SEATTLE — Kazakhstan is Central Asia’s most affluent and economically stable nation. Despite being geographically the ninth-largest country in the world, Kazakhstan has a population of only 17 million. The Human Development Index ranks it at 56 out of 177 countries. Although 2.7 percent of its population still lives below the poverty line, Kazakhstan achieved its Millennium Development Goals (MDG) targets by 2015. The causes of poverty in Kazakhstan are myriad.
Poverty in Kazakhstan still remains a problem and it especially affects people in rural areas and urban slums. Children make up more than one-third of those in poverty and are at higher risk than other age groups. The higher the level of education, the lower is the probability of poverty, but even education does not necessarily protect from poverty. Ten percent of people with vocational education were also classified as poor.
Owning land does not protect one from poverty either, as Kazakhstan has yet to take measures to develop its agricultural sector. Almost 7 percent of landowners were poor households compared to 2.4 percent who did not own lands. According to reports, the following are some of the causes of poverty in Kazakhstan.
- Ineffective social protection systems
Social protection systems have helped reduce poverty in Kazakhstan. The current system provides for the poor a degree of sustenance services such as social insurance benefits, social assistance benefits and social services. Pensioners are particularly taken care of well since pensions are linked to the subsistence minimum. However, the system does not provide sufficient support to poor families with children to cover costs for school education. The disability pensions are also considered low to support the affected population.
- Income inequality
Although poverty of income in Kazakhstan has decreased significantly, income inequality is still a persistent issue. From 2001 to 2010, “the share of the top income quintile in 2010 in total incomes increased by about 1 percentage point from 2009, whereas the share of the bottom income quintile fell slightly by 0.3 percentage points.”
- Regional disparities
Even though there has been a noteworthy reduction in overall poverty in Kazakhstan, regional economic disparities have not been overcome. From 2006 to 2010, poverty in Kazakhstan fell by 31 percentage points from 37.5 percent to 6.7 percent but it was not equal across regions. Despite the major fall overall, poverty risk remains relatively high in the regions of South Kazakhstan (11.5 percent) and East Kazakhstan (8.4 percent) in relation to the national poverty level.
- Decline in oil prices
Kazakhstan’s economy has, in recent years, suffered from the decline in global oil prices. Consequently, GDP growth declined from 1.2 percent in 2015 to 1 percent in 2016. According to the World Bank, private consumption decreased in 2016 “which pushed the inflation rate to an average of 14.6% for the year and undermined the purchasing power of households.” Wages declined by 0.9 percent, and the overall poverty rate measured at the international poverty line of $5 per day increased by 19.8 percent.
There is a tremendous potential for the economy to grow further and consequently, for poverty to decrease in Kazakhstan. The unexplored sector of agriculture can provide a big help to diversify Kazakhstan’s economy and increase employment opportunities. The Kazakh president Nazarbayev, in his 2017 address to the nation, named agriculture “a new driver of the economy.”
Priority actions must be taken to work on the post-2015 sustainable development goals. The good news is that the government has already made tremendous progress on addressing the causes of poverty in Kazakhstan. Now its active involvement in the post-2015 development agenda can help overcome the remaining poverty, income inequality, health, education and other areas.
– Aslam Kakar