This report examines the impact of the transition on living standards in Kazakhstan, assesses the scope for burgeoning growth to reduce poverty, and makes recommendations on how to strengthen the social safety net. There are three principal findings. First, over a third of the population lived below a 'subsistence minimum' living standard in 1996. This is significantly lower than estimates of poverty based on Family Budget Survey (FBS) income distribution data, and is due to problems with the measurement of income in the FBS. Second, given the proportion of the population that can be considered poor, it should be clear that the problem of poverty cannot be eliminated by public transfer programs. Indeed, the social safety net has shrunk substantially since independence under the combined impact of falling revenues and the need to maintain fiscal discipline. Strong and sustained growth will therefore be key to poverty reduction in Kazakhstan. Third, given that it is unrealistic to expect a significant expansion of social protection expenditures in the near future, assisting the poor will hinge on making existing
social programs more effective. This should include maintaining an adequate income floor for pensioners, increasing the coverage of unemployment benefit, and reducing the leakage of child allowances and other social assistance to the non-poor.