Poverty
In all three countries of the South Caucasus, the population and authorities fundamentally disagree in assessing the standard of living. Official statistics report a victory over poverty. But experts and polls claim this to be a myth.
How does this happen?
GEORGIA
At the end of 2022, the Minister of Economy of Georgia stated that "poverty in the country is at an historic low."
Prime Minister Irakli Garibashvili also spoke of an "historical minimum" at a government meeting at the end of November concerning unemployment. Over the past year, more than 100,000 new jobs have been created in the country, poverty has been reduced, and "unemployment has dropped to an historic low," he said.
Chairman of the Georgian Dream party, Irakli Kobakhidze, even promised that by 2030 Georgia would completely “eliminate poverty” at its current pace.
Polls show a different picture, however — according to the IRI poll, unemployment, poverty and rising prices remain the top three problems among the population. Seventy-five percent of NDI respondents believe that over the past ten years poverty has not improved, but gotten worse.
How many poor people are there in Georgia really?
Eka (name changed)
"I'm 38 years old, I live in Kobuleti with my husband and two children. We don't have our own house, we are squatting in an empty building where the department of statistics used to be, I don't know when we will be evicted. My family lives below the poverty line."
More work in summer
"We receive social assistance in the amount of 540 lari [$200], our main income. I also clean houses and hotels. There is more work in the summer when there are tourists. When it's off season there is no work — if I’m lucky, once a week I'll go to someone's house.
“My husband cannot work for health reasons, but he helps me a lot around the house and the children.
“My husband cannot work for health reasons, but he helps me a lot around the house and the children.
“My childhood was also difficult. I was born in the Kobuleti region in the village of Dagvashi. We were six brothers and sisters. My mother was 33 years old when she became a widow.
My father worked in Batumi in the telephone service. He fixed power lines, often stupid errors people made with lines back in the ‘90s. He was electrocuted and died. He was 38.
There are four sisters and two brothers left. My poor mother was in effect our mother, father and grandparents. She worked from morning til night, grew food for sale, kept chickens, and brought them to the city herself and sold them. Then everyone lived in poverty, but we were poorer than others,” Eka says.
My father worked in Batumi in the telephone service. He fixed power lines, often stupid errors people made with lines back in the ‘90s. He was electrocuted and died. He was 38.
There are four sisters and two brothers left. My poor mother was in effect our mother, father and grandparents. She worked from morning til night, grew food for sale, kept chickens, and brought them to the city herself and sold them. Then everyone lived in poverty, but we were poorer than others,” Eka says.
If you look only at the statistics for the last ten years, poverty in Georgia is in fact declining.
According to the National Statistical Office of Georgia, in 2012 30%of the population lived below the poverty line. In 2021, this figure dropped to 17.5%.
According to the National Statistical Office of Georgia, in 2012 30%of the population lived below the poverty line. In 2021, this figure dropped to 17.5%.
This is 645,000 people for a country of 3.7 million people, or every sixth Georgian.
And that in itself would be quite bad, but depending on how you reckon poverty, the total could be much higher.
And that in itself would be quite bad, but depending on how you reckon poverty, the total could be much higher.
Living Wage Tricks
Absolute poverty is when a person or family lives below subsistence level. But this calculation is so relative that it is hardly possible to draw conclusions about the level of poverty in the country on its basis.
PLUS 1 GEL - AND YOU ARE NOT POOR ALREADY?
For example, suppose the subsistence minimum is 100 GEL. Those who have less are considered poor, and those who have 101 are no longer considered poor and are not included in the official statistics.
PLUS 1 GEL - AND YOU ARE NOT POOR ALREADY?
For example, suppose the subsistence minimum is 100 GEL. Those who have less are considered poor, and those who have 101 are no longer considered poor and are not included in the official statistics.
IF UNEMPLOYMENT IS UP, HOW IS POVERTY DOWN?
Experts say that when analyzing statistical data it is important to know what factors lead to a decline in the level of poverty.
For example, the absolute poverty rate fell in 2021. However, statistics show that unemployment has not only not decreased, but has risen sharply. The question arises of how several thousand people were lifted out of poverty if there was less work?
Experts say that when analyzing statistical data it is important to know what factors lead to a decline in the level of poverty.
For example, the absolute poverty rate fell in 2021. However, statistics show that unemployment has not only not decreased, but has risen sharply. The question arises of how several thousand people were lifted out of poverty if there was less work?
SOCIAL ASSISTANCE: NOT POOR?
One of the most important factors influencing official poverty figures in Georgia is social assistance. If a person has minimal means of subsistence, they are statistically not considered poor, no matter where he got the money.
For example, during the coronavirus pandemic many people received social assistance, and during this period financial assistance for children and other social benefits increased.
Now approximately 17.6% of the country's population, or more than 655,000 people, receive social assistance. Because many people living below the poverty line received extra money from these benefits, they were automatically removed from stats on poverty.
That is, these people did not "get rich" as a result of any economic activity, but simply received social benefits.
One of the most important factors influencing official poverty figures in Georgia is social assistance. If a person has minimal means of subsistence, they are statistically not considered poor, no matter where he got the money.
For example, during the coronavirus pandemic many people received social assistance, and during this period financial assistance for children and other social benefits increased.
Now approximately 17.6% of the country's population, or more than 655,000 people, receive social assistance. Because many people living below the poverty line received extra money from these benefits, they were automatically removed from stats on poverty.
That is, these people did not "get rich" as a result of any economic activity, but simply received social benefits.
According to independent economists, in fact it was not the poverty rate that reached an historic low in Georgia in 2022, but that the number of socially vulnerable people reached an historic maximum.
Eka
"None of us went past ninth grade. One brother graduated from the Naval Technical School but could not practice his profession. Mom alone could not afford to send us to study. We also did not have the luxury of doing lessons all day. I helped my mother do housework, my older sister was in charge of cooking and housework, my brothers worked as porters to bring some money in.
Unfortunately, none of us could get out of poverty. We all went our own way, everyone got married, but it’s hard for all of us even now. But we are a team, we help each other.
Looking back, I think I could have studied design. I drew well, loved to design clothes, work with my hands, sew and knit. And now, if my children don't have something, socks or a sweater or a hat, I sit down and knit this thing in one night. I don't have time for that during the day."
Unfortunately, none of us could get out of poverty. We all went our own way, everyone got married, but it’s hard for all of us even now. But we are a team, we help each other.
Looking back, I think I could have studied design. I drew well, loved to design clothes, work with my hands, sew and knit. And now, if my children don't have something, socks or a sweater or a hat, I sit down and knit this thing in one night. I don't have time for that during the day."
Become a hairdresser and have your own income
My family receives the highest social assistance package of 540 lari [$200] per month. I hide my part-time jobs by cleaning. If, God forbid, even a small amount is credited to my bank card at least once, they can refuse social assistance.
My dream is to have my own house. Here in Kobuleti we live with twelve homeless families. They have tried to evict us, but we won't leave. We have nowhere to go. I would also like to have a small beauty salon. I would learn how to cut and style my hair and have my own income.
I try my best to make sure my kids do well in school. I tell them all the time that we have nothing, and only knowledge can lift them out of poverty. I have two girls, eight and thirteen. They study well, but they don't try very hard. The pandemic and distance learning have set us back a lot. The youngest is very emotional, she is worried that we and our other neighbors do not have a home. So she says she’ll become an architect and build a house for everyone."
My dream is to have my own house. Here in Kobuleti we live with twelve homeless families. They have tried to evict us, but we won't leave. We have nowhere to go. I would also like to have a small beauty salon. I would learn how to cut and style my hair and have my own income.
I try my best to make sure my kids do well in school. I tell them all the time that we have nothing, and only knowledge can lift them out of poverty. I have two girls, eight and thirteen. They study well, but they don't try very hard. The pandemic and distance learning have set us back a lot. The youngest is very emotional, she is worried that we and our other neighbors do not have a home. So she says she’ll become an architect and build a house for everyone."
Authors
Magda Gugulashvili, Sopho Zedelashvili
Magda Gugulashvili, Sopho Zedelashvili
AZERBAIJAN
According to the State Statistics Committee of Azerbaijan, as of January 1, 2022, the poverty rate in the country was 5.9%. More than 10.1 million people lived in Azerbaijan at that time, which means there were 600,000 poor people.
This figure is lower than what was recorded a year earlier at 6.2%, but it significantly exceeds the poverty rate in 2019 before the coronavirus pandemic — 4.8%.
This figure is lower than what was recorded a year earlier at 6.2%, but it significantly exceeds the poverty rate in 2019 before the coronavirus pandemic — 4.8%.
Officially, poverty in Azerbaijan is measured according to the document of the State Statistics Committee called "Diagnostics of Households". The main factor here is the volume of consumer spending per person, or the subsistence level.
Starting January 1, 2023, that will be 246 manats [about $145]. If the monthly income of a family is less in distribution to the number of its members, these people are considered poor.
Such a strategy carries with it the same risks that we have already seen in the example of Georgia. If a person earns 150 manats, this does not change her or his position in any way, but they are not included in poverty statistics. Also, if a family receives social assistance, even once, they are also not included.
But there is another component that is specific to Azerbaijan which makes all the statistics on poverty mythological.
According to many experts, even the updated living wage is not really what they say. It is impossible to survive on this amount in Azerbaijan
What can you buy for a living wage? Calculations for the year
Products
• 136.8 kg of bread and bakery products (375 g per day);
• 54.8 kg of potatoes (150 g per day);
• 32.9 kg of meat and meat products, including poultry (90 grams per day);
• 7 kg of butter (19 g per day);
• 7.7 kg of fish and fish products (21 g per day);
• 10.9 kg of vegetable oil, margarine and other fats (29 gr).
Cloth:
• Coat or other outerwear - 3 pieces at 8 years;
• Underwear - 9 pieces for 2.5 years (piece for 102 days);
• Socks - 7 pairs for 1.5 years (a pair for 78 days);
• Shoes - 6 pairs for 3.5 years (a pair for 213 days).
• Internet - 1 hour per day for the whole family.
• 136.8 kg of bread and bakery products (375 g per day);
• 54.8 kg of potatoes (150 g per day);
• 32.9 kg of meat and meat products, including poultry (90 grams per day);
• 7 kg of butter (19 g per day);
• 7.7 kg of fish and fish products (21 g per day);
• 10.9 kg of vegetable oil, margarine and other fats (29 gr).
Cloth:
• Coat or other outerwear - 3 pieces at 8 years;
• Underwear - 9 pieces for 2.5 years (piece for 102 days);
• Socks - 7 pairs for 1.5 years (a pair for 78 days);
• Shoes - 6 pairs for 3.5 years (a pair for 213 days).
• Internet - 1 hour per day for the whole family.
How many poor people are there in Azerbaijan really?
Aunt Sona
Sona hala (aunt Sona), as her neighbors call her in Sabunchi village, not far from the center of Baku, lives in an old trailer. She lives with her son, daughter-in-law and two grandchildren. “We didn’t have our own house, my husband got this trailer, installed it here in the village and we have been living here since then,” she says.
After the death of her husband, Sonya must be content with only a disability pension: “I receive 130 manats [about $78] in total. I don’t work, and they don’t give me anything for the lack of a breadwinner. That's all I get for a month."
After the death of her husband, Sonya must be content with only a disability pension: “I receive 130 manats [about $78] in total. I don’t work, and they don’t give me anything for the lack of a breadwinner. That's all I get for a month."
Meat is too expensive for us, but sometimes neighbors treat us
Sona's son does not work either, but earns through odd jobs. “If a neighbor’s floor needs to be replaced, or someone needs to carry sand in bags somewhere, my son will go do it. But is that not enough these days?” Sona says.
All her money goes to medicines and sweets for her three year old grandson, which she can afford on her son’s meager income. “We cook different soups. How much money is left for groceries? Of course, we don’t have meat, it’s too expensive.”
A kilogram of boneless meat in Baku now costs 17 manats [$10]. “But we are not completely without meat either. Neighbors and acquaintances bring it during Eid al-Adha, or someone sacrifices a ram. They know about us. They understand that we need help. They help when they can,” Sona hala says.
All her money goes to medicines and sweets for her three year old grandson, which she can afford on her son’s meager income. “We cook different soups. How much money is left for groceries? Of course, we don’t have meat, it’s too expensive.”
A kilogram of boneless meat in Baku now costs 17 manats [$10]. “But we are not completely without meat either. Neighbors and acquaintances bring it during Eid al-Adha, or someone sacrifices a ram. They know about us. They understand that we need help. They help when they can,” Sona hala says.
According to economist Ali Akhmedov:
“Under to current legislation, citizens cannot receive less than the subsistence level — and Sona's pension is clearly not up to this level.
Her son is able to go to employment centers. If there is no job available, the state is obliged to give him monthly financial assistance in the amount of the living wage. And not only to him, but also to his wife and son.”
Whether this will help them survive is another question.
“Under to current legislation, citizens cannot receive less than the subsistence level — and Sona's pension is clearly not up to this level.
Her son is able to go to employment centers. If there is no job available, the state is obliged to give him monthly financial assistance in the amount of the living wage. And not only to him, but also to his wife and son.”
Whether this will help them survive is another question.
More than half of Azerbaijan's population is at risk of poverty
Data from the State Statistics Committee of Azerbaijan regarding the standard of living also contradict each other. As mentioned above, the number of people living in absolute poverty is officially declared to be 5.9%.
However, the same State Statistics Committee conducted an official survey among 17,000 households in 2021. The populace was divided into ten categories based on income level. The lowest category includes 10% of families whose monthly per capita income did not exceed 171 manats [about $100]. The next group included those 10% at 210 manats [about $124] per capita.
The living wage then was 205 manats [about $121].
However, the same State Statistics Committee conducted an official survey among 17,000 households in 2021. The populace was divided into ten categories based on income level. The lowest category includes 10% of families whose monthly per capita income did not exceed 171 manats [about $100]. The next group included those 10% at 210 manats [about $124] per capita.
The living wage then was 205 manats [about $121].
Thus it appears that not 5.9%, but at least 20% of the population lives below the poverty line.
Approximately the same conclusions have been drawn by international organizations. According to a 2019 World Bank report, the poverty rate in Azerbaijan was 24%. The World Bank believes that in the capital Baku the poverty rate is 16%.
International experts say that 57% of the rural population in Azerbaijan lives at risk of poverty. In other words, although they are not currently considered poor, their livelihoods are so precarious that in the event of any upset, they would fall below the poverty line.
International experts say that 57% of the rural population in Azerbaijan lives at risk of poverty. In other words, although they are not currently considered poor, their livelihoods are so precarious that in the event of any upset, they would fall below the poverty line.
Author
Sevgi Ismailbayli
Photo/video
Gulandam Khadisova
Sevgi Ismailbayli
Photo/video
Gulandam Khadisova
ARMENIA
According to the Armenian Statistical Committee, 26.5% of the population of Armenia lived in poverty in 2021. This figure is close to those for the previous two years. At the same time, 1.5% were in extreme poverty, that is, having earnings below the subsistence level, which is 2.1 times higher than in 2020 at 0.7%.
How were these numbers calculated?
The living wage in Armenia is 57,744 drams ($140) per month. But, as in the case of other countries in the South Caucasus,indicators for those at subsistence level and those below it are so schematic that they probably do not reflect reality.
Experts dealing with the issue confirm that those who earn a little more than the cost of living do not fall into poverty statistics - although their life is no different from those who are there. And 45.7% of the poor population is extremely close to absolute poverty.
Armenia lives more in myths than reality, independent economists say. The authorities declare economic growth, higher wages and "record low" inflation. But the statistics tell a completely different story.
How were these numbers calculated?
The living wage in Armenia is 57,744 drams ($140) per month. But, as in the case of other countries in the South Caucasus,indicators for those at subsistence level and those below it are so schematic that they probably do not reflect reality.
Experts dealing with the issue confirm that those who earn a little more than the cost of living do not fall into poverty statistics - although their life is no different from those who are there. And 45.7% of the poor population is extremely close to absolute poverty.
Armenia lives more in myths than reality, independent economists say. The authorities declare economic growth, higher wages and "record low" inflation. But the statistics tell a completely different story.
The level of poverty is especially high in the regions.
The highest rate is in the Gegharkunik region, where 48.1% of the population is considered poor. The poverty rate in Yerevan is 15.9%.
How many poor people are there really in Armenia?
Margarita
40-year-old Margarita Sargsyan came home with shopping — bread, cheese, pasta in packages. She also has a surprise the kids — a carbonated beverage, which for this family is a luxury. There is not a single new item in the two-room rental apartment, but it is clean and tidy. Margarita raises her six children alone and works in two places for a total of seventeen hours a day. She earns 90,000 drams [$220]. She also receives a social benefit of 60,000 drams [$150] from the state.
New shoes and pants only for adults
“This amount should be enough for us to eat, dress, but I have to pay for a communal apartment, send children to school. I am lucky that my children are aware, understand the situation, never ask for something more than I can provide.
Sometimes I feel they get upset, especially about clothes, but they don't talk about it. They only joke that only adults get new shoes or pants. The younger are forced to wear hand-me-downs,” Margarita says.
In this house, meat is cooked at most once a week, and fruit comes from time to time. Margarita mostly buys cereals and bread products, cheap and filling.
Sometimes I feel they get upset, especially about clothes, but they don't talk about it. They only joke that only adults get new shoes or pants. The younger are forced to wear hand-me-downs,” Margarita says.
In this house, meat is cooked at most once a week, and fruit comes from time to time. Margarita mostly buys cereals and bread products, cheap and filling.
The minimum wage in Armenia was last raised in 2020 by about $20, equivalent in drams. But the authorities claim that life in the country has improved by 60-70%.
“If we compare how much the salary of one employee has increased, it turns out that now it is higher than five years ago, by about 60-70%. The real incomes of the population have increased significantly,” Minister of Economy Vahan Kerobyan says.
But even official statistics do not confirm this:
• In October 2017, the average salary in Armenia was 188,500 drams [$467].
• In 2021 - AMD 200,000 [$500].
• According to preliminary data for 2022 - 236,900 drams ($590).
That is, over the past five years the average monthly salary in Armenia has increased by 48,400 drams [$120],or by 25.7% and not by 70%.
• In 2021 - AMD 200,000 [$500].
• According to preliminary data for 2022 - 236,900 drams ($590).
That is, over the past five years the average monthly salary in Armenia has increased by 48,400 drams [$120],or by 25.7% and not by 70%.
Inflation overtakes wages
But even with this increase in the average salary in the country, the government may be wrong to consider it a plus. Given that inflation over the past five years reached 25.5%, a slightly rise in salaries does not affect the population’s quality of life much.
Record rise in food prices
In 2021 prices increased by an average of 13.9%
• Bread went up by 8.6%,
• Meat by 9.7%,
• Eggs by 51.3%,
• Butter by 15.9%,
• Sugar by 39.4%,
• Canned milk by 10.4%
In the first half of 2022 prices increased by an average of another 8.1%, the highest figure in the last ten years
• For food and non-alcoholic drinks - 17.1%,
• For clothes and shoes - 10.5%,
• Housing and communal services (water, electricity, gas) - 6.7%.
• Fruits and vegetables - 45.8% and 16.2% respectively.
Prices doubled in:
• Bakery products and cereals - 19.9%.
• Meat - 11.6%.
• Dairy products and eggs - 11%.
Aso in 2022, alcoholic beverages and tobacco products rose in price by 8.1%, and sugar by 6.9%.
• Bread went up by 8.6%,
• Meat by 9.7%,
• Eggs by 51.3%,
• Butter by 15.9%,
• Sugar by 39.4%,
• Canned milk by 10.4%
In the first half of 2022 prices increased by an average of another 8.1%, the highest figure in the last ten years
• For food and non-alcoholic drinks - 17.1%,
• For clothes and shoes - 10.5%,
• Housing and communal services (water, electricity, gas) - 6.7%.
• Fruits and vegetables - 45.8% and 16.2% respectively.
Prices doubled in:
• Bakery products and cereals - 19.9%.
• Meat - 11.6%.
• Dairy products and eggs - 11%.
Aso in 2022, alcoholic beverages and tobacco products rose in price by 8.1%, and sugar by 6.9%.
Despite the high level of inflation, there has been no significant increase in pensions and social benefits over the past year. They increased by an average of 1,000 drams [$2.5].
COMPARE:
In Armenia, 2021, the minimum food bill was 37,861 drams [$79].
The minimum consumer bill (food and services) was AMD 70,044 [$145].
The minimum social benefit was 18,000 drams [$37].
The minimum pension of 26,500 drams ($65) also does not reach subsistence even according to official calculations of the subsistence minimum.
COMPARE:
In Armenia, 2021, the minimum food bill was 37,861 drams [$79].
The minimum consumer bill (food and services) was AMD 70,044 [$145].
The minimum social benefit was 18,000 drams [$37].
The minimum pension of 26,500 drams ($65) also does not reach subsistence even according to official calculations of the subsistence minimum.
Nonetheless, the Armenian authorities announced double-digit economic growth in 2022, with the country's economic activity up 13.1% from the previous year.
But local independent economists suggest looking at this figure in more detail, and maintain this economic growth has no relation to quality of life.
Of that 13% of economic growth, 11.45 percentage points are trade and services, namely banking operations.
The growth was due to tens of thousands of migrants who came to Armenia with the start of the war in Ukraine. The remaining 1.55% of real economic growth is two times less than what the World Bank predicted for Armenia for 2022 at 3.5%.
Margarita
In Margarita's apartment, firewood is stacked by the stove. She bought it in summer with the money she had saved. The stove, left from the 1990s when there was an energy crisis in Armenia and no electricity, is heated twice a day — in the morning and evening, when everyone is at home. The windows are covered with cellophane to keep the heat in.
“It helps that the children go to daycare every day where it is warmer and there is food. On New Year’s we also have a dinner — chicken and potatoes, tangerines, juice. I would like more, of course. But it isn’t that way.”
“It helps that the children go to daycare every day where it is warmer and there is food. On New Year’s we also have a dinner — chicken and potatoes, tangerines, juice. I would like more, of course. But it isn’t that way.”
Author
Sona Martirosyan
Photo
Hakob Hovhannisyan
Video
Arman Karajyan
Sona Martirosyan
Photo
Hakob Hovhannisyan
Video
Arman Karajyan
