Georgia : Poverty assessment

This report presents a comprehensive
analysis of poverty and its main determinants using the most
recent 2007 Living Standards Measurement Survey (LSMS) data.
It provides an in-depth analysis of rural poverty, the
linkages between labor markets and poverty, the importance
of social transfers for poverty alleviation, and the
progress made since 2003 in the health and education
sectors, and also presents some findings on incomes trends
based on the Household Budget Survey from 2003 to 2006. The
report also simulates possible poverty impacts from the dual
shocks of the August 2008 conflict and the current global
financial crisis. Main messages in the document are: (1) the
available data indicate that living standards in Georgia
have improved in many dimensions since 2003; (2) poverty in
Georgia continues to be deeply entrenched in rural areas,
accounting for 60 percent of the poor; (3) the performance
of the labor markets has so far not contributed much to
poverty reduction; (4) social assistance became an
increasingly important lifeline for Georgia's poor; (5)
the double shocks of the August 2008 conflict and the global
financial crisis risk undermining the poverty reduction
effort; and (6) the poverty reduction strategy of the
government of Georgia should focus on: extending the
coverage of the Targeted Social Assistance to reach more of
the poor; promoting investments in infrastructure and
creating opportunities for off-farm employment in rural
areas; and continuing reforms in the health and education
sectors to improve human capital, which is the prerequisite
for sustainable economic growth and poverty reduction. The
main findings state that since 2003, Georgia has implemented
an impressive array of reforms. Unfortunately, the absence
of comparable household surveys over time precludes a proper
analysis of the impact of these reforms on growth and
poverty reduction.