverty Reduction and Access to Services Be Sustained?”

In December 2004 the World Bank prepared a Report “Belarus: Poverty Assessment. Can Poverty Reduction and Access to Services Be Sustained?” The assessment of the perspective for reducing poverty in The Republic of Belarus is carried out on the basis of analysis of the situation with regard to the increase of income of the population, the accessibility of education, healthcare and social protection.

The authors of the Report state that Belarus recovered GDP growth relatively rapidly after the economic crisis of the beginning of the 1990s, reduced poverty levels significantly, maintained wide coverage of basic education and health services, and achieved this without gross exacerbation of inequality. The policy framework in place has been successful in maintaining living standards and reducing poverty better than in several transition economies.

The Report reflects that the performance-enhancing reforms in education, health and social protection, which Belarus has embarked on, are in the right direction. The aim of these reforms is to enhance the effectiveness and quality of these services.

According to the conclusions drawn by the authors of the Report the poverty reduction and inequality performance of Belarus is impressive. Belarus has embarked on a number of reforms to support these objectives, especially in the last 2-3 years and especially in terms of institutional reforms to its education, health and social protection service delivery and financing systems. It is noted that the social protection system is almost universal, covering about 4 in 5 persons. Pensions are found to be the most adequate benefit, in part because of a strong policy of indexing pensions to real wages. Child allowances are also found to provide adequate protection. Real wages more than doubled in the last 7 years.

According to the Report, Belarus can be justly proud of the elaborate system of social services it provides its population. The ability of households to access quality education, health and social protection services makes a large difference to their living standards in the present, and their prospects for the future.

The Report provides comparison of several characteristics of social development of Belarus with those of the European Union states, countries of Central and Eastern Europe and the CIS. The Report demonstrates that our country spends more on education and healthcare than the CIS countries and, on average, more than the members of The Organization for Economic Cooperation and Development. The experts of The World Bank conclude that Belarus’ poverty monitoring and analysis system has potential to be a “good practice” for the region.

Abstracts

One of the more affluent republics of the Soviet Union, Belarus recovered GDP growth relatively rapidly after the initial economic shock associated with independence, reduced poverty levels significantly, maintained wide coverage of basic education and health services, and achieved this without gross exacerbation of inequality. The policy framework in place has been successful in maintaining living standards and reducing poverty better than in several transition economies. (p.xv)

The performance-enhancing reforms in education, health and social protection, which Belarus has embarked on, are in the right direction. The aim of these reforms is to enhance the effectiveness and quality of these services. (p.iii)

The poverty reduction and inequality performance of Belarus is impressive. Belarus has already embarked on a number of reforms to support these objectives, especially in the last 2-3 years and especially in terms of institutional reforms to its education, health and social protection service delivery and financing systems, and the reduction in the generalized, untargeted utility subsidy for households. (p.ix)

In 2001, among managers of organizations or their deputies, 40.7% were females. This is a very high indicator of female representation among the top layer of management, compared to most other countries in the world. (p.9)

Belarus’ poverty monitoring and analysis system has potential to be a “good practice” for the region. (p.iii)

Belarus can be justly proud of the elaborate system of social services it provides to its population. The ability of households to access quality education, health and social protection services makes a large difference to their living standards in the present, and their prospects for the future. (p.76)

Poverty reduction.

Over the last years (1997-2002), poverty has fallen substantially in Belarus. (p.iii)  

Sustained growth, coupled with a relatively stable income distribution, succeeded in reducing absolute poverty headcount from 39.4% in 1997 to 18.5% in 2002. (p.19)   

The largest dent in poverty was archived during 1997-98, triggered by high growth rates (real GDP grew by 11% in 1997, followed by another 8% in 1998). Unlike the other countries in the region, Belarus succeeded in maintaining a small positive growth during the Russian crisis in 1999 (3% in real terms), which preserved poverty reduction gains during that difficult year. (p.11)   

In 2002 the poverty headcount ratio was 18.5%, witch is less than half of the 1997 level. The dent in other measures of poverty was even greater: extreme poverty headcount fell from 19% to 7% during the same period. (p.iii)  

Compared to other transition economies, Belarus has one of the lowest poverty rates at the lower regional line of $2.15 per capita per day. At a higher poverty line, Belarus is in the middle of regional distribution. (p.iv)    

Social protection, wages, pensions  

The social protection system is almost universal, covering about 4 in 5 persons. Pensions are found to be the most adequate benefit, in part because of a strong policy of indexing pensions to real wages. Child allowances are also found to provide adequate protection. (p.61)

The social programs are regulated by at least 100 laws, 11 ordinances and 70 decrees by the President of the Republic of Belarus, over 900 resolutions by the Government, about 50 regulatory acts by ministries, and over 60 decisions by local governments. (p.62)

More than 14% of GDP or 31% of the consolidated budget expenditure in 2004 were channeled to social assistance and insurance programs. (p.61)   

Real wages more than doubled in the last 7 years. (p.vi)  

The level of wage inequality in Belarus is not very high by FSU and CEE standards. (p.28)  

Partially the rapid growth of real wages in the second half of the 1990s "compensates" for a sharp decline in wage levels in the early transition years. Wage costs in total expenditures have also increased: in the economic sector the share of wages increased  to 14.2% in 2001. In construction, a labor intensive sector, the share of wages  in total expenditure increased from 20.8% in 1999 to 24.6% in 2001. (p. 27)

Belarus’ coverage of the population with pensions is the same as in Poland, Hungary, Romania or Bulgaria. (p.63)

Education

The education sector in Belarus in the 1990s shows relatively stable and high gross enrollment rates (GER) at the preschool and basic education levels. The preschool 2000 GER of 65.6% is higher than Russia’s and Latvia’s, Poland’s, Ukraine’s and Lithuania’s. For basic education, the 2000 GER of 95.4% implies near universal enrollment in the compulsory basic cycle and is above the 2000 rates in Russia and Ukraine. (p.35-36)

Belarus formally launched a multi-pronged reform of its education system in 1996 (completion planned for 2010). The reform impacts schooling duration by reducing the school entrance age and extending the compulsory educational cycle. The reform seeks to promote foreign language instruction in general secondary education, and increased availability of computers in schools. The reform encourages the establishment of new educational establishments at the general secondary level, known as lyceums and gymnasiums. (p.39)

In Belarus over the period of 1999-2001, the share of education expenditures relative to GDP increased from 6.4 to 6.8% with a concomitant increase in education’s share of total public expenditures from 16.9 to 19.0%. By comparison, in 1999, OECD countries spent (on average) 5.2% of GDP and 12.7% of total public expenditures on education. Belarus’ spending on education is high if compared to most of its neighboring countries as well: in 1999, public expenditures on education in Russia amounted to 3.2% of GDP, in Poland 5.1%, in Ukraine 3.7%. (p.41)

Health

Belarus shows some of the best health indicators in the region and an extensive coverage of health services, which are mostly subsidized. (p.49) 

Belarus has one of the highest numbers of doctors per population in Europe and Central Asia Region. (p.55)

Belarus’ health care resources are distributed in a way, which provides relatively god access to health care services across all socioeconomic groups. (p.57)

Total expenditures in health account for 5% of GDP, while this is below the government’s target of 7.5%, it is much more than that spent in other transition countries. In fact, Belarus spends about US$ 83per capita and ranks among the highest in the ECA region. (p.56)

Belarus’ health expenditures per capita are higher than in Ukraine ($54), or Moldova (36$). (p.57)

Overall health expenditures are progressive, in the sense that the poor benefit relatively more than the better off (23 and 18%). (p.57)

In Belarus, besides two exceptional and important problems – TB and AIDS – infectious diseases are not growing as fast as in other CIS countries due to the relatively better maintenance of the health network. (p.51)

The country has one of the lowest infant and under 5 mortality rates, lowest maternal mortality rates, and almost universal immunization rates. The decline in the IMR since 1996 reflects the introduction of multi-level perinatal care. (p.49-50)