Publication: Poverty and Shared Prosperity in Belarus over the Past Decade: Trends, Drivers, and Challenges
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Date
2017-06-22
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Published
2017-06-22
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Matytsin, Mikhail
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Abstract
This paper has the goal of presenting the first comprehensive update of poverty, inequality and shared prosperity trends – and key drivers of these trends – since 2003 until 2015, that is starting with the end of the most recent poverty assessment published in 2004 and that covered the period 1997-2002. In addition to discussing the past trends, the paper also aims to present some emerging challenges to continued poverty reduction and inclusive growth in the near future. Relying on data from the Household Sample Survey, the paper focuses on the dynamics of the main sources of livelihood of households – labor income, pensions as well as direct transfers and indirect subsidies – as key contributors to the evolution of overall disposable incomes of households, in order to understand what lay behind the evolution of poverty and shared prosperity of the 2003-2015 period. The paper also complements the cross-sectional, but more detailed, look at the contribution of the Belarus fiscal system to poverty and inequality provided by the Commitment to Equity analysis (Bornukova, Shymanovich and Chubrik, 2017), by providing a temporal dimension. The evolution of poverty and shared prosperity in Belarus should be viewed in the context of rapid economic growth during 2000-2008, followed by a period of slower growth, and increased volatility, ending in recession.Growth in wages and pensions were the main drivers of shared prosperity in Belarus, particularly prior to the financial crisis, with an increasing importance of social transfers in the second half of the period.The recent deterioration of the external environment has shone a light on the degree of vulnerability of low income households and raises questions about the sustainability of past shared prosperity gains.While the economy faces multiple challenges, this paper highlights two challenges to inclusive growth, the prominence of which is being accentuated by the recent recession – the impact of population ageing, and the need to provide an adequate safety net in the context of ongoing reforms, notably in the utilities sector.Meanwhile, ongoing reforms in the utilities sector will diminish the support to households in the form of subsidized utilities prices, which, absent compensatory measures, can have a notable welfare impact.
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“Matytsin, Mikhail; Cojocaru, Alexandru. 2017. Poverty and Shared Prosperity in Belarus over the Past Decade: Trends, Drivers, and Challenges. © World Bank. http://hdl.handle.net/10986/28581 License: CC BY 3.0 IGO.”
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