Charting a different future for social protection: Kyrgyzstan’s opportunity

DEV-IN-TRANS-BANNER

By Alexander Pick , Fiscal economist, OECD Development Centre


This blog is part of an ongoing series evaluating various facets of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


Kyrgyzstan-woman-Radiokafka Shutterstock.com
Women in Kemin, Kyrgyzstan. Photo: Radiokafka/Shutterstock.com

A voice in Svetlana Alexievich’s Secondhand time, a chronicle of post-Communist disillusion in the former Soviet Union, declares that “the future is… not where it ought to be.” This despair at what constitutes progress neatly captures something we increasingly appreciate – that development is neither a linear process nor one with a clear end goal. Few countries understand this better than the former republics of the Soviet Union, where the geopolitical and economic aftershocks of the USSR’s fall continue to be felt today.

Kyrgyzstan embraced the move to a market economy quicker than any of them. Nonetheless, gross national income per capita in 2015 was below its level in 1990, and industry’s contribution to output and employment has shrunk dramatically. Moreover, large holes have appeared in the social safety net that once covered the entire population. This might be a surprise given that Kyrgyzstan spent 10.7% of gross domestic product (GDP) — a high rate for a country at its income level — on social protection in 2015, more than on health and education combined. In 1990, however, social protection spending was equivalent to 17% of GDP.
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How middle class are middle-income households in Latin America?

By Ángel Melguizo (OECD Development Centre) and Nora Lustig (Tulane University)

On labour informality and its causes

 One of the most important achievements of the recent period of economic expansion in Latin America has been the substantial reduction of poverty and the surge of an emerging middle class. According to World Bank estimates (Ferreira et al, 2013), in 2009 the Latin American population with a daily income of between 4 and 50 dollars a day (in parity of purchasing power) represents 68% in the region today, compared with 29% who still are moderate poverty. These ‘middle sectors’ are composed of 38% belonging to a vulnerable population, which has between 4 and 10 dollars a day, and 30% middle class, between 10 and 50 dollars. Continue reading