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Poverty Declines Sharply in Eastern Europe and Former Soviet Union, says World Bank

  • Ivana Kuhar

A World Bank report finds that poverty declined sharply in Eastern Europe and the former Soviet Union between the years 1998 and 2003. World Bank experts say, however, that a lot still needs to be done to eradicate poverty throughout Europe.

The World Bank says 40 million people in central and southeastern Europe and the countries that once belonged to the Soviet Union rose from poverty from 1998 to 2003. Asad Alam, team leader for the World Bank report, says economic growth was the driving force behind the poverty reduction.

"This period of analysis, between 1998-2003, is the period in which the whole region - whether it is the new members of the European Union, the CIS countries, or the southeastern countries - they have all been growing. It is this growth that has been the key power for reducing poverty and raising income levels," said Asad Alam.

He says economic growth was sustained during the period, but it varied from country to country.

"Broadly speaking, within the CIS countries, Russia has been the locomotive of growth for many of the countries of the CIS," he said. "The whole movement in the EU-8 countries with greater integration with Europe has been another driver for growth. The cessation of war in the Balkan states has again helped improve the investment climate and bring in new investment."

The report says poverty declined in almost every country of the region. Still, it says, about 61 million people, or 12 percent of the population of Eastern Europe, lived in poverty in 2003.

The report classifies as "poor" people who make less than $2.15 a day.

The World Bank cautioned that to end poverty, the economies of Eastern Europe must grow at a faster pace than currently forecast. It also said the social protection network must be improved, and that the region needs to address issues of a rapidly aging population and government corruption.