Poverty in Kazakhstan: possible solutions and suggestions

Introduction

The modern economy of Kazakhstan is a qualitatively new stage of its development, however, this does not lessen the severity of social problems, especially important is the problem of poverty. Poverty is multidimensional phenomenon in this connection; there are many different approaches to estimating. Poverty is usually measured by income or expenses, based on the assumption that the material standard of living largely determines their well-being. The poor, in this case, are the people who have the standard of living below a certain point, the so-called poverty line. There are two main approaches to the definition of the poverty line. The absolute approach is based on the determination of the minimum physiological needs — for food, water, clothing and shelter, ie his basic needs. The relative approach, on the contrary. Defines poverty in relation to generally accepted standards of living in a particular society at a particular time, and includes not only the basic physiological needs.

The process of transition to a market economy in the country accompanied by events such as cardinal and closure of a number of public companies and as a result of this — serious scale unemployment. Lack of work places was one of the main causes of poverty in Kazakhstan. Particularly acute problem of unemployment exists in rural areas. Many socio-economic indicators that show the level of life of Kazakhstan have undergone major changes, despite the fact that the government pursued stabilization policy to mitigate the impact of the transition to the well-being of people. Significantly increased unemployment and reduced real incomes, reduced life expectancy, etc. In these circumstances, the problem of poverty in the country has become as urgent and relevant, as well as in other developing countries. On the background of significant inflation acute problem which exacerbates social situation of the poor in recent years, has become the outstanding payments of wages, pensions and social benefits.

Literature review

There is no single definition of poverty. UN refers to the poor «individuals, families and groups of persons whose resources (material, cultural and social) are so limited that do not allow them to lead an acceptable way of life» in their states. However, in socio-economic terms, this is quite a specific indicator of the state of society and the state as a whole, which can be calculated on the basis of the data series. There are statistical methods for estimating poverty. There are such things as human poverty index for developing and developed countries separately. In Kazakhstan, the poverty index is proposed to calculate on the basis of indicators such as the proportion of the population not surviving to age 60 not covered by training 16-year-old young people, people with consumption below the poverty line and officially registered unemployed in the total number of economically active population.

Absolute approach to the definition of poverty is used by the Ministry of Labor of the Republic of Kazakhstan since 1993, carrying out assessment of cost of living and the amount of people in need. Cost of Living in Kazakhstan is equal to the cost of the consumer basket consisting of 70% food and 30% of other goods and services (Today.kz, 2013). Given the economic conditions of the poverty line is usually determined as a percentage of the minimum subsistence level. The government defines the poverty line, in general, and in the individual in each region.

The unemployment rate among young people aged 15-28 years in the republic is 5.9 percent with a total unemployment rate of 5.2 percent. This is achieved thanks to the fact that the Head of State, the Government pay very serious attention to the problems of youth employment (Alimbayeva, 2015). It is a disorder which that disturbs society because it increases crime level within young people and it is bad for economy because long term unemployment decreases the number of people who are ready to work. Mostly young people are choosing to stay in education because of this downturn (Paul Bivand, Laura Gardiner, Danielle Whitehurst & Tony Wilson, 2011). The state develops various methods for preparation of the young population for employment. These methods include, social programs of employment, service of higher educational institutions after receiving the higher education and other social programs. Over one million young people are unemployed, long-term youth unemployment is above 250,000 for the first time since 1994 and the number of young people not in full-time education or employment has passed 1.4 million (Paul Bivand, Laura Gardiner, Danielle Whitehurst & Tony Wilson, 2011). One of the effective tools which can be used to decrease rate of unemployment among youth is apprenticeships. From the economic point of view expenses on professional practice are unprofitable for some countries (in particular the countries of the third world) as are expensive and cannot pay off in the future.

According to Mustafayev N.I. (2011), overly sharp, very strong differentiation of the population according to various criteria, primarily by income level, becomes an obstacle to the emerging middle class, because blurs its social base, creating a situation where there is a lot of poor little rich and quite a bit of «average» [3]. This situation is obvious — Kazakh society is extremely polarized, posing a threat to its political stability.

The Government also determined the main causes of poverty in Kazakhstan:

— Unemployment

— Low wages, pensions and social benefits

— The decline of the infrastructure that results in isolation of poor people living in remote areas

— Reducing the amount of free medical services

— Reducing the number of regular and vocational schools in rural areas

— Low efficiency of targeted social assistance provided by the state.

The review of the researches helped to identify the main negative consequences of poverty:

1. Contraction and relaxation of the gene pool of the nation: a reduction in life expectancy of the population, the decline in the birth rate, the deterioration of the health status of the population, the growth of deviant behavior, alcoholism and drag addiction.
2. The rise in crime, an increase in security threats personality.
3. The growing threat of social unrest, dissatisfaction with the standard of living, protests (monthly protests of pensioners in Almaty, the seizure of vacant buildings homelessness, hunger strikes and self-immolation of shares).

Thus, the problem of poverty in Kazakhstan still exists and has the very big significance, and also it requires urgent attention, threatening to undermine the foundations of the country’s security.

At the same time, the ex-minister of Labor Zhumagulov B.T., representing the Government — one of the stakeholder of the problem, in May 2013 said that «The analysis shows that overall employment program has a positive impact on the labor market. As a result, eighteen-month program provided employment to more than 150,000 people employed women has increased by 80,000 people, the number of self-employed decreased by 52,000 people». According to him, for the half year increased by 6.2% the income of rural residents, the number of recipients of social assistance decreased from 139.3 thousand to 97.3 thousand people, the level of poverty in rural areas decreased by 3.4%. [7]Still one of the most vulnerable groups is the rural population, which do not have the equal chances for the employment and social guarantees from the government, comparing to the urban population. Despite the decline in poverty in urban and rural areas the gap between them increased from 1.1 times to 2.7 [4]. Another problem is the low effectiveness of the governmental actions in reducing of the poverty in the rural regions, because of the corruption. The corruption in the rural regions is more spread and has more chances to development comparing to the urban regions. The local government thus should pay more attention on the realization of the programs and implementation of the plans.

The existing governmental programs show the good results, at least we can see it in the different reports of the local and central government, and also the independent organizations, like UN show that the level of poverty is decreasing in our country, but nevertheless, the recent financial crisis showed that the situation is still emerging. On the other hand, the data of state statistics on the number of unemployed obtained by calculation, are insufficient in view of the fact that the Republic of Kazakhstan Statistics Agency does not conduct regular random population surveys and other research activities that allow to analyze unemployment with rates of secondary, additional, temporary employment, as well as hidden unemployment. So, the general recommendation for the local government is to control the existing programs, because on the paper all the programs look good, and they take into account different points, so the problem is in the implementation of the programs. The problem of corruption also plays its role in this issue.

Weak governance hampers the fight against poverty and exacerbates inequality. In this case it is necessary to distinguish two aspects — the official and unofficial payments. In the second case, the corruption has disproportionately strong effect on the poorer part of the population: the proportion of bribes paid in the income of poor households at over twice the proportion of affluent households. Businesses and households recognize that corruption is detrimental to the standard of living and the uniformity of the distribution of income.

Given the limited capacity of regional budgets of social assistance is intended to cover low-income citizens with incomes below the poverty line. Accordingly, the priority will be given to help the most vulnerable young population, large families, pregnant women and nursing mothers, people who can not find work for a long time, etc.

Another contributing factor is the failure of the population to adapt to new conditions and consumer psychology of people, not eradicated during the years of the market economy. According to results of the national survey of adults conducted by the Institute of Development of Kazakhstan, on the process of deepening social inequality 3 3 % of respondents felt it necessary to return the communist model of state regulation of income at 24%, supported the creation of the state of equal starting opportunities with no guarantee of equal results [4]. The differences in the mass consciousness of the population, one of which adheres to the old values of command, and the other — the new liberal, must be considered when modeling the internal policy.

Conclusion

The key factors of improvement of current situation in the country, taking into account the continuing economic crisis have to include the stabilizing and improving the living standards of the population, based on economic growth, through successive reforms in the social sphere, address poverty alleviation through social adaptation, economic rehabilitation and social support, especially for socially vulnerable segments of the populatio. More systematical and competent approach to solve the problems of poverty, the creation of social and economic development programs to the cash distribution for the developed programs is needed. Development of programs should be carefully designed in collaboration with a number of specialists from different areas; we should take into account, first and foremost, the interests of ordinary citizens.