Poverty reduction in the Kyrgyz Republic and accuracy of measuring it

Abstract

Different aspects of poverty in Kyrgyzstan are studied in the article. The article explains methodological issues of poverty estimation, gives a brief description of the current situation and changes in poverty. Data reflecting progress in alleviating poverty and extreme poverty are presented. It is shown that the increase in average income have a greater impact on poverty reduction than redistribution of resources aimed at reducing income inequality. To alleviate extreme poverty the strategy of direct support to the poorest population should be conducted. The reasons for poverty reduction are briefly analysed. The accuracy of the estimate of poverty estimation and its change is assessed. The results of clustering are presented for the national and regional levels. 1. Methodology of poverty level identification in the Kyrgyz Republic Various concepts and approaches are used to describe and understand poverty. The food-based approach is accepted in a few Asian countries where poor are considered those people whose calorie intake is lower than a certain level. In some countries of Africa the number of pigs in a household is considered to be the indicator of wellbeing. The one-dollar approach is widely accepted, according to which the criterion of poverty is food consumption below one dollar per day per person. The methodology of poverty measurement used by the National Statistical Committee of the Kyrgyz Republic is based on measuring household expenditures according to the Living Standard Measurement Surveys (LSMS) of the World Bank. In practice the choice of poverty measurement methods depends on goals. At present the main goal in Kyrgyzstan is to reduce poverty and support the poor by providing them with sufficient amount of food, goods and basic services. Poverty in Kyrgyzstan is measured by the method of absolute poverty level. Kyrgyzstan adopted this approach under the recommendation of the World Bank experts. It allows the identification of those population groups, which do not have sufficient income in cash or in kind to achieve consumption of a necessary amount of food, goods and basic services. A reasonable approach towards identification of poverty consists in identification of the main needs of the population. The main need of a human being is nutrition. Food products necessary for the achievement of the recommended minimum level of food consumption make up a part of this vitally important consumption threshold. Essential nonfoods and services should also be added. The structure of food consumption of 1/3 of the population with lowest incomes is assessed as the minimum set of food products. Further, the necessary quantity of these products is determined based