Unpacking inequalities in Europe and Central Asia Ben Slay, UNDP senior advisor 8 May 2015

Global inequality discourse: Two dominant threads “Northern”: OECD countries (Picketty, Stiglitz) Impact of trade, financial globalization, demographics, Strong links to social inclusion Good data, can focus on wealth as well as income “Southern”: Developing country focus (Humanity Divided) Coverage of social protection/services Progressive taxes Role of women

Neither focus is quite right for our region Post-socialist legacies left well established systems of social protection, services . . . But with growing gaps? Position of women better than in other developing regions . . . But is progress being lost? Inequalities in our region do seem to be important Apparent in national consultations Maybe because people aren’t used to them?

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

Western CIS, South Caucasus: Do they fit the profile? Income inequality: Gini coefficients * 2010, or most recent year. Source: POVCALNET (internationally comparable data).

Turkey, Western Balkans: Do they fit the profile? Income inequality: Gini coefficients * 2010, or most recent year. Source: POVCALNET (internationally comparable data).

Central Asia: Does it fit the profile? Income inequality: Gini coefficients Turkmenistan? Uzbekistan? * 2010, or most recent year. Source: POVCALNET (internationally comparable data).

Low levels of/reductions in income inequality can help reduce poverty . . . Belarus Moldova Poverty threshold: PPP$4.30/day. Source: POVCALNET (internationally comparable data).

. . . While high/rising income inequalities can make poverty worse FYR Macedonia Georgia Poverty threshold: PPP$4.30/day. Source: POVCALNET (internationally comparable data).

Income inequality: Some initial conclusions Serious data questions Inequality concerns seem particularly pressing in: 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

Beyond income inequalities: UNDP’s Inequality-adjusted HDI Human development losses due to inequalities in per-capita GNI, education, life expectancy Source: UNDP Human Development Report Office (2012 data).

Maybe what matters is exclusion? (Especially from labour markets) World Bank data, UNDP calculations (unweighted averages).

. . . Disaggregated by vulnerability criteria (ethnicity)? Sources: ILO, national statistical offices, UNDP/EU/World Bank Roma vulnerability database. 2011 data.

Other “new poor” (“newly vulnerable”)—Migrant households Kyrgyzstan: Income poverty rates Ratios of remittance inflows to GDP (2013) Sources: National statistical offices, World Bank, IMF, CBR data; UNDP estimates.

Data review: Some conclusions Better data needed for many inequality indicators Especially for non-income inequalities But long lags affect internationally comparable income inequality data Reducing income inequalities matters for reducing poverty Need to go beyond income inequalities Post-2015 indicators to underpin the SDGs

Dialog on inequalities “takeaways” Pluses: Strong interest from national, regional partners Empirically: income poverty and inequality move together in our programme countries Minuses: Significant measurement issues: Data gaps (quality, quantity) Low awareness of new indicators (e.g., Palma ratios) How to measure non-income inequalities? Except for gender programming, not many “inequality projects” Conflation of inequality, poverty?

From “Dialog on Inequalities” to “Inequalities RHDR” Better connect region with global inequality narratives—and vice-versa Strengthen regional, national programming in inequalities Build a UN(DP) regional inequalities “brand”

“Process, not just a publication” RHDR to serve as platform for: Project development Dissemination of inequalities-related content, knowledge Strong use of social media, innovation opportunities Inequality-related SDGs (especially targets, indicators) to be cross-cutting thread Country case studies included Co-financed by COs, IRH Expressions of interest received to date from 8 COs

Programming questions “Stand alone” versus “mainstreaming” inequality programming? Gender parallel When does the “inequality lens” add value? Socio-economic versus spatial inequalities When is area-based/regional/local development programming about reducing (spatial) inequalities? Do national data support programming to address inequalities? Could this be new programming area? How strong is government interest? How to best link to SDGs?

Thanks!