Fergus, Michael. "A strategy for reducing poverty in Kazakhstan". Asian Affairs, Vol.34, No.2 (2003): 109-122.

Fergus, Michael. "A strategy for reducing poverty in Kazakhstan". Asian Affairs, Vol.34, No.2 (2003): 109-122.

• Although Kazakhstan is not exceptionally poor and has an average annual income of $1,340, placing it in the bracket of low middle income countries, this wealth is not equally distributed and over 30% of the population, approximately 5 million Kazakhstanis, lives on less than 150 tenge a day, the $1 per day equivalent (109).
• Contemporary Kazakhstan was extremely dependent on its mineral wealth, with oil and gas exports accounting for half of total GDP, and mineral extraction accounting for another quarter (109).
• This dominance of extractive industries has exacerbated economic inequality. Kazakhstan is suffering from 'Dutch Disease', where oil and gas wealth buoys the economy without decreasing poverty, as reflected by the high poverty rates in Atyrau and Mangistau, the same provinces with the highest gas production (113).
• Kazakhstan was massive tracks of arable land, largely unused or inefficiently utilized, due to lack of population to properly exploit it. Since independence the Kazakhstani population has declined by around 2 million, mainly European peoples in industrial jobs leaving due the post-independence crash. There is a return flow of ethnic Kazakhs from other post-Soviet republics, but it has not made up for the exodus, and the immigrants are pastoralists without technical skills (111).
• The World Bank, in conjunction with the state Statistics Bureau of Kazakhstan, conducted a survey in 1996 comparing the income of thousands of families to a 'food basket' calculated to reflect the cost of basic foodstuffs and services needed for a reasonably comfortable standard of living. It showed that 34.5% of the population was living in poverty -- that is belong the food basket standard -- with large regional variations (111).
• In South Kazakhstan [Shymkent] 69% of families were living below the poverty line, whereas the figures was only 9% of families in Northern Kazakhstan [Petropavl]. These levels of poverty are primarily associated with large families and the unemployed, with poor health and lack of education also contributing. Interestingly, women and pensioners are not heavily represented among the poor, in contrast to patterns elsewhere (111).
• The survey also indicated that in 1989, just prior to independence, around 15% of the population of the Kazakh SSR lived below the poverty line, meaning that poverty more than doubled in the five years since independence. This was directly caused by the breakdown of the Soviet system, where central services stopped being provided and many state industries ceased to operate. In this same period, agricultural and industrial output dropped by 40%, real wages were halved, and unemployment exceeded 15% as millions lost their jobs and pensions (112).
• The political pressure resulting from the admixture of widespread poverty with massive oil wealth prompted Kazakhstan to implement a national poverty reduction plan with the help of the Asian Development Bank [ADB] and UNDP in 2000. The UNDP focused on technical assistance in the production of statistics, whereas the ADB provided microcredit loans as well as business loans for small and medium enterprise (114).
• The first strategy developed by the government, for the period from 2000 to 2002, focused on the reduction of unemployment from 13.2% to 9%, focusing on this rather than the multidimensional aspects of poverty explored later in other poverty reduction programs (114).
• These programs for the financing and development of small and medium enterprises have been very successful in reducing poverty. The development of small scale industry for consumer goods and small service industries have been great successes in stimulating private property and reducing poverty rates (118-119).
• The 2001 Poverty Assessment conducted by the National Statistics Agency measured the wealth of 12,000 households distributed across Kazakhstan on a quarterly basis, and compared this to both the 'food basket' subsistence minimum and the poverty line, the point at which a household was entitled to social assistance from the government (115).
• This assessment demonstrated continued large variations in poverty between regions, with a low of 7% in Astana to as high as 87% in rural areas of Mangistau oblast. Poverty is generally the highest in the South and West in Kazakhstan, and higher in rural areas than urban ones (115).
• Percentage of the population living underneath the subsistence minimum is also correlated to negative health outcomes, with the poorest oblast also have the highest rates of cancer, TB, and other infectious diseases. This is directly linked to a lack of shelter and malnutrition associated with poverty, leaving those populations more susceptible to infectious diseases and other health risks (116).
• The assessment has indicated that three main factors play a major role in the extent of poverty: the size of the household, the level of education, and geographic location. Within these factors, additional children have a greater effect on increasing poverty than elderly family members, who can contribute pension funds to household income. Geography is still the largest single factor, with poverty being the highest in the South and the lowest in Astana and the ethnically Russian north of Kazakhstan (116).
• Poverty has become particularly widespread in former 'company towns' or моногород, were the infrastructure that allowed for a single industry to sustain living conditions for the employed population vanished with the Soviet Union. Around 35% to 40% of the population in these towns has fled, with the remainder massively unemployed and prone to substance abuse. In contrast to other areas, the state-owned company has typically responsible for the provision of social services in these areas, meaning most are not integrated into other social support networks after the collapse (118).
• Poverty is often expressed and experienced different ways in different regions, motivating the UNDP and the Kazakhstani government to engage in two pilot projects measuring different poverty reduction outcomes between the Karaganda oblast and Jambyl oblast. Based on the factors contributing to poverty in that region, different programs were used (119).
• Karaganda oblast is massive, with huge tracks of steppe and semi-desert. Almost all of the population lives in urban areas and works in the mining sector. The majority is still of non-Kazakh descent, being moved into the region because of expertise in metallurgy. 24.4% of the population lived under the subsistence minimum, although the average family only had three members. Poverty is largely concentrated around old company towns, where social services have collapsed and unemployment is high. The number of prisons in the region has also contributed to higher rates of alcohol and drug abuse, both associated with poverty (119).
• The poverty reduction strategy here focuses on reviving large and medium industry in former factory towns, with investments being poured into extractive industries and special government departments being set up to attract investment. At the same time, the plan promotes the education of professionals for work in service industries supporting these extractive activities (120).
• Jambyl oblast is small and near the Kyrgyz border, with almost all of the province being covered by desert of semi-desert except some river valleys. 41.5% of the population lives under the subsistence minimum, with that rate higher for rural populations, but still higher than the national average in urban areas. Poverty is directly linked to household size, with 78% of the poor living in households larger than 5 persons. The main vulnerable groups are immigrants to urban areas and migrant workers from Uzbekistan and Tajikistan (120).
• The poverty reduction strategy here concentrates on improve targeted social assistance, improving social services, developing agriculture, expanding civil society, improving local governance capabilities, and providing training for new employment opportunities (120).
• "With the collapse of the economy and institutions since Independence in 1991, local governments have found it extremely difficult to assume new responsibilities for social services like health, education and pensions. In the Soviet Union these were frequently the responsibility of the managers of institutions such as the collective farms. Now they are the responsibilities of the government and unless it is in a position to shoulder these new burdens, poverty will continue to remain a very visible problem in Kazakhstan" (121).