Transcript Micro Responses during the Transition in Kazakhstan

Micro Responses during the Transition in
Kazakhstan,
Central Asia, and Armenia
Charles Becker
Department of Economics, Duke University
[email protected]
Workshop on Macro Risks and Micro Responses
Friday, February 15, 2008, H-1-200
Europe and Central Asia Region
Of the World Bank
Acknowledgements: Material is drawn from work with co-authors
Irina Merkuryeva, Erbolat Musabek, Ai-Gul Seitenova, and Dina
Urzhumova; valuable research assistance (and information from
their own research) has been provided by Aleksandr Andreev,
Nunik Nahapetyan, and Nurgul Ukueva.
Overview
• Stylized facts
• Mortality: declining life expectancy at birth
• Mortality: rising accidental death and cardiovascular
mortality
• Marriage
• Fertility
• Disability
• Migration
• Remittances
• Earnings, wage gaps, and consumption
Stylized Facts
• Economic deterioration starting (depending on the country)
gradually between 1989 and 1991, accelerating in 1992; with
near collapse occurring 1993-95
• Stabilization in 1996-98 in terms of GDP, but continued formal
sector employment decline
• Renewed crisis 1998-99 loosely associated with Russian debt
default
• Low-grade wars in Armenia (1992) and Tajikistan (1995)
aggravate problems
• Oil and mining-led economic recovery in Kazakhstan (1999 –
present) and Russia (c. 2000 – present) result in recovery to
Soviet peak per capita incomes in Kazakhstan (2004) and
Russia (2006?)
Stylized Facts
(cont.)
• Extremely limited economic recovery in Kyrgyzstan, Tajikistan,
and Uzbekistan; recovery in Armenia driven largely by
remittances
• Initial emigration from Kazakhstan and Central Asia is largely
“European” (Russian, other Slavic ethnicities, German)
• Economic migration of titular nationalities follows with
Russia’s and Kazakhstan’s recovery (KZ becomes a
destination) – shorter term, and linked to remittances
I. Declining life expectancy at birth
• Huge declines registered in Kazakhstan; large declines
elsewhere
• Link to economic collapse is obvious
• Declines understated because of rise in underreporting
of infant mortality
• Decreased accuracy of vital statistics causes downplay
of decline in poorer countries
II. Growth in mortality is not evenly
distributed
• Cardiovascular system and external cause mortality
increases are most important
• Rise is most severe among working-age males
• European male population has the largest increases
III. Declining marriage – with recovery
• Huge declines registered in Kazakhstan, Kyrgyzstan,
and elsewhere
• Recovery follows, especially in Kazakhstan, but only with
a considerable lag after economic recovery is assured
• Part of the decline translates into delayed marriage, as
seen in rising age of first marriage
• However, marriage is very age-concentrated, especially
for women, and remarriage is rare  a large share of
the cohort born between 1973 and 1985 will never marry
IV. Declining birth rates
• Birth rate declines follow declining marriage rates with a
lag.
• Fertility recovery is underway (again, lagging marriages,
which in turn lag economic recovery) in Kazakhstan
• Age-specific birth rate declines are largest for women
under age 25.
• Births have recovered somewhat for women aged 20+;
secular teen birth rate decline has continued.
V. Seeking public assistance: early
retirements & disability pensions
• As employment becomes uncertain, early retirements are
encouraged throughout the region.
• Many also seek disability determination, which is granted
fairly liberally in the early transition years.
• Governments then crack down as costs spiral upward.
• No link in rise in disability to actual health conditions. Rather,
with deteriorating health services, child disability has shown a
secular increase. Rates of reported disease among adult
population have been steady.
• Rehabilitations surge with economic recovery.
Figure 2.2. Percentage of applicants denied disability benefits, 19802005
Figure 2.1 No. of Applicants to Disability Determination vs.
Applicants determined and not detrmined as disabled, 1980=100
300
273
40%
250
35%
12.7%
10%
04
02
20
00
20
98
20
96
19
19
94
19
92
19
90
19
88
19
86
0%
80
-
19
5%
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
32
15%
19
93
20%
84
100
25%
19
130
30%
82
150
Total number of
applicants
Number of applicants
accepted as disabled
Number of applicants
denied disability benefits
19
200
50
38.1%
Figure 3.1 Number of newly adult disabled by main category,
1980-2005 (per 10,000 population at age 16 and over)
45
44
40
35
26
25
28
24
20
15
12
10
9
5
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
0
19
80
persons
30
Newly Disabled among employed population
Newly disabled among unemployed (and those with unspecified status of employment)
Others
Figure 3.2 Number of applicants to disability determination vs. Incidence of adult
disability, 1991-2005 (per 10,000 population at age 16 and over)
90
84
80
70
70
60
50
40
30
28
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
Incidence of Adult Disability, per 10,000
Total number of applicants per 10,000
Figure 3.11 Disability Incidence Rate : Children vs. Adult
(per 10,000), 1980-2005
70.0
33.1
29.0
18.9
18.0
Children under age 16
Adult at age 16 and over
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
8.8
19
82
19
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
Figure 4.3a Number of rehabilitated disabled of all categories disability, 1991-2005(per
10,000)
250
243
232
230
210
190
197
170
157
150
130
118
110
100
98
93
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
VI. Migration
• Russia is main destination
• Urban, Russified, skilled labor outflows are greatest
• Departure of European population encouraged by public
policies
• Middle-aged population 45-59 even more responsive to
differential conditions than younger workers
Migration
(cont.)
• Lags are not terribly long, but are especially short for
widely-available “news” (exchange rate fluctuations,
Russian debt default)
• Migration from Kyrgyzstan, Tajikistan, Uzbekistan,
Armenia should be much less sensitive to relative
economic conditions vis-à-vis Russia, since gaps are so
vast.
• Even in these countries, however, the vast emigration of
the early and mid-1990s has slowed.
Net Emigration Rates per 1,000 Inhabitants (1989-2003)
VII. Remittances
• Tajikistan, Kyrgyzstan, and Armenia are now among the
countries with the highest share of remittances/GDP, in
the neighborhood of 10% to 15%.
• Linked to real estate booms in capital cities (Neinke
Oomes, IMF-Armenia)
• May also have exchange rate and hence Dutch-disease
consequences.
• But, remittances are overwhelmingly used for
consumption, and add to local demand
Remittance income in the Krygyz Republic
Year
Remittances,
mln USD
Remittances/Exports Remittances/GDP, %
%
1995
1
0.2
0.1
1996
2
0.4
0.1
1997
3
0.5
0.2
1998
2
0.4
0.1
1999
1
0.2
0.1
2000
43
8.4
3.1
2001
22
4.6
1.4
2002
40
8.0
2.5
2003
78
13.2
4.1
2004
189
25.7
8.5
2005
322
46.9
13.2
Source: S. Aitymbetov “Emigrant Remittances: Impact on Economic Development of Kyrgyzstan”
ICEG working paper (data obtained from National Statistical Committee, National Bank and
author’s calculations)
Reason for migration, Tajikistan (LSMS)
Freq.
Percent
To start a new job/business
63
5.8
To look for a better paid job
963
89.0
Study
20
1.9
Health
6
0.6
To join family
9
0.8
Marriage
2
0.2
19
1.8
1082
100.0
Other
Total
Remittances by the sending country, Tajikistan (LSMS)
Freq.
Russia
Percent
408
94.01
Kazakhstan
7
1.61
Kyrgyzstan
3
0.69
Uzbekistan
7
1.61
Europe
5
1.15
Other
4
0.92
434
100
Total
Remittances by the purpose of the transfer, Tajikistan (LSMS)
The purpose of transfer
purchases of foods and basic
necessities
Freq.
Percent
421
86.63
investment in construction
5
1.03
investment in HH enterprise
0
0
purchase of durable goods
2
0.41
educational expenses
0
0
Medical expenses
3
0.62
wedding/funeral
1
0.21
child support
1
0.21
53
10.91
0
0
486
100
Charity
Other
Total
Remittances in Macroeconomic Context for Armenia
1998-2003
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
1998
% of GDP
1999
2000
% of exports
2001
2002
2003
% of trade deficit
VIII. Economic colonization
• Investments begin to flow in to Kyrgyzstan
from Kazakhstan
• Trade with China soars
• Invasion of tourists
• Torpedo factory re-opens
• Когда казахи купят Киргизию?
"Караул! На страну покушается Казахстан, мы можем
потерять независимость!" - вопиют нынче иные
киргизские "патриоты". - "Да было б чего терять: наша
госневинность давно уж порушена", - парируют
оппоненты-скептики.
Итак, главный вопрос: чего стоит или точнее - во что
обходится стране "политическая девственность"?
• Землю на побережье Иссык-Куля попытались
захватить местные жители (Киргизия)
Около 200 жителей села Торуайгыр попытались захватить
156 гектаров земли на побережье озера Иссык-Куль. Как
сообщили корреспонденту ИА REGNUM в пресс-службе
МВД Киргизии, сельчане, используя трактор, провели
разметку прибрежной территории на участки.…
• Казахстан и Киргизия построят автодорогу
Алма-Ата - Иссык-Куль
2007-02-01
Министерства транспорта и коммуникаций Казахстана и
Киргизии подписали меморандум о взаимопонимании по
проекту строительства автодороги Алма-Ата - озеро
Иссык-Куль через Узынагаш (Казахстан) и Быстровку
(Киргизия), сообщила пресс-служба казахстанского
Минтранскома.