Orwellian "reforms"

["Ken Hanly" <khanly@xxxxxxxxxxxxxxx>]

  Reform = Increased Poverty. Of course the cure for all this is economic
growth!
    Cheers, Ken Hanly

Poverty Jumped in Former East Bloc As Reforms Took Hold, Study Finds
By PAUL HOFHEINZ (paul.hofheinz@xxxxxxx)
Staff Reporter of THE WALL STREET JOURNAL

PRAGUE -- Far from disappearing, poverty in the former Soviet Union and
Central Europe has risen tenfold in the decade since reforms began, the
World Bank said in a report released on Tuesday. Now, one in five people in
the former Eastern bloc lives in destitution, according to the report.

[http://wbln0018.worldbank.org/eca/eca.nsf/General/40F8E9D019CE2E5C852569580
0636022?OpenDocument]

The report, which is called "Making Transition Work for Everyone: Poverty
and Inequality in Europe and Central Asia," says the poverty found in the
former Soviet bloc is unlike most of the destitution elsewhere in the
world. For starters, poverty in Eastern Europe was virtually nonexistent 10
years ago. In 1988, the World Bank says, the poverty level was only 2% of
the population. Today, the figure is nearly 20%.

In addition, it says, the economic dislocations brought on by Communism's
collapse fell on a highly literate, well-educated population -- a status
among whom the deeply impoverished are seldom found. "Many of the people
who are poor today did not expect to be poor," says Johannes Linn, the
World Bank's vice president for Europe and Central Asia. "This came as a
shock to them."

See the full text of the report on poverty on the World Bank's Web site.

The report also says that income inequality is increasing, and approaching
the levels usually experienced in Latin American countries.

The report cites several reasons for the region's drastic fall in living
standards. Most notable, it says, is the dramatic decline in economic
output brought on by the collapse of the old economic system. In the former
Soviet Union, for example, most economies have shrunk by around 50% in the
10 years of reform. In response, most governments simply don't have the
resources to pay for basic social services any more.

The report says corruption has taken a toll, as well. Many doctors
routinely require patients to pay them cash directly, because the state
(which still owns most hospitals) pays low salaries to the doctors and
nurses. As a result, medical care is becoming less and less adequate for
many who cannot afford to pay for it, the report says.

The poorest country, according to the report, is Turkmenistan, where 80% of
the population lives below the poverty line. Because of its size, Russia
has the most poor people; 60% of the region's poor are found in Russia, the
report says.

For the report, the World Bank set the poverty level at $2 (2.34 euros) a
day -- a dollar a day more than the level the bank uses in other countries
-- because of the region's extreme weather conditions. It says the harsh
climate means additional heating costs in the winter.

The World Bank says one way to fight the rising poverty would be for local
governments to take more measures to spur economic growth. But, it says,
even economic growth must be supervised by strong government and private
institutions capable of insuring that wealth isn't simply stolen or
misplaced. "It is important that all people participate in the growth," Mr.
Linn says.

The report also found that countries that had pursued reforms the most
consistently often had the least amount of poverty. "Countries further on
the reform path have lower inequality," says Ana Revenga, an economist at
the World Bank and one of the report's authors. "The results [of reform]
have a lot to do with how the reform is carried out."

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