Poverty and inequality
Over the recent years, several trends have put a strain on prospects of socio-economic development in Europe and Central Asia. Covid-19 was followed by geopolitical crises, which exposed vulnerabilities engendered by commodity dependency and rising food and energy prices. Lastly, the intensifying effects of anthropogenic climate change and fossil fuel-based economies only magnified the existing structural challenges on regional, sub-regional, or country-specific levels. Amidst uncertain times, emerging vulnerabilities can put large sections of people at risk of poverty and exclusion. Lack of decent employment, widespread informality, shortcomings of social safety nets, and disrupted value chains are some of the common problems experienced by the countries in the region in varying degrees.
On the other hand, high and increasing inequalities are increasingly understood to undermine the pathways of sustainable and inclusive development. Material deprivations are worsened by unequal distribution of opportunities, which further erodes social cohesion and calcifies social barriers and exclusion.
As the second half of the Agenda 2030 progresses, UNDP seeks solutions that harness the power of structural transformations and of people-centered approaches to accelerate the achievement of Sustainable Development Goals.
With a principled, total commitment to Leave No One Behind, UNDP's Inclusive Growth Team in Europe and Central Asia promotes development solutions that accelerate growth and harness it for shared prosperity, inclusivity, and equality, while heeding to planetary limits. For this purpose, we engage with the countries of the region through providing strategic policy advice, programming support, and knowledge management anchored in Poverty and Inequality signature solutions. We provide support to countries through (i) Social Protection for an inclusive development pathway preventing insecurities and empowering through capabilities, (ii) Jobs and Skills Development assuring transition to formal economies and adapting to the change induced by digital and green transition, (iii) resilient and sustainable Trade and Value Chains with augmented export and productive capacities, and (iv) national and local Development Planning that responds to the complexity of planetary, governance, and societal challenges.
Inclusive Growth in Europe and Central Asia addresses development challenges by promoting approaches anchored in Poverty and Inequality signature solutions. At the same time, our integrated solutions in this area contribute substantially to UNDP ambitions in achieving gender equality, SDG localization and integration, and green transition. Three cross-cutting themes align the range of Poverty and Inequality offers and unify them with an aim for structural transformations:
A Just and a Green Transition: It implies a holistic theme emphasizing the shift towards more sustainable practices in the economy and society. While this shift became necessary in the current planetary crisis, Just Green Transition assures that the decarbonization of the economies and the economic activities' pressures on environmental resources and habitats take place efficiently and equitably without exacerbating social inequalities. Our perspective on the transition is based on preventing the adverse socio-economic effects that stem from the pace of change (removing barriers to private sector decarbonization, promoting responsible consumption and targeted protection of vulnerable people, and incentivizing green jobs through upskilling the labor force), tailoring local action and development plans, and facilitating public-private partnerships for the realization of just transition.
Poverty and Inequality Metrics: The preamble to Agenda 2030 calls multidimensional poverty “the greatest global challenge and an indispensable requirement for sustainable development.” SDG 1 sets a target for halving the proportion of men, women and children of all ages living in poverty in all its dimensions by 2030. Achieving these ambitious goals requires developing tools that can elicit actionable, precise insights into people's needs and deprivations, while measuring our progress towards them. Holistic and multidimensional metrics are crucial for addressing poverty and inequality in a multi-faceted manner. For this reason, poverty and inequality metrics constitute a cross-cutting theme that feeds into our work in developing targeted policies and efficient allocation of public budget resources while engaging with countries and vulnerable people in the region.
Informal Economies: In Europe and Central Asia, informal economy accounts for much of economic life. While emerging labor regimes on a global scale due to digitalization and platforms may tend to conflate the boundaries of informal and formal jobs, vulnerabilities and the insecurity of informal economies remain pertinent as ever, made more apparent following the impact of the Covid-19 pandemic. However, informality’s economic and social drivers cannot be reduced to a single dimension. That is why Inclusive Growth takes a two-pronged approach. We guide policymaking into ameliorating these precarities, most severely experienced by the young, women, and discriminated groups, through prioritizing social protection and economic empowerment. On the other hand, entrepreneurship and innovation at play in informal economies require further exploration and elaboration. Transition to formality, therefore, extends protection and achieves economic empowerment while also using their capacity for development.
What we have accomplished
- Our project interventions in Central Asia helped create more than 6000 decent jobs, over 3200 of which were for women. $630M in export contracts were supported, along with 20% increase in the productivity, resource efficiency, and added value of selected niche sustainable products/value chains
- More than 6400 SMEs in Central Asia benefited from trade intelligence infrastructures initiated by UNDP.
- In the Western Balkans, our work on the reintegration of returnees supported 62 returnees to venture into their own businesses, enabled 1742 returnees' access to government services, equipped 1043 with new skills for employability, and reached to 1383 people through 16 social cohesion initiatives addressing stigma.
- We are working together with Uzbekistan, Moldova and Belarus in establishing their national Multidimensional Poverty Indexes (MPI), along with a sustained effort to align countries for knowledge-sharing in developing MPI and a comprehensive status report on the state of Multidimensional Poverty Index in the region.
- We are co-authoring a policy paper on macro-economic impact assessment of the subsidies distributed by the energy vulnerability fund in Moldova.
- We support the creation of Central Asia SDG Platform, which provides a regional view on SDG monitoring, policies, interlinkages, and financing, as well as a vulnerability hotspot map.