Presentation by Ben Slay, Senior Advisor, UNDP Regional Bureau for Europe and CIS

1. Dialogue on Inequalities
21-22 January 2015 - Istanbul, Turkey
Income Inequalities and Beyond
In Europe and Central Asia
Ben Slay
UNDP Senior Advisor

2. What’s this presentation about?
– Income inequalities
– Non-income inequalities
• What don’t they show?
• Some conclusions
– Inequalities have risen,
but still relatively low
– They need to be:
• Disaggregated
• Monitored
– Some countries are of
particular concern
• What do the regional inequality data show?

3. Income inequality: What do the
regional data show?
• Two common stories:
– Transition economies: “Paradise lost”
• Very low pre-1990 inequalities
• Huge post-1990 increases
• Result: (very) high levels of inequalities
– Turkey: “Traditional developing country profile”
• High levels of income inequality . . .
• . . . That are coming down
• Do the stories hold up?
– Transition economies: Yes, but:
• Choice of base year matters a lot
• Lots of national differences
– Turkey: Yes—but inequalities are still high
• Caveat: Data are imperfect, inconsistent

4. Western CIS, South Caucasus:
Do they fit the profile?
0.1
0.2
0.3
0.4
0.5
1981 1990 1993 1996 1999 2002 2005 2008 2010*
Armenia
Azerbaijan
Belarus
Georgia
Moldova
Ukraine
Income inequality: Gini coefficients
* 2010, or most recent year. Source: POVCALNET (internationally comparable data).

5. Turkey, Western Balkans:
Do they fit the profile?
0.2
0.3
0.4
0.5
1981 1990 1993 1996 1999 2002 2005 2008 2010*
Albania
BiH
FYRoM
Montenegro
Serbia
Turkey
* 2010, or most recent year. Source: POVCALNET (internationally comparable data).
Income inequality: Gini coefficients

6. Central Asia:
Does it fit the profile?
0.2
0.3
0.4
0.5
0.6
1981 1990 1993 1996 1999 2002 2005 2008 2010*
Kazakhstan
Kyrgyzstan
Tajikistan
Income inequality: Gini coefficients
Turkmenistan?
Uzbekistan?
* 2010, or most recent year. Source: POVCALNET (internationally comparable data).

7. Low levels of/reductions in income
inequality can help reduce poverty . . .
0.00
0.05
0.10
0.15
0.20
0.25
0.30
2002 2005 2008 2011
Poverty rate (%)
Gini coefficient
0.3
0.4
0.5
0.6
0.7
0.8
2002 2005 2008 2010
Poverty rate (%)
Gini coefficient
Poverty threshold: PPP$4.30/day. Source: POVCALNET (internationally comparable data).
Belarus Moldova

8. . . . While high/rising income
inequalities can make poverty worse
0.20
0.25
0.30
0.35
0.40
0.45
2002 2005 2008
Poverty rate (%)
Gini coefficient
0.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
2002 2005 2008 2010
Poverty rate (%)
Gini coefficient
Poverty threshold: PPP$4.30/day. Source: POVCALNET (internationally comparable data).
FYR Macedonia Georgia

9. Income inequality:
Some initial conclusions
– FYR Macedonia
– Georgia
– Albania
– Turkey
• Other countries seem to
have been more successful
– Statistical anomalies?
– Or do policies matter?
• Pro-poor growth often goes
with reductions in inequality
• Need to go beyond income
inequality
• Serious data questions
• Inequality concerns seem particularly pressing in:

10. Beyond income inequalities: UNDP’s
Inequality-adjusted HDI
7%
8% 9% 10%
11% 11% 12% 12%
14% 14% 15% 15% 16%
17%
18%
23% 23%
Source: UNDP Human Development Report Office (2012 data).
Human development losses due to inequalities
in per-capita GNI, education, life expectancy

11. Maybe what matters is exclusion?
(Especially from labour markets)
35%
40%
45%
50%
55%
60%
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
BiH, FYRoM, MNE, SRB
Albania, Turkey
Western CIS
Caucasus
Central Asia
Share of population
aged 15 and above
that is employed
World Bank data, UNDP calculations (unweighted averages). 11

12. . . . Disaggregated by vulnerability
criteria (ethnicity)?
BiH FYRoM Serbia Montenegro Croatia Albania
62%
55%
43%
37% 36%
27%
54%
53%
49%
44%
65%
23%
29%
31%
23%
20%
14% 13%
Youth
Roma
National
Unemployment rates
for youth, Roma
Sources: ILO, national statistical offices, UNDP/EU/World Bank Roma vulnerability database. 2011 data.

13. Other “new poor” (“newly
vulnerable”): Migrant households
42%
32%
25%
21%
14% 12%
Ratios of remittance
inflows to GDP (2013)
Kyrgyzstan: Income
poverty rates
Sources: National statistical offices, World Bank, IMF, CBR data; UNDP estimates.
2010 2011 2012 2013
34%
37%
38%
37%
40%
43%
45%
44%
W/ remittances
W/out remittances

14. Some conclusions
– But long lags affect
even internationally
comparable income
inequality data
• Reducing income
inequalities seems to
matter for reducing
poverty
• Need to go beyond
income inequalities
– Post-2015 indicators to
underpin the SDGs
• Better data are needed for many inequality indicators
– Especially for non-income inequalities

15. Dialogue on Inequalities
21-22 January 2015 - Istanbul, Turkey
Thank you very much!
Ben.slay@undp.org