Surprise surprise, Belarus, which never had any economic reforms, is on the high end. I was pretty surprised to read the stuff on Kazakhstan.
Chris Doss The Russia Journal
Trud No. 210 November 20 (?), 2001 [translation from RIA Novosti for personal use only] POST-SOVIET REPUBLICS HAVE DIFFERENT LIVING STANDARDS By Vitaly GOLOVACHEV, Trud political analyst
The Soviet Union's disintegration was announced December 8, 1991, that is, almost 10 years ago. Consequently, 12 Soviet republics became independent states, subsequently merging into the Commonwealth of Independent States (CIS). They had different "jump-off positions" that were determined by economic-development levels, the role of republican economies in the entire system of nationwide co-production arrangements, specific features of the social sphere, minerals, other natural resources, education standards, national mentalities, as well as by local customs and traditions. National-development models also played a really important part in this context.
Living standards constitute a veritable indicator, or litmus test, for assessing the social efficiency of specific reforms. They say that statistical records know everything; however, the situation is somewhat different in this particular case. Press releases being issued by the CIS Committee for Statistics imply that Uzbekistan, Turkmenistan and Georgia don't submit the relevant data dealing with their respective wages and other vital social indices. Therefore we had to find all the required materials on our own. The Georgian statistical service eagerly informed me about average wages being received by local hired workers (90-106 lari), also telling me about the number of Georgians, who live below the official poverty line (approximately 50 percent of the entire republican population). I also learned the size of minimal pensions (14 lari). All these statistics enabled me to compare some aspects of living standards in 10 CIS countries.
First of all, I'd like to say a few words about the wages of hired workers. Given real-life inflation, such wages have soared by 7-44 percent in Azerbaijan, Armenia, Belarus, Kazakhstan, Kirghizia, Moldavia, Tajikistan, Ukraine and Russia. Table One highlights that tremendous differentiation in the given sphere.
Table One
Average Wages in Terms of US Dollars
(Official National Exchange Rates)
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September 2001 September 2000
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Kazakhstan $124 $99
Russia 119 85
Belarus 96 65
Ukraine 61 46
Azerbaijan 57 45
Georgia 46-54 --
Armenia 43 41
Moldavia 43 35
Kirghizia 31 25
Tajikistan 12.6 9.8
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It turns out that Kazakhstan, Russia and Belarus still lead the way here; meanwhile the Tajik situation is worse than anywhere else. The situation with minimal wages is even more contradictory. Such wages account for 36 percent of average Ukrainian wages; meanwhile the break-down for Kazakhstan and Russia is 19 percent and 9 percent, respectively. However, minimal wages tend to differ even more in dollar terms. For example, Tajikistan offers attractive minimal wages to the tune of $1.3, whereas minimal Kazakh wages stand at $23.6.
Frankly speaking, per-capita CIS wages or cash incomes are obviously not enough to analyze the overall situation because one should also heed prices and many other factors, too. One should know the number of people living below the official poverty line in every CIS country, the size of the middle class, as well as social-stratification levels for the sake of compiling an authentic survey in the sphere of living standards. However, we don't have any similar statistics being based on a standard methodology. That's why we had to do some simple "homework," which, nonetheless, provides an insight into all the main social trends.
How many food packages were bought in CIS capitals for average August 2001 wages? The answer can be found in Table Two, which doesn't list Baku and Yerevan because any data about their respective wages is lacking. A standard food package includes seven staple foods, e.g. one kg of beef, one kg of butter, one kg of granulated sugar, one kg. of wheat bread, one kg of potatoes, one liter of milk and one liter of cooking oil. How can this choice be explained? First of all, such foods constitute an essential part of every person's diet. Second, we know the price of such foods in CIS capitals. A similar 1988-vintage indice should also be examined in order to complete this jig-saw puzzle.
Table Two
How many packages comprising seven staple foods could be bought in CIS capitals for average August 2001 wages?
And how many similar food packages could be bought in former Soviet republics for 1988-vintage wages? ---------------------------------------------------------------- - CIS The number of The number of food packages countries food packages that were bought for (Soviet that were bought average wages in 1988 republics for average in 1988) wages in
September 2001 ---------------------------------------------------------------- - Minsk 26 food packages 24 food packages (Belarus) Astana 24 23.6 (Kazakhstan) Moscow 18.5 24 (Russia) Kiev 15.6 22.6 (Ukraine) Kishinev 9.6 20.1 (Moldavia) Bishkek 7.8 19 (Kirghizia) Tbilisi 5.7-6.8 17.4 (Georgia) Dyushambe 3.1 17.7 (Tajikistan) ---------------------------------------------------------------- -
Minsk and Astana now offer 1988-vintage wages in terms of their purchasing power. Meanwhile Tajik and Georgian social sectors "boast" the most involved situation of them all. As of 1988, the people of Tajikistan could buy nearly 18 food packages for their average wages; however, only three packages can be bought at this stage. This is seen as an unprecedented slump in the post-Soviet social sector. The purchasing power of Georgian wages has plunged 2.5-3-fold. To my mind, future historians will dot all the i's and cross all the t's. Still one would like to answer quite a few questions already today. Why, for example, have the people of Georgia become so impoverished? Official statistics imply that 50 percent of all Georgians now live well below the official poverty line. Pitifully small and sporadic wages make it well-nigh impossible to support a family in Georgia; huge wage arrears should also be mentioned in this respect. Many Georgians don't have any jobs whatsoever. People are trying hard to find even part-time employment at improvised street labor exchanges all over Georgia. Tiny 14-lari ($7) minimal pensions force Georgia's senior citizens to eke out a miserable existence. The republic's urban residents, who used to prosper during the Soviet period are plagued by regular power shut-offs, also buying gasolene on the black market for their used Lada cars; such gasolene is better than the one being offered at official gasolene stations. All this seems like a never-ending nightmare.
The rather involved Tajik situation can be explained by persisting regional tensions, as well as by the least impressive economic potential (among other CIS countries). Tajikistan's per-capita GDP totalled $159 last year (in line with official exchange rates). Meanwhile Georgia boasts a much more impressive per-capita GDP, i.e. $608. So, how can one explain such a drastic decline in living standards?
First of all, this can be explained by serious economic problems, which had set in after the disruption of traditional economic ties between former Soviet regions. Such problems were also caused by mistakes in the field of economic development, as well as by the rather involved domestic situation. The Georgian GDP increased by an impressive 4.8 percent throughout the January-September 2001 period; nonetheless, its industrial output (in fixed prices) has even diminished. For example, footwear production has been halved over the same time period. The country's slaughter-houses also receive 7 percent less cattle and poultry for their needs (January-June 2001 estimate). Quite a few products can't be sold on the domestic market and elsewhere. Georgia's foreign- trade deficit (in its trade with other CIS members and other countries of the world) has increased by almost 50 percent throughout the January-August 2001 period (on similar 2000 levels), totalling $293 million.
The Soviet Union disintegrated a decade ago, with national living standards plunging virtually overnight in every newly independent state. Russia, for one, used to have 60 million impoverished people (40 percent of its entire population). However, an economic recovery set in some time later, also propping up the social sector. The speed of such processes varies from country to country. Some CIS countries are making remarkable headway, while others still tend to fall behind. Some blunders, which were made during the implementation of economic reforms, hinder the assertion of cost-effective market economics. The same can be said about ill-conceived political decisions, as well as red tape and corruption at every official and administrative level. Those time-tested inter- republican economic ties were also severed, thus hitting national economies real hard.
Surely enough, quite a few positive shifts exist. A survey, which was conducted by experts from the CIS Committee for Statistics, shows that most CIS countries managed to retain their economic-growth rates over the January-September 2001 period. GDP volumes have swelled; and industrial production has been expanded (with the exception of Georgia). The same can be said about the swelling retail trade turnover (except Tajikistan). Real-life popular incomes and wages continued to increase; however, Belarus and Ukrainian wages dwindled somewhat this past September. Nevertheless, the financial standing of many legal entities remains rather involved, despite overall positive trends. As a rule, incoming investment is not enough to ensure a sustainable economic recovery. Moreover, low popular incomes serve to impede domestic demand, as well as national production expansion. 26.4 percent of the entire Ukrainian population live well below the official poverty line. 27.9 percent of all Kazakh citizens also fit into this category. The respective Russian share is 31.3 percent. (Such estimates were made in line with national social standards -- Ed.) However, this share is even more impressive in other countries. All of us must consolidate positive trends, subsequently rectifying the current situation. Expanded mutually-advantageous cooperation, more profound integration processes and stable good-neighborly relations meet the interests of all CIS countries.