Poverty

16 December 2004

The perception of poverty, as presented by the CNN aired articles about the famine in Ethiopia and the other victims of the post-colonial world order, long prevailed as the sole picture that the people in these parts had about this social phenomenon. Humanitarian workers, sacks of flour, rise and wheats, the hungry eyes of the African children and thosands of hands that fight for a peace of bread distributed from a truck were pictures far removed from the Balkans.

That perception of poverty, however, has radically changed over the past 15 years or so. The break-up of Yugoslavia, wars, refugees, destruction of economic resources and the overall drop in the standards of living introduced poverty to our homes. The wars in Bosnia, Croatia, Kosovo, the bombng of FRY, greatly contributed to the fact that the citizens of the Balkans could face the poverty in its ugliest form. The middle class, which is the backbone of every economy in the world and has the greatests consumer potential, dissappeared overnight, leaving in its place the two extremes: the extremely poor and the filthy rich.

In the years behind us, we witnessed some of the most incredible economic methods utilized by the governments in the region with the goal to create an ilusion of social peace, from pyramidal saving houses to the practical legalization of the gray economy. All those instruments were used by the general population, and were, with time, accepted as legitimate business behaviour pattern. Naturally, the gray economy was most prominent in those areas where it is hard to detect it, in the high offices of power. The state budgets, depleted by wars and international economic sanctions, were filled back then through smuggling operations of what not. Today, that practice is defended, as it is in Montenegro, and justified as the necessary evil and one method for the survival of the nation. Such an explanation may sound hypocritical, but we can't but ask ourselves: How much of the guilt for it falls on us? That is, in terms of the economy. For the political guilt, we have already accepted it...

Perhaps the most prominent form of poverty, of which are the least aware, is the poverty in terms of respect for basic human rights. Corruption, nepotism, abuse of office and other forms of deviant social behaviour, have been accepted, over time, as normal by the officials, but also by the general population. This is especially true for some forms of corruption which have developed sort of a tradition to the extent that they are no longer perceived as human rights violations, but as an instrument to secure an expedient and efficient service by the representatives of the public services, which we pay for, by the way, through the taxes and other tarrifs.

The years of war, insecurity and fear, the daily struggle to provide the basic material existence, have led us to stop thinking about our civic, economic and cultural rights. The very fact of recognition of poverty as purely economic category is one manifestation of poverty.

The practice of the international institutions, such as the WorldBank and the International Monetary Fund, to assist the poor countries through a system of loans proved a qualified failure, especially in Africa. The loans, which were given to direct management to the governments, often led to increased impoverishment of the already poor, and to accumulation of wealth with those who were already rich, thus increasing the gap between the two social layers.

This outcome has resulted in the adoption of a new model of assistance to the poor countries by the WorldBank and the IMF in 1999. It is based on a creation of a strategy to fight poverty through the greatest attainable social consensus about the depth and width of poverty in a given society. The Poverty Reduction Strategy Paper (PRSP) should represent not only a document that will define the measures used to fight poverty, but establish clear directions for the future economic development of a country. In addition, the demands of the WorldBank and the IMF presume that the process of creation of PRSPs will recognize and measure those forms of poverty that are not purely economic in nature, such as the poverty in education, healthcare, social care, urban planning, respect for human rights, etc.

As far as the Balkans are concerned, of the countries of former Yugoslavia Serbia, Montenegro and Bosnia and Herzegovina are currently involved in a process of creation and/or implementation of PRSP. The civil sector in these countries was involved, to a greater or lesser extent, in the creation process, establishing the necessary link between the decision-makers and those that are stricken the hardest by poverty, the citizens themselves.

Another prominent feature of the countries in the region is that the governments are reluctant to give up on their old habits in terms of citizens’ participation in the decision-making processes. Unfortunately, that participation has been perceived only through the local and national elections, while the space between the election processes remains a “black hole” that functions on the "prior to elections - democracy, between elections - autocracy" principle.

Finally, the time will test the effectiveness of the anti-poverty measures defined in the said documents, or whether, as is the common Balkan approach, it will all end with the "if you don't have a solution, create a strategy and form a commission, and hope for the best".

Croatia

One in six citizens in Croatia is considered poor. Since official statistics are measured for Croatia, the share of poor in the total population of the country has lingered around 17 percent, about 730 000 in actual numbers. There is no indication of poverty levels increasing or going down in Croatia over the past few years.

The general structure of poor people shows that the elderly, retired and unemployed remain the most vulnerable groups. The single person households, the single parent families and families with three or more children have greatest difficulties.

One fifth of persons older than 60 receives no retirement or other income, and 70,000 retired receive less than 500 Kuna monthly. Additional 100,000 retired with monthly income between 500 and 1,000 Kuna also fall into the vulnerable group, together with 150 thousand unemployed that have been seeking jobs for several years.

The slight increase in retirement payments in 2003 has reduced the poverty risk with the pensioners population by 2.5 percent, compared to 2002, but the relative poverty risk remains above the average. The probability of poverty with the elderly is 70 percent greater than with the average Croatian citizens. Generally speaking, the main criteria for analysis of the poverty risks is the monthly income per citizen, and those whose income is less than 60 percent of the average income per certain social layer are considered poor.

The comparison with other states shows that the relative poverty rates in Croatia does not differ greatly from the European Union averages. However, it is not the same whether one lives on 60 percent of the average German or Croatian salary.

Serbia and Montenegro

Poverty, the greatest single problem in the Serbian transition, is visible everywhere and has stricken the middle class the hardest. The privatization of the former socialist enterprises has brought about poverty of the working class. Some 640,000 people work in the gray zone, with the official unemployment figure at about 800,000. Statistically spieaking, Serbia is ten times poorer than Poland and five times poorer than Turkey. Only Albania has worse poverty statistics.

One third of the population lives on less than 30 dollars per month, and 18% live in absolute poverty on less then 20 US Dollars per month. Serbian Government adopted the Poverty Reduction Strategy in October 2003, but one year later, it still awaits to be passed by the Parliament.

The main features of poverty in Serbia are the cover-up unemployment, low level healthcare services, 600,000 refugees that further deteriorate the poverty situation of the population, and 46% of children that live in poverty. Two years ago, for instance, one in ten citizens lived on the existential minimum, on 2.5 US Dollars daily.

In March 2002, UNDP started a program for inclusion of the civil society in the process of preparation of the Poverty Reduction Strategy Paper (PRSP). UNDP and the Catholic Relief Service (CRS) fund the "Civil Society Involvement in Poverty Reduction in Serbia" project, and provide support for 20 local NGOs.

The local actors in Serbia are concentrated on the reduction of poverty, were trained to work in the poverty reduction modules, strengthening of NGO capacieite, analyses of the interest groups and involvement of poor in public debates. The Civil Society Advisory Board expects that, by June 2005, Serbia could receive between 400 and 550 million US Dollars for implementation of the PRPS.

Kosovo

Human poverty as the complex social phenomenon whose totality can be difficult to capture in standard measurements has covered Kosovo as well. There are many contradicting figures regarding poverty in Kosovo, but according to a study conducted by the World Bank entitled "Kosovo Economic Memorandum" shows that poverty in Kosovo is deepening. According to this study, 15 percent of Kosovars live in extreme poverty, while 37 percent are considered to live in poverty.

Always according to this study 15 percent of the Kosovo population posses 0.93 euros a day, which is considered under the limit of extreme poverty? Around 37 percent of the population lives with 1.42 euro per day.

In the World Bank Report for 2002, the level of extreme poverty was 12 percent, while now it has increased to 15 percent. Kosovo's rising poverty, according to the World Bank's report, is influenced by the lack of economic growth and downsizing of donations for 70% during the time-period 2000-2003.

The balance of payments in Kosovo is negative. Only four percent of the Kosovo imports have been covered by exports of Kosovo products which amount to international trade deficit running at 96 percent.