• In the early 1990s, poverty rose in many countries in the Europe and Central Asia (ECA) region, pushing many countries off track to attain the first Millennium Development Goal (MDG) – to reduce poverty by half by 2015. More recently, a rebound and strong growth greatly reduced poverty in many ECA countries and put many back on track.  Indeed, ECA saw 41 million people move out of $2-a-day poverty between 1998 and 2003 (regional experts view the $2-a-day measure as more appropriate for that cold climate).¹

• Still, using the standard MDG baseline of 1990, a further spurt in growth is needed for all ECA countries to meet the first MDG. Also, among the low-income Commonwealth of Independent States countries, only Azerbaijan is expected to halve $1 a day poverty by 2015.

• In 2004 about 4.4 million people were living in extreme poverty in ECA, almost 50% more than in 1990 and representing .94% of the population compared with .46% in 1990.

• ECA’s low income-countries are growing at an impressive rate, with per capita GDP growth estimated to be 11.5 percent in 2006, faster than in any other region. ECA continues to benefit from strong commodity prices and export earnings.

• ECA has registered the quickest rate of investment climate reform among all the developing regions of the world.

Fragile states

• Poverty is increasingly concentrated in fragile states and territories, which are defined as countries with particularly weak governance, policies, and capacity. Fragile states in this region include the territory of Kosovo and Uzbekistan. In Kosovo, the average yearly per capita income was $1,600; in Uzbekistan, $520.

Gender

• Improvements in gender equality influence poverty reduction and growth directly through women’s greater labor force participation, productivity, and earnings, as well as through beneficial effects on child well-being.
  • Overall, five ECA countries (Belarus, Lithuania, Estonia, Moldova, and Latvia) are in the top quintile in the developing world with regard to the MDG3 indicators for gender equality. In 2005, Turkey was in the bottom quintile.

• • Reflecting a legacy of historically high enrollment rates in ECA, in 2005 countries in the region had high female tertiary enrollment rates that exceeded male enrollment rates.
  • The region’s gender gap in labor force participation is the smallest among all developing regions. According to household survey data, female labor force participation rates in the region are 60 percent or higher (except in Turkey, where the participation rate is 38 percent).
  • Women’s representation in the national parliament declined over the 1990s. The share of seats held by women in national parliament declined from a high of 22 percent in early 1990s to 12 percent by 2000-05, not including Turkey.

Progress toward the Human Development MDGs

Nutrition

• Overall, about 5 percent of the region’s under-five children are underweight.

• Russia and Serbia are off track to reach the nutrition goal. The highest levels of malnutrition and micronutrient deficiency in the region are seen in Uzbekistan (8 percent of under-five children in 2004).

Universal Primary Completion

• ECA is close to achieving the universal primary completion goal. 

Child Mortality

• The Czech Republic is a strong performer among the region’s middle-income countries, having reduced its under-five mortality rate from 13 per 1,000 live births in 1990 to 4 in 2005, an annual percent decrease of 7.9 percent.

• The region’s share of assisted births was 47 percent in 2003.

Maternal Health

• The rate of maternal mortality in the region was 194 deaths per 100,000 live births in 2000, the third highest rate among developing regions (after Sub-Saharan Africa and South Asia).

• Trends in administrative data indicate that most of the new EU member countries of Eastern and Southeastern Europe are expected to achieve the target of a 75 percent reduction in maternal mortality. Among the middle-income CIS countries only Kazakhstan is assessed as unlikely to achieve the MDG.  None of ECA’s lower income countries looks likely to achieve the goal.

Combating Disease

• The incidence of tuberculosis increased in the region—from 51 cases per 100,000 people in 1990 to 83 in 2004.

Using Resources Wisely

• The region is on track for the improved water supply target, but some countries have actually regressed. For example, 94 percent of Uzbekistan’s population had access to improved water sources in 1990.  Only 82 percent did in 2004.

• The region is off track for increased access to sanitation. Georgia has performed poorly, decreasing from 97 percent access to improved sanitation in 1990 to 94 percent in 2004.

• The region has registered a downward trend in adjusted net saving (a decrease of 11 percentage points) owing to an increasing extraction of oil, which has not been offset by an equivalent increase in saving.

The Role of Quality in MDG Progress

• Despite primary enrollment rates over 95%, barely half of Turkish fourth graders can read at the lowest-threshold-level of literacy on OECD-benchmarked tests, as compared to 96% of nine year olds in OECD countries. While expanding access to education and health remains important, quality is critical.

• Official Development Assistance (ODA) to the region decreased from 2004 to 2005.  Also, ODA for the low-income countries in the region (Moldova, Uzbekistan, Kyrgyz, and Tajikistan) collectively decreased. Since 2001, ODA to those countries increased by just 9 percent.
• Non-concessional lending to Europe from EBRD and the World Bank (IFC and IBRD) more than doubled from 2003 to 2006.