population base that is characterized by diversity and dis-parity both within and among countries. Sometimes thedifferences are so great and the circumstances so divergentthat questions must be raised about the extent to whichthese countries form a region and about what links themtogether. The answers lie in the common heritage embed-

ity and exposed women to a wide-open environmentwhere the conditions for equality are quite different, a ter-ritory rich with possibilities but not without risks. In someways, the transition process has cut into the employmentand social welfare gains of women – a regression oftenlinked to the sudden and significant shrinkage in the roleof the state. In the gap between the retreat of formerregimes and the development of democratic society, thereis room for concern that the commitment to women’s fullparticipation in society that is required from a broad coali-tion of actors may fail to materialize.

Nevertheless, this Report is presented in the spiritthat women have much to gain by the transition to marketeconomies and democratic governments – as individuals,as workers and mothers, as family and community mem-bers, as women in association, and as a political force. It isimportant to raise the alert about new risks to women thathave emerged in the transition, but it is equally importantto focus on the rewards of conquering these challenges.

This chapter provides an overview of the transitionand updates some of the trends described in previousRegional Monitoring Reports to highlight the larger eco-nomic, social and political context behind the changes inwomen’s lives. It is followed by five thematic chapters thatexplore women in the transition. These are related to thelabour market, family, health, violence against women,and participation in decision making.

In this chapter, Section 1.1 looks at the region froma human development perspective which weighs botheconomic and social welfare. Section 1.2 maps out theeconomic changes taking place in the region. Section 1.3explores social trends. Section 1.4 reviews commitmentsto women’s rights, the overarching theme of the Report.As with earlier Regional Monitoring Reports, attentionfocuses on changes that have taken place since 1989, thepre-transition benchmark used by these Reports.

■

In 1989, 154 million women, 135 million men and 122 mil-lion children were living in the part of the world now con-stituted by Central and Eastern Europe, the Baltic countriesand the Commonwealth of Independent States (CIS). Thetransition to market economies and democratic govern-ments in this region covers a huge geographical area and a

This Report is the sixth in the series of RegionalMonitoring Reports from the MONEE project of theUNICEF International Child Development Centre. Itfocuses on the rights of women and changes in their well-being since the collapse of communism in the 27 coun-tries of Central and Eastern Europe and the former SovietUnion. A better understanding of the status of women inthe context of the transition is crucial for advancinghuman development in the region.

Women are important as economic and social actorsand as agents of change. Women are vital participants inthe economy through paid and unpaid work and vital con-tributors to political life and individual endeavour. Theyplay a pivotal role in child welfare and a central role in fam-ily, social and community life – areas in which developmentis essential to the future of the countries in transition.

Under communism, the state became the mainsocial institution in these countries, marginalizing thefunction of the market, the family and other civic institu-tions. In so doing, it became the dominant arbiter andofficial enforcer of social norms and values, includingthose around gender equality. The communist stateespoused an egalitarian ideology and enshrined equalityrights in legislation, but its promise was unfulfilled in thedaily lives of women. With civil society weak and the fam-ily shut in against the state, there was little space forwomen’s equality to develop and grow from the grassroots.

There are some important areas where the status ofwomen was relatively enhanced under communism.These command economies promoted equal educationand high employment for women, as well as generous andcomprehensive childcare and maternal health services.This investment in women was probably motivated moreby economic necessity than by social justice, but the out-come was a concrete advancement for women.

The economic, social and political transition in theregion has shattered the state monopoly on gender equal-

1 The Transition,Children and Women 1

1.1 The Region in a Human Development Perspective

The Human Development Index was first introduced inthe 1990 Human Development Report. Its purpose wasto give a broader measure of the well-being of a nationthan simply GDP. The HDI is designed to reflect threefundamental aspects of human welfare: standard of liv-ing, health and education. Currently, the index uses thefollowing indicators to capture these elements ofhuman development: purchasing power adjusted to percapita income, life expectancy at birth, and a combina-tion of literacy figures and education enrolment. A coun-try’s scores for each variable are standardized on ascale from 0 to 1. The composite index, which isintended to reflect the country’s overall developmentlevel, is calculated as a simple arithmetic average of thethree scores.

The HDI is both admired and criticized. It has hada great impact on the way people think about devel-opment, breaking the exclusive hold of income-basedindicators of welfare. However, critics maintain that theindex measures are so basic they may miss what theystrive to measure. For example, long life expectancy

does not necessarily mean people are healthy; schoolenrolment shows the opportunity to learn, not neces-sarily the level or quality of knowledge attained, andpersonal income is not the only factor in the standardof living. Critics question whether the simple averagingof the components is adequate and have raised theissue of the correlation among the factors and whetherthe transformation of indicators into scores is correct.Finally, the picture drawn by the HDI refers only tonational averages and does not reflect inequalitybetween groups in society, such as women and men.

In response, the HDI has been refined, and com-panion indicators developed, such as the income-dis-tribution-adjusted index, the human poverty index, thegender empowerment measure, and the gender-relateddevelopment index (GDI). Introduced in the 1995Human Development Report, the GDI has the samethree elements as the HDI, each adjusted for genderinequality. The greater the inequality between womenand men, the lower the GDI compared to the HDI. (Seethe Glossary for details on the GDI.)

Box 1.1

Measuring development

ded in the institutions and structures during the shared his-tory of the past several decades and in the goals set for thetransition. This introductory section maps the overall

development level of the region using aggregate statisticalmeasures that embrace the main aspects of development.

Human development rankings

The Human Development Index (HDI) of the UNDP wascreated to measure human progress in more than narroweconomic terms. As Box 1.1 describes, the HDI providesa broader measure of development by combining anincome indicator (per capita GDP expressed in purchas-ing-power parities) with two “human capability” measures(a health and an education index).

The 27 countries of the transition region, groupedin the seven sub-regions conventionally used by theMONEE project, are introduced below. Figure 1.1 showsthe 1995 development rankings for 25 of the countries inan international field of 174 nations, as published in the1998 Human Development Report. The black HDI columnrepresents the distance each country falls behind the top-ranked country, that is, the longer the column, the lowerthe standing. The transition countries run from Sloveniaat 37th to Tajikistan at 118th, with development stand-ings generally decreasing from west to east. This pictureconfirms the considerable disparity among the seven sub-regions and, at times, also within these sub-regions.

The Central European countries of the CzechRepublic, Slovakia, Hungary, and Poland ranked highestamong the transition countries, belonging to the UNDP’s“high human development” group of nations. However,their nearest neighbours there were the more well offcountries of Latin America rather than the countries ofthe European Union. The Czech Republic and Slovakia

I. THE TRANSITION, CHILDREN AND WOMEN

2

Czech RepublicSlovakia

PolandHungary

SloveniaCroatia

FYR Macedonia

Albania

Bulgaria

Romania

Estonia

Latvia

Lithuania

Belarus

Moldova

Russia

Ukraine

Armenia

Azerbaijan

Georgia

Kazakhstan

KyrgyzstanTurkmenistan

Uzbekistan

Tajikistan

0 20 40 60 80 100 120 140 160 180

Human development indexGender development indexGDP

Developmentranking

of transitioncountries, 1995

Sources: UNDP(1998a);

direct communicationwith UNDP.

Figure 1.1

Note: See Box 1.1. GDP is per capita and adjusted using purchasing power parities. The index classi-fies the world’s countries from the best (rank 1) to the worst (rank 174). No figures are available forBosnia-Herzegovina and FR Yugoslavia.

3ranked 39th and 42nd, close to Argentina, Uruguay andPanama; Hungary was 47th, between Venezuela andMexico, while Poland was 52nd, just before Colombia.

The HDI rankings underline the staggering dispari-ties among the countries that have emerged from the vio-lent breakup of the former Yugoslavia. (Only three ofthese countries were covered by the UNDP report.)Slovenia, at 37th, ranked best among all the transitioncountries, but the Former Yugoslav Republic ofMacedonia fell into 80th place. Croatia’s ranking alsoreflects the impact of the 1992-95 civil war. There is noHDI score for Bosnia-Herzegovina, as the civil war therewas just ending. Similarly, 1995 data were unavailable forthe Federal Republic of Yugoslavia (Serbia andMontenegro), which was under the constraints of aninternational embargo. Available social and economicindicators suggest that the ex-Yugoslav countries – withthe exception of Slovenia – would have fallen into themedium human-development group in 1995.

In Southeastern Europe, Albania was extremely iso-lated before the transition. In 1995 it had the poorestdevelopment ranking in Eastern Europe at 105th, a scoresimilar to that of China or Egypt. Neighbouring Bulgaria,at 67th, and Romania, at 74th, fell into the mediumhuman-development cluster of nations.

The countries of Estonia, Latvia and Lithuaniaranked poorly, which was surprising given that the Balticsub-region was a highly developed area within the SovietUnion before the transition.

In the western CIS, Russia and Belarus fared rela-tively well (ranking close to Bulgaria and Romania, or,outside the region, Brazil, Ecuador and Turkey). Ukraineand Moldova, the other two western CIS countries,ranked closer to countries of the Caucasus and CentralAsia. Uzbekistan, the most populous country in theCentral Asia sub-region, was close to the area average at104th. Kazakhstan, which is regarded in this Report as aCentral Asian country, had a better ranking than theother four. Tajikistan, with the lowest standing in theregion at 118th, ranked lower than Mongolia or China,but still considerably higher than Pakistan or India.

As mentioned, the HDI ranking contains measuresfor both economic and social development. It is enlight-ening to analyse the international rankings of the transi-tion countries further with these components in mind.

Comparing economic and social development

In Figure 1.1, the black dots show the rankings the countrieswould have if only the economic component of the HDIindicator were considered. Ranking the 25 transition coun-tries by GDP per capita in comparative prices would push allcountries lower in the rankings. Hungary, for example, woulddrop six places, Bulgaria eight, Ukraine 16, Azerbaijan about30, and Tajikistan 43. This suggests the transition countriesenjoy a comparative advantage in the development of

human capabilities, such as health and education – a patternwith important implications for child development. Thedownward shift might also suggest the transition countriessuffer a systematic disadvantage in their economic develop-ment compared to countries outside the region.

Figure 1.1 also presents the country rankings using agender-related development index (GDI), a refinedhuman development indicator that considers gender dis-parities in earned income, life expectancy and schooling(Box 1.1). Based on the GDI, as the blue columns illus-trate, all the transition countries move up 10-15 placesover their HDI ranking. By this measure, Slovenia and theCzech Republic overtake Portugal and approach Italy andIreland; Hungary and Poland overtake Argentina andcome close to Uruguay. This indicates that the countriesin the region enjoy a systematic gender equality advantagerelative to other countries. It also demonstrates that thefirst five years of the transition – whatever hard times theremay have been – did not eliminate this comparative edge.

Two important qualifications must be added. On theone hand, a wider set of statistics suggests the HDI rank-ings underestimate the development levels of the transi-tion countries in certain regards. For example, UNICEF’sState of the World’s Children ranked the countries of theregion relatively higher – Slovenia 16th (1995 HDI, 37th),Croatia 32nd, Poland 36th, Russia 57th, and Uzbekistan89th (HDI, 104th). The basis of the UNICEF ranking isthe under-5 mortality rate. This effective indicator of childwelfare also reflects the health and education of the motherand is a good proxy for access to basic social services.

Other evidence confirms the systematic social-development advantage indicated by the GDI andUNICEF rankings. The share of the urban population inCentral and Eastern Europe is similar to that in LatinAmerica, but access to water, sanitation and health ser-vices is considerably better in the post-communist region.Central European countries spend relatively the same onhealth care or education as the OECD countries; CIScountries tend to spend less, but have no fewer teachers,physicians, or hospital beds per capita. In the CentralAsian countries of Tajikistan and Turkmenistan, thephysicians-to-population ratios were comparable to thoseof Switzerland and the United States in the early 1990s.

On the other hand, more in-depth investigationsand refined measurements reveal that the crude indicatorsof access to services often seriously overestimate the valueof the services provided. Evidence for this comes in vari-ous forms. For example, the 1994 Adult Literacy Surveyof 12 industrialized countries, including Poland, from thetransition region revealed weak performance in functionalliteracy. Of Poles surveyed, 75 percent scored in the low-est two levels for the ability to locate and use informationin documents, compared to 35-45 percent of persons inthe Netherlands and Germany.

In other countries, reassessments of immunizationrecords of children have revealed discrepancies in public

THE MONEE PROJECT - No. 6 / 1999

health services. In Kyrgyzstan, Turkmenistan andUzbekistan, the share of valid immunizations – those car-ried out within the proper time intervals – is considerablylower than official immunization data imply. These find-ings suggest that the actual value of the capabilities-basedwelfare indicators for the countries may be generally lowerthan believed. Nonetheless, they do not necessarilyimpugn the HDI rankings of the countries. The HDIscores placed the region in a developing country environ-ment in the mid-1990s. While there are few available in-depth comparisons between this region and LatinAmerica or Asia, it is likely that countries in those regionsalso have problems with the effectiveness of services.

In any case, there does appear to be a greater gap in

the transition region between the efforts and resources putinto social development and the results achieved. Policiesand delivery systems inherited from the past are provingineffective in the new circumstances associated with tran-sition. This points to the need for serious reforms in thesocial sectors, or the transition countries risk losing theircurrent comparative advantages in gender developmentand child welfare. Unfortunately, the situation since 1989has not been very encouraging.

The large deterioration in many welfare indicatorsnoted by earlier Regional Monitoring Reports is reflectedin the changes in the HDI rankings of the transition coun-tries between 1990 and 1995. In 1990, Czechoslovakiaranked 26th, Hungary 28th, Armenia 47th, Poland 48th,

I. THE TRANSITION, CHILDREN AND WOMEN

4

The 1995 Human Development Report, devoted to theissue of gender equality, stated that the objective ofdevelopment is to enlarge people’s choices. This involvesequality of opportunity for all people in society, sustain-ability of such opportunities from one generation to thenext, and the empowerment of people so they can par-ticipate in and benefit from development. The promotionand protection of human rights, including equal rights forwomen, are primary instruments for realizing these goals.

The historical roots of a rights-based approach todevelopment are found in the aftermath of the SecondWorld War. The 1948 Universal Declaration of HumanRights was a political response to the horrors of thatwar. It recognizes that all people, regardless of gender,race, language, or religion, are entitled to participate insociety with rights and dignity, and it embraces a visionof global human values endorsed by the entire interna-tional community. At the same time, institutions like theInternational Monetary Fund and the World Bank wereestablished to plan against the kind of economic dis-aster that had precipitated the war and to focus on alle-viating poverty through economic growth. From thesebeginnings, a sophisticated appreciation of the complexinter-relationships among political, economic and socialrights and conditions has evolved around the consen-sus that addressing the root causes of developmentproblems is essential.

One of the most important advances has been therecognition that de jure equality – equality in the law –does not automatically deliver de facto equality. Despitelegal guarantees, structural barriers and systemic dis-crimination continue to exclude women and other tradi-tionally disadvantaged groups from equal opportunities.A rights-based approach to development calls for sub-stantive equality. This approach recognizes that specialmeasures which promote positive discrimination may benecessary to overcome long-standing barriers. It alsoholds that like-treatment may perpetuate inequalities,so the goal is equal outcomes rather than identical treat-ment of women and men. This approach strives toensure that equality and inclusion are built into thedesign and implementation of services, supports, fund-

ing allocations, programmes, policies, and laws.As instruments of international commitment, the

1979 Convention on the Elimination of All Forms ofDiscrimination against Women (CEDAW) and the 1989Convention on the Rights of the Child have moved for-ward from simply declaring rights to identifying issuesthat need to be addressed and the measures that needto be taken to realize these rights. The Platform for Actionof the 1995 Fourth World Conference on Women identi-fies a set of steps to fulfil the provisions of CEDAW anddedicates a chapter to the rights of the girl child.Discrimination against women and girls in the allocationof economic and social resources is recognized as a directviolation of economic, social, political, and cultural rights.

Established in 1976, the UN Development Fund forWomen (UNIFEM) has integrated a rights-based frameworkinto its efforts to promote women’s empowerment andgender equality. UNIFEM is dedicated to building strongerwomen’s organizations and networks and, in recent years,has focused on how women can use CEDAW and the 1995Platform for Action to advance their positions.

CEDAW, the Platform of Action and the Conventionon the Rights of the Child have shaped UNICEF’s 1996Mission Statement “to work on the rights of children ingeneral, the rights of girls in particular, as well as therights of women and the promotion of gender equalityat all stages of the life cycle”. UNICEF has arrived at arights-based approach to development through decadesof practical work on the ground. In the 1960s-70s,UNICEF learned the effectiveness of targeting support towomen in order to reach children. This women-and-development approach focused on women as agents ofchild welfare. In the 1980s, UNICEF recognized that tac-tical actions were often ineffective and inefficient with-out broader political and economic support. In the early1990s, framed by the World Summit for Children,UNICEF explicitly shifted to a rights-based “gender-in-development” philosophy. This approach holds thatmeeting the human rights of women and children isessential for development to occur and that gender dis-crimination often impairs the ability of women and chil-dren to exercise their rights.

Box 1.2

The United Nations and a rights-based approach to development

Yugoslavia (with the exception of Slovenia) and in theBaltic and CIS countries (with the exception ofUzbekistan). In Central Europe, Slovenia and Romania,economies contracted by 15-25 percent. Output fell by35-45 percent in the rest of the Balkans and by almost 60percent in FR Yugoslavia. There were no data availablefor war-torn Bosnia-Herzegovina.

The blue columns in Figure 1.2 indicate the currentstatus of economic recovery, that is, how much the 1998GDP falls short of or exceeds the 1989 level. (TheEuropean Bank for Reconstruction and Development,EBRD, estimated the 1998 figures.) It is clear that mostcountries have rebounded, but still fall short of 1989 levels.

Only Poland and Slovenia have increased the size oftheir economies; Slovakia has only just recovered, whileboth the Czech Republic and Hungary are slightly belowthe 1989 levels. The economies of Central Europe bot-tomed out around 1992-93, and of the Baltics and most

absolute deterioration not only in economic, but also inhealth and education indicators in the region, mainly butnot exclusively in the former Soviet Union.

The transition countries face the challenge ofadvancing a balanced and integrated agenda of economicand social development that will bring the desired pros-perity and well-being to the region. There are many dif-ferences and disparities across the region, but this impor-tant political challenge is common to all countries. Thecomparative advantage the countries enjoy with the gen-der and children’s indices provides a good foundation fora human rights-based approach to development – anapproach increasingly undertaken by international orga-nizations (Box 1.2) and among the advanced countries indifferent parts of the world. Rights-based developmentaims to promote the growing equality of opportunityamong people and nations.

■

Changes in the economyhave been high on the reformagenda of the region –macro-economic stabiliza-tion, development of themarket and integration intothe main economic institu-tions of the world. Thisthrust is welcome from theperspective of the rights andwell-being of women andtheir families. Economic out-put and entrepreneurial free-dom are essential for meetingdevelopment needs andenlarging people’s choices.The international comparison in the previous sectionillustrates that the transition countries are relatively weakin the economic dimension of human development.However, it is important to note that, since 1995, thereturns of economic reforms have become more apparent.

Uneven recovery in outputs

The cumulative changes in real GDP during the transi-tion period are shown in Figure 1.2 using official data onmeasured output for 26 of the 27 countries. The figureillustrates both the large falls that took place after 1989and the current status of economic recovery in the region.

The large black dots below the horizontal axis in thediagram show the maximum extent of the contraction ofthese economies since 1989. It is clear that all the coun-tries portrayed underwent a considerable regression ineconomic output. The biggest drops occurred in former

Bulgaria 40th, Kazakhstan 54th, and Tajikistan 88th. Thecomparison over time is not straightforward: it is affectedby the higher number of countries included, changes incalculating methods, and weaknesses in GDP estimatesfor the initial transition period. Nonetheless, the changein HDI rankings from 1990 to 1995 is often staggering, forexample Russia falling from 37th to 66th place.

The main reason for the downshift in developmentin the region in 1990-95 was the fall in economic output.The inefficient, non-market production system inheritedfrom the communist past simply could not meet the needsof the emerging marketplace. The result was a pro-nounced devaluation of national outputs on the worldmarket. The relative HDI rankings of the transition coun-tries also fell because indicators measuring human capa-bility have been tending to drop in the region during the1990s, while countries in other parts of the world are mak-ing progress. As later sections highlight, there has been an

THE MONEE PROJECT - No. 6 / 1999

5

1.2 Changes in the Economy

1998

Lowest level during transition

-80

-70

-60

-50

-40

-30

-20

-10

0

10

20

Czech Re

public

Slova

kia

Polan

d

Hung

ary

Slove

nia

Croa

tia

FYR Ma

cedo

nia

FR Yu

gosla

via

Alba

nia

Bulga

ria

Roma

nia

Estonia

Latvia

Lithu

ania

Belar

us

Moldov

a

Russia

Ukraine

Arme

nia

Azerba

ijan

Georgia

Kazakh

stan

Kyrgyzsta

n

Tajik

istan

Turkme

nistan

Uzbe

kistan

GDP in 1998and at itslowest levelduringtransition(1989=100)Source: StatisticalAnnex, Table 10.1.

Figure 1.2

CIS countries around 1994-95. In contrast, the economiesof Ukraine and Moldova are still on a downward slide, andRussia was hit with a new economic crisis in 1998. It isunclear how the violent events in the Balkans thaterupted in spring 1999 and that have taken a heavyhuman toll are going to set back the economic situationin FR Yugoslavia and neighbouring countries.

The GDP figures presented in Figure 1.2 may wellunderestimate the real size of the economies in the region,given the substantial growth of the informal economy, asBox 1.3 discusses. Still, it is clear GDP fell substantiallyacross the region during transition. Moreover, the growth ofthe informal sector does not necessarily have positive effectson human development and welfare. For example, lawfulemployment provides access to social security entitlements,limits on working hours, and safety and other protective reg-ulations. Moreover, the growth of the informal sector is oftenassociated with illegal activities, including organized crime.

Structural changes and reforms

Changes in economic output levels across the region havebeen accompanied by major structural shifts. In CentralEurope, Slovenia, Croatia, and the Baltic States small-scale private enterprises in the service sector have playedan important role in the recovery. Large-scale privatiza-tion of state enterprises has also moved the transition for-ward. In some cases, most prominently in Hungary, thisprogress has been driven by substantial direct foreigninvestment. (See Statistical Annex, Table 10.4.)

In Albania, Armenia, Georgia, and Kyrgyzstan, agri-culture, mostly family farms, has helped spur economicrenewal. Indeed, agriculture is once again more importantto the economy than industry as many large state-ownedfactories are paralysed or shut down. In Georgia, for exam-ple, agriculture accounted for 28 percent of GDP in 1997,compared to 15 percent for industry and construction and22 percent for trade. In Albania, Armenia and Kyrgyzstan,agriculture now makes up one-third or more of the econ-omy (Statistical Annex, Table 10.3).

In the other half of the region, the direction of thechange is less clear. In some countries, such as Russia,Azerbaijan, Kazakhstan, and Turkmenistan, the hugeenergy and mining industries built up to serve a biggereconomy now target export markets. However, inade-quate infrastructure and transportation are a problem,especially in the last three countries, but anticipated for-eign investment could ease that difficulty. Some CIScountries, like Belarus, continue to draw on Russianenergy and raw materials. Others, like Uzbekistan, havepursued a gradualist reform strategy, building upon theindustrial and agricultural capacity inherited from Soviettimes. These strategies have helped offset the fall in eco-nomic output in the short term, but their potential forlong-term economic growth remains uncertain.

In Russia, the export of energy and mineral resourcesmay have softened the economic shocks of transition, butit has also contributed to delays in tax reform and enter-prise restructuring. Corporate taxes, cross subsidiesthrough low energy prices, the delayed payment of energybills, and credit operations have all helped sustain produc-tion and consumption levels. This consolidation strategycollapsed in 1998, following the sharp fall in oil prices onthe world market and a more cautious environment ininternational lending sparked by wildfire recession in EastAsia. Earlier projections on economic growth for Russiahave been adjusted downward, raising fears of a prolongedeconomic recession that may destabilize the region.

Figure 1.4 illustrates the level of reform achieved inthe region. The figure shows the estimated share of theprivate sector in GDP, as well as a score which is a com-posite average of indicators that have been developed bythe EBRD to measure economic transition. (A scoregreater than 4 indicates full marketization.) The chartconfirms the link between private-sector developmentand market-oriented reforms. It also shows that manycountries still lag considerably. Nevertheless, there aresome areas – like trade and the privatization of smallerenterprises and ventures – where most countries had madeimportant progress by 1998.

I. THE TRANSITION, CHILDREN AND WOMEN

6

One prominent feature of the transition economies hasbeen the growth of the informal sector and its associ-

ated labour markets. Figure 1.3 reports the estimatedsize of the informal sector in a selection of transitioneconomies based on energy usage, which has notdecreased in line with reported economic output.(Reduced energy efficiency may also play a role inenergy-use figures in countries with abundant nuclearpower, like Ukraine and Russia, or in oil-rich Azerbaijan.)The growth of the informal sector appears to be mostpronounced in Russia, Ukraine and some other coun-tries of the former Soviet Union. It is a worldwide expe-rience that this “grey” activity grows in response topunitive tax systems and costly and sometimes corruptbureaucratic procedures.

Box 1.3

Estimates of the size of the informal economy in the transition region

6

2820

14

24

13 1115 16

2217

1111

29

1319

3035

22

4249

61

34

7

19901995

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30

40

50

60

Czech Re

public

Polan

d

Hung

ary

Slove

nia

FR Yu

gosla

via

Latvia

Lithu

ania

Russia

Ukraine

Azerba

ijan

Kazakh

stan

Uzbe

kistan

Estimated sizeof the informal

sector, 1990and 1995(percent of GDP)

Source: Johnson,Kaufman and

Schleifer (1997).

Figure 1.3

remained stable in Azerbaijan, and increased inTurkmenistan and Uzbekistan. Some countries, notably inthe western CIS, the Caucasus and Central Asia, haveendeavoured to protect employment levels in the face ofplunging GDP. Workers accept even low-paying jobs orperiodic employment because these offer them access tosocial security, employee benefits and social ties.

The emergence of significant unemployment is arelatively new phenomenon in the region after decades ofcentral planning and policies of full employment. Thenumber of registered unemployed grew from about onemillion in 1989 (found mostly in the southern states ofcommunist Yugoslavia) to eight or nine million by 1993-94 following the first waves of economic reforms. Three-

Large gaps in employment and wages

People mainly experience the impact ofeconomic reform as a change in paidemployment and in what wages can buy.Falls in economic output across the regionhave also entailed large drops in realwages and pressure on employers to reducetheir workforces. These effects have beenamplified by the need to improve labourproductivity and to reduce the over-staffing and labour hoarding common inthe former planned economies. This sug-gests that, even when GDP recovers,employment levels and real wages maynot, as illustrated in Box 1.4.

Big losses in real wages were, moreover, accompaniedby considerable increases in measured wage differentials inall countries for which data were available. (See StatisticalAnnex, Tables 10.8 and 10.12.) The Gini coefficient, acommon measure of the extent of inequality, rose on aver-age by one-third in Central and Southeastern Europe andby one-half in the former Soviet Union (where some coun-tries, such as Russia, had a high degree of earnings dispar-ity by OECD standards before transition).

Overall, the number of jobs lost in the region since1989 has been estimated at 26 million – 13 percent of theinitial level. As Figure 1.6 shows, employment hasdeclined in 23 countries of the region during the 1990s,

THE MONEE PROJECT - No. 6 / 1999

7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0Private-sector share of GDP (percent, left scale)EBRD transition index (right scale)

0

10

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Czech Re

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tvia

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ijan

Georgia

Kazakh

stan

Kyrgyzsta

n

Tajik

istan

Turkme

nistan

Uzbe

kistan Progress in

economictransition,1998Source: EBRD (1998),Table 2.1.

Figure 1.4

There are two distinctive patterns of change in the regionrelated to GDP, employment and real wages. Hungaryrepresents the trend in Central Europe and some othercountries where the drop in economic output has beenrelatively moderate and a steady recovery has beenunder way for some time. In Hungary, GDP has almostrecovered, but less so real wages, and not so jobs. Thenumber of jobs in 1997 was 71 percent of that in 1989,and these jobs paid a per-earner wage worth 23 percentless in real terms. Higher labour productivity – reflectedin the widening gap between Hungarian GDP andemployment in Figure 1.5 – has improvedthe prospects for economic growth, butthe price has been two-digit unemploy-ment rates since 1992. The data suggestthat economic recovery has been moreeffective in raising wages than in creatingnew jobs. Hungary, like some other coun-tries leading in economic reform, facesproblems associated with high unemploy-ment, such as growing social exclusion.

In Azerbaijan, the pattern is charac-teristic of countries, mostly the CIS, where

declines in GDP were so abrupt and large that a similar,or bigger, cut in employment was politically untenable(and often demographic factors also put pressure onemployment). So, Azerbaijan shows a huge fall in GDPand in real wages that bottomed out in 1995 and hasrecovered only slightly since. Meanwhile, employmenthas remained constant, which means labour productivityper employee has crashed. The result is much less overtunemployment, but much lower real wages (see the dot-ted line in the graph) and a big rise in the number ofworking poor.

Box 1.4

Two patterns of change in GDP, employment and wages

Hungary

GDPEmploymentReal wages

Azerbaijan

0

20

40

60

80

100

120

0

20

40

60

80

100

120

1989199

0199

1199

2199

3199

4199

5199

6 1997

1989199

0199

1199

2199

3199

4199

5199

6 1997

Change in GDP,employmentand wages inHungary andAzerbaijan,1989-97(1989=100)Source: StatisticalAnnex, Tables 10.1,10.8, 10.9.

Figure 1.5

Note: Employment refers to the total number of persons employed. Wages refers to real wages.

Note: The values of the transition index are MONEE project calculations and are unweighted averages of the EBRD scores on eight dif-ferent dimensions of the transition (for example, privatization, enterprise restructuring, price liberalization, and banking reform).

I. THE TRANSITION, CHILDREN AND WOMEN

8quarters of these people were registered in Central Europeand in the Balkans. Currently, the number of registeredunemployed is estimated at more than 10 million acrossthe 27 countries of the region, about six million of whomare women. The ratio of women among the registeredunemployed is around 50 percent in Central and EasternEurope and exceeds 60 percent in Ukraine, Belarus,Russia, Armenia, and Kazakhstan.

Although unemployment has stabilized or increasedat a slower pace in recent years, employment prospectshave generally remained dim. Further macro-economicadjustments, enterprise restructuring and other changesmeant that more people were driven out of jobs in theCzech Republic and Slovakia in 1997. That same year,GDP fell by 7 percent in Albania following financialfrauds and civic strife, and Romania saw a similar drop inoutput associated with efforts to speed up reforms. InBulgaria in 1996-97, real wages fell by one-third, and reg-istered unemployment rose from 11 to 14 percent. In FRYugoslavia, one-quarter of the workforce was registered asunemployed in 1997, and about two-fifths in Bosnia-Herzegovina and FYR Macedonia.

Employment has declined relatively slowly but

steadily in Russia, with no signs of stabilizing or recovering.The number of jobs shrank by 14 percent between 1989and 1997. The registered unemployment rate is still low,around 3 percent. Official estimates, using internationalstandards, put the actual rate at more than 9 percent in1997. Unregistered unemployment is common across theCIS, where labour market institutions are weak or lacking.

The evidence suggests, therefore, that most countriesare still having difficultiesimproving labour productiv-ity without aggravatingmacro-economic and socialproblems. In 1997, registeredunemployment increased in13 of the 24 countries forwhich recent data were avail-able, and in six countries thisfollowed temporary improve-ments. (See StatisticalAnnex, Table 10.10.)

The example of thecountries leading in eco-nomic reform in the regionshows that stimulating thegrowth of small- and

medium-sized enterprises is strategically important toimproving productivity and reducing unemployment. Byproviding an alternative to big companies, it also helpstackle the political and economic gridlock occurring atthe level of large institutional employers. Studies haveshown that self-employment and small ventures haveplayed an important role in cushioning the welfare impactof enterprise restructuring in Poland. In Hungary, thegrowth of micro-enterprises employing less than 10 per-sons, often family businesses, is seen as key to a sharpincrease in labour productivity. In 1995, the small-enter-prise sector provided 44 percent of GDP and employedabout one-third of the workforce. In contrast, the small-enterprise sector accounts for about 10 percent of employ-ment in Russia, and in several CIS countries even less.

Declines in governmentrevenues

One of the biggest and mostimportant challenges facingthe countries in transition isto be able to collect enoughtaxes to meet essential pub-lic spending requirementsand so avoid growing fiscaldeficits. The social upheavalassociated with the transi-tion process in many coun-tries has put governmentsunder enormous pressure to

Czech Re

public

Slova

kia

Polan

d

Hung

ary

Slove

nia

Croa

tia

FYR Ma

cedo

nia

FR Yu

gosla

via

Alba

nia

Bulga

ria

Roma

nia

Estonia

Latvia

Lithu

ania

Belar

us

Moldov

aRu

ssia

Ukraine

Arme

nia

Azerba

ijan

Georgia

Kazakh

stan

Kyrgyzsta

n

Tajik

istan

Turkme

nistan

Uzbe

kistan

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

Change intotal numberof employed

persons,1989-97(percent)

Source: StatisticalAnnex, Table 10.9.

Figure 1.6

RevenuesExpenditures

0

5

10

15

20

25

30

35

40

45

50

55

Czech Re

public

Slova

kia

Polan

d

Hung

ary

Slove

nia

Croa

tia

FYR Ma

cedo

nia

Bosn

ia-He

rzego

vina

Alba

nia

Bulga

ria

Roma

nia

Estonia

Latvia

Lithu

ania

Belar

us

Moldov

a

Russia

Ukraine

Arme

nia

Azerba

ijan

Georgia

Kazakh

stan

Kyrgyzsta

n

Tajik

istan

Turkme

nistan

Uzbe

kistan

Generalgovernment

revenues andexpenditures

in 1997(percent of GDP)

Source: EBRD (1998).

Figure 1.7

Note: The later year is 1996 for the Czech Republic, Slovakia and Romania.

Note: Revenues are MONEE project calculations based on general government balance and expenditures. For definitions of general government balance andexpenditure, see notes to Statistical Annex, Tables 10.5, 10.6.

THE MONEE PROJECT - No. 6 / 1999

9keep expenditures at a level that will prevent widespreadpoverty and preserve social order and cohesion. However,at the same time, the combination of severe recession anddeeply flawed tax systems has led to a large decline in gov-ernment revenues. The result has been persistent fiscalimbalances in most countries of the region. Estimates for1997 (see Statistical Annex, Table 10.5) showed that,with few exceptions, governments in transition countrieswere running budget deficits and that, in many cases, thedeficits were large relative to the size of the economy.

Since one of the purposes of the transition is to reducethe pervasive role of the state, a decline in government rev-enues and spending (as a percentage of GDP) is not neces-sarily a bad thing. However, in a number of countries, thedecline in government revenues has been so large, it hasimpaired the functioning of vital state institutions and madethe reform of institutional arrangements extremely difficult.Figure 1.7 shows government revenues and expendituresexpressed as a percentage of GDP for each country.

The unweighted average of the ratio of revenues toGDP in 1997 was less than 30 percent in the CIS coun-tries. It was close to 40 percent in Central and EasternEuropean countries. While the general pattern of a closeassociation between low revenues and high fiscal deficitsis apparent, there are exceptions. Russia and Moldova, forexample, collect a relatively high share of revenues, buttheir deficits are among the highest in the region becausetheir expenditure levels are closer to those of CentralEurope rather than other CIS countries. Here, as in anumber of countries, the decline in expenditures has beenbrought about by artificial means, including arrears inpublic-sector payments, wages and pensions. Persistentfiscal imbalances associated with insufficient revenue col-lection jeopardize macro-economic stability and outputrecovery, as the recent crisis in Russia illustrates. Box 1.5focuses on some of the underlying causes of weak govern-ment-revenue performance, particularly in many CIScountries.

The structure of government revenues shows character-istic differences between countries in Central and EasternEurope and those of the CIS. These differences helpexplain lower revenue collection in the CIS. Overall, asFigure 1.8 illustrates, taxation has shifted away from thecorporate sector, but this shift has been far less pro-nounced in the CIS. In Central and Eastern Europe, thecombined share of enterprise-profit taxes and domestictaxes on goods and services fell from 62 percent of taxrevenue in 1989 to 41 percent in 1997. Moreover, with theexception of Albania, personal income taxes have notdeclined as a share of GDP, and the decline in indirectdomestic taxes, like the value-added tax, has been mar-ginal. Hence, almost the entire drop in tax revenues rep-resents a fall in tax revenues on corporate profits.

For a variety of reasons, the CIS continues toexhibit a much greater reliance on the corporate sector.Countries slow to reform, such as Belarus, Turkmenistanand Ukraine, still raised over 6 percent of GDP in 1997from corporate income taxes, compared to an average ofless than 3 percent in advanced tran-sition countries. In the context of thelow income-generating capacity ofstate-owned enterprises, the failureto shift the tax base away from thecorporate sector has contributed tothe decline in revenues.

There is no easy solution to theproblem of tax collection in transitioneconomies, but there are two signifi-cant areas where changes can bringsubstantive progress. First, the taxsystems of the transition economies,particularly in the CIS, can reducetheir reliance on corporate taxationand put more emphasis on personal

income and expenditure-based taxes. These taxes need tobe carefully designed to mitigate against any negativeimpact on consumer demand and low-income households.A simple broad-based tax structure with reasonable ratesis particularly important for the success of small busi-nesses and entrepreneurs who do not have the resourcesto manipulate complex tax structures to their advantage.

Second, changes in the structure of the tax systemmust go hand in hand with more transparent tax admin-istration. In many countries, the definition of the tax baseis problematic. Taxes are prone to being changed arbi-trarily on short notice and are sometimes applied retroac-tively. This capricious environment encourages the own-ers and managers of firms to find ways to avoid payingtaxes. Research has shown the strong correlationbetween distortional tax systems with excessive regula-tions and the size of the unofficial economy. Simply put,companies and individuals are more willing to pay taxes,and hence revenue will be higher, if the tax system isseen as simple, transparent and fair.

Box 1.5

Tax collection and reforms

Corporatetaxes

Socialsecuritytaxes

Internationaltradetaxes

Domestictaxes

Individualtaxes2

468

101214

0

Corporatetaxes

Socialsecuritytaxes

Internationaltradetaxes

Domestictaxes

Individualtaxes2

468

101214

0

19891996/97

19891996/97

Commonwealth of Independent StatesCentral and Eastern Europe and the Baltics

Structure ofgovernmentrevenues in1989 and1996/97(percent ofGDP)Source: EBRD (1998),page 59.

Figure 1.8

Note: Central and Eastern Europe excludes Albania and Bosnia-Herzegovina. CIS excludes Belarus and Uzbekistan. The initial year is 1990 forHungary and 1991 for Armenia, Azerbaijan, Estonia, Georgia, FYR Macedonia, Moldova, Latvia, Slovenia, and Ukraine. Data for Russia for 1989refer to the USSR and in the case of the Czech Republic and Slovakia to former Czechoslovakia.

Social issues have generally received less attention thaneconomic problems during the transition. The timetablefor reform and the associated social costs have generallybeen underestimated. Social systems that delivered posi-tive benefits in the past have turned out to be inefficientor difficult to sustain under the new conditions. Reducedrevenues have paralysed rather than inspired governmentsto carry out social reforms. Considering the inheritance ofthe past, there is a tremendous amount of work to be doneto strengthen the responsibility and the capacity of indi-viduals, families and civic society to act as partners inhealth, education and social protection services. Theneed for action is urgent, as the human costs of the tran-sition have been high.

Poverty and social dislocation have hit hard

Before transition, poverty was limited in the region.Access to employment and basic health and educationservices was easy and widespread; income security washigh, and disparity moderate; social supports includeduniversal pensions, generous family benefits and childcaresubsidies and services.

The falls in GDP, employment and real wages thathave characterized the transition mean that rising povertymust have affected a large part of the region’s population.Measuring the increase in poverty is, however, not clear-cut. The results depend on the definition of poverty usedand on the availability of adequate statistical surveys. Astudy relying on a poverty threshold of US$4 per day con-cluded that, in 1993-94, about 120 million people –almost 30 percent of the 414 million in the region – livedin poverty, compared to 13.6 million in 1988-89.According to this estimate, 30-40 percent of the popula-tion were living in poverty in Bulgaria, Estonia, Russia,Ukraine, and Uzbekistan, about half the population waspoor in Kazakhstan, Lithuania and Turkmenistan, andabout three-quarters in Kyrgyzstan. According to the samepoverty threshold, only a small percent of Czechs,Slovaks, Hungarians, and Slovenians would appear to bepoor. However, other studies, using different poverty lines,suggest poverty has increased to sizeable measures inCentral Europe.

Increased unemployment or wage disparity impliesthat income inequality among households is also growing,

unless mitigated by public transfers. Experts agree that thegap between rich and poor has widened in the region, butin Central Europe has remained within the range ofOECD economies. At the same time, inequality in house-hold income has risen to very high levels in several coun-tries of the former Soviet Union, including Russia, and iscomparable to that found in some South American coun-tries. There are signs the growth in income disparity isabating in some countries, such as Estonia, Lithuania andRussia, but still remains high. Income inequality contin-ues to expand slowly in countries, like the Czech Republicand Hungary, where increasing disparity was contained inthe early transition period. (See Statistical Annex, Table10.13.)

The appearance of widening income disparity callsinto question how equitably the fruits of economic growthwill be shared. In Poland, which shows the strongest eco-nomic recovery in the region, the poorest 20 percent ofthe population claimed 9 percent of total income in 1989;by 1997 this share had declined to 7 percent. So thosewho had little before now have less.

Available evidence suggests families with childrenhave suffered greater income losses than households with-out children. In Russia, for example, an estimate usingdata from the Goskomstat showed that 37 percent of fam-ilies with two children, 50 percent of families with threechildren, and 72 percent of families with four or morechildren were below the official poverty line in 1997. Bycomparison, 17 percent of pensioner households were liv-ing in poverty. Another study, using data from the RussiaLongitudinal Monitoring Survey, found that the realincome of pensioner households improved by more than6 percent, while that of families with two or more childrendeteriorated by 34 percent between mid-1992 and late1996. Similar trends have been reported in CentralEurope.

A 1996 survey in Armenia found that the presenceof a child increases the risk of extreme household povertyby 7 percent, independent of any other factors.Households twice the average household size have twicethe risk of being extremely poor. Box 1.6 uses the case ofBulgaria to illustrate how falling income and greaterincome disparity affect food consumption among variouspopulation groups.

A number of countries have made significant reformsto their tax systems, and in some cases these changes arealready bearing fruit in terms of higher government rev-enues. Additionally, there is room for more efficient spend-

ing, particularly on social transfers, as tight expendituremanagement will continue to be crucial. Social reform,therefore, is an integral part of economic change.

■

I. THE TRANSITION, CHILDREN AND WOMEN

10

1.3 Social Trends and Reforms

Federal Migration Service. International aid, which hasbeen considerable, can only lessen the problem of refugeesand displaced persons to a degree. Recent tragic events inthe Balkans demonstrate that the region is still vulnerableto ethnic conflict and violence.

Changes in life expectancy and adult mortality

At the end of the 1980s, male life expectancy was rela-tively low in the region, varying from 62 years(Turkmenistan) to 70 years (FYR Macedonia, Bosnia-Herzegovina and Albania), with heavily industrializedcountries in the middle of the range. Female lifeexpectancy showed less variance, with Turkmenistan theonly country below 70 years (68.4 in 1989). In nine coun-tries – Albania, Bulgaria, the Czech Republic, Georgia,Latvia, Lithuania, Slovakia, Slovenia, and Ukraine –

Finally, it should be noted that hostilities and eth-nic clashes have created a particular type of povertyrelated to the presence of refugees or internally displacedpersons. In most countries experiencing this problem,hundreds of thousands of people have been living inabject conditions for several years now. For example,although hostilities had come to an end in Georgia by themid-1990s, nearly 300,000 people were still registered asdisplaced in 1997. Children under age 16 accounted forone-third of these people. Women, mostly of working age,made up 53 percent. A survey in the capital, Tbilisi, foundthat one-third of the displaced families had no regularincome. Many displaced persons have been compelled tomigrate, mostly to Russia or other CIS countries, wheretheir citizenship status is unclear and their prospects dim.In Russia alone, the number of refugee or displaced chil-dren has reached 300,000, according to estimates from the

THE MONEE PROJECT - No. 6 / 1999

11

The consumption of protein-rich products like milk andmeat has declined steadily during the transition inBulgaria. A decrease in per capita consumption was firstnoted in 1991 following price liberalization. The consump-tion of milk and yogurt has continued to decline, while aslight increase in meat consumption in 1992 has reversed.

Data from the 1992-97 Household Budget Surveyshow that not only has the average consumption of milk,yogurt and meat decreased, but the disparity in con-sumption has widened. In other words, most people areeating less protein, but the poor are eating far less. Forexample, the annual per capita consumption of meatdropped from 19 kilograms to 7 kilograms among thepoorest 10 percent of the population, and from 56 kilo-grams to 37 kilograms among the richest 10 percent. So,the consumption gap has grown, as Table 1.1 illustrates:the richest went from eating three times as much meatas the poorest in 1989 to eating five times as much meatin 1997.

The overall decline in milk and yogurt consumptionand the increase in disparity have been especially pro-nounced in recent years. The per capita consumption ofmilk and yogurt was 78 kilograms in 1992, already one-third less than it had been at the beginning of the 1990s.Among the richest 10 percent of the population, con-sumption was 96 kilograms, 1.6 times more than it wasamong the poorest 10 percent. By 1997, yearly con-sumption by the highest income group (87 kilograms)was almost four times that of the lowest income group(22 kilograms). Since there are three times more childrenon average in the lowest income group than in the high-est, as Figure 1.9 shows, children are disproportionatelyaffected.

Before transition, milk and yogurt were affordableacross the Bulgarian population and were commonlyused to make up for inadequate access to other foods.

Box 1.6

Inequalities in the consumption of protein-rich food, by income, in Bulgaria

Table 1.1

Per capita consumption of meat, milk and yogurt in low- and high-income groups, Bulgaria, 1992-97

(kilograms)

1992 1993 1994 1995 1996 1997

Meatfirst decile 19.0 16.9 14.0 12.6 12.0 7.4tenth decile 55.5 54.7 44.4 45.4 45.6 36.8ratio 2.9 3.2 3.2 3.6 3.8 5.0

Milk and yogurtfirst decile 61.7 43.0 40.1 30.5 32.1 22.4tenth decile 96.0 94.0 101.0 98.4 93.5 87.1ratio 1.6 2.2 2.5 3.2 2.9 3.9

Source: NSI (various).

Note: Refers to average annual per capita consumption and population deciles of per capitaincome.

1 2 3 4 5 6 7 8 9 10

Population income decile

Proportion of children

Share of consumption

0

2

4

6

8

10

12

14

16

18

20

Share in totalconsumptionof milk andyogurt andproportion ofthe totalnumber ofchildren, byincome decile,Bulgaria, 1997Source: NSI (various).

Figure 1.9

Note: Refers to population deciles of per capita income.

The sharp drop in consumption among lower income per-sons that became even worse by 1997 raises real con-cerns about the health and nutrition of a significantshare of the Bulgarian population, particularly children.

most in Russia, dropping 6.6 years formales and 3.2 years for females by 1994.More than 1.5 million people died overand above the numbers anticipated on thebasis of pre-transition age-specific mortal-ity rates. Since 1995, life expectancy inRussia has been rising again, although it isfar from recovering to 1989 levels.

Notably, increases in mortality havehit young and middle-aged men harderthan the usual vulnerable populations –children, pregnant mothers and theelderly. Most of the “excess” deaths aredue to cardiovascular and circulatory dis-eases and accidents and violence, causes

that were already responsible for a significant part of adultmortality. Women and children are likely also to beadversely affected by this trend of men dying in theirprime – losing husbands, fathers and breadwinners andenduring the ill health of a family member and, perhaps,increased alcohol use or violence and the stresses associ-ated with all these circumstances. An examination ofmortality in the region underscores the influence of botheconomic and social environments on health.

Figure 1.11 uses GDP as a proxy indicator to illus-trate the importance of economic factors in adult malemortality in the region. The graph presents the waychanges in GDP and in mortality among men aged 40-49have correlated over the transition period. The diagramshows that, in many countries where GDP declined 20percent or more from 1989 levels, mortality has alsoincreased, sometimes enormously. There are other coun-tries – Georgia, Tajikistan, Armenia, FR Yugoslavia –where GDP has declined greatly, but male mortality hasnot greatly increased or has even decreased. This suggeststhat non-economic factors, such as social cohesion cre-ated by strong family ties and ethnic pride, may have hada mitigating effect.

Figure 1.12 uses the divorce rate as a proxy indica-tor to illustrate the importance of socialfactors in adult male mortality during thetransition. It shows the correlationbetween the mortality rates among menaged 40-49 and the general divorce rateacross the region. (This figure comparesthe average level of the rates themselves –the incidence of death and the number ofdivorces per marriages – over the period.)The graph demonstrates that high mortal-ity rates have occurred in countries withhigh divorce rates, while low mortalityrates have coincided with low divorcerates. It is a worldwide experience thatdivorced, widowed and unmarried adults –males more than females – are at higherrisk of premature death than are those

female life expectancy was above 75 years; Slovenianwomen averaged almost 77 years.

Deterioration in life expectancy, especially amongmen, was an unanticipated and shocking outcome of thetransition. In 22 of 23 countries on which time series areavailable, life expectancy has worsened during the 1990s.In many cases, the decline has been small and only tem-porary; in others, like Russia, the drop has been large andmore difficult to reverse. In 1997, life expectancy wors-ened or did not improve in Southeastern Europe, Estonia,Belarus, Moldova, Ukraine, and Turkmenistan – aboutone-third of the countries for which data were available.

Figure 1.10 shows the difference in life expectancy in1997, compared to 1989, for women and men across theregion. The data suggest an improvement in CentralEurope, but considerable worsening elsewhere, especiallyamong the male population of the western CIS andCentral Asian countries. Kazakhstan, Belarus, Ukraine,and Moldova currently seem to be most affected by a mor-tality crisis, with men dying three to five years earlier thanthe average before the transition. In these countries and inAlbania, Bulgaria, Latvia, Kyrgyzstan, and Turkmenistan,women’s life expectancy is down by one to three years.Over the full transition period, life expectancy declined

I. THE TRANSITION, CHILDREN AND WOMEN

12

WomenMen

-5

-4

-3

-2

-1

0

1

2

3

Czech Re

public

Slova

kia

Polan

d

Hung

ary

Slove

nia

FR Yu

gosla

via

Alban

ia

Bulga

ria

Roma

nia

Estonia

Latvia

Lithu

ania

Belar

us

Moldov

a

Russia

Ukraine

Arme

nia

Azerba

ijan

Kazakh

stan

Kyrgyzsta

n

Turkme

nistan

Change inmale and

female lifeexpectancy,

1989-97(years)

Source: StatisticalAnnex,

Tables 4.2, 4.3. Note: The later year is 1995 for Albania and 1996 for FR Yugoslavia.

Azerbaijan

20 30 40 50 60 70 80 90 100 110 120

Uzbekistan

Turkmenistan

Tajikistan

Kyrgyzstan

Kazakhstan

Georgia

Armenia

Ukraine

Russia

Moldova

SloveniaCzech Republic

Slovakia

Poland

HungaryFR Yugoslavia

Albania

Bulgaria

RomaniaEstonia

Latvia

Lithuania

Belarus

Change in GDP to 1997 (1989 level=100)

60

70

80

90

100

110

120

130

140

150

160

Chan

ge in

mor

talit

y ra

te to

1997

(19

89 rat

e=10

0)

Changes in mortality

rates for menaged 40-49and in real

GDP, 1989-97Sources: MONEE

project database;Statistical Annex,

Table 10.1. Note: The later year is 1996 for Albania, Tajikistan, Turkmenistan, Uzbekistan, and FR Yugoslavia.

Figure 1.10

Figure 1.11

parity in infant and young-child mortality rates remains inthe region. Given that most child deaths are preventable,this needs to be addressed. Moreover, a wider range ofindicators, such as child neglect and youth suicide, revealsthat child welfare has been seriously compromised duringthe transition years.

sharing a roof with others. This confirms that strong per-sonal and social bonds influence health and may counter-act the deleterious effects of reduced income, deteriorat-ing material conditions, insufficient housing, and inade-quate social services. Box 1.7 looks at the social determi-nants of health and a new vision of “healthy societies”.

The health and social risks of children

It has already been noted thatthe under-5 mortality rates ofthe transition countries offer amore favourable picture ofhuman development in theregion in the 1990s than dointernational rankings based onother economic or social indica-tors. In part, this reflects thehealth achievements inheritedfrom the past and the successduring the transition in prevent-ing a major deterioration.Nevertheless, a significant dis-

THE MONEE PROJECT - No. 6 / 1999

13

Turkmenistan

TajikistanUzbekistan

Kyrgyzstan

Kazakhstan

Georgia

Azerbaijan

Armenia

Ukraine

Russia

Moldova

Belarus

Lithuania

Latvia

Estonia

Romania

Bulgaria

Albania

FR YugoslaviaFYR Macedonia

Croatia Slovenia

Hungary

PolandSlovakia

Czech Republic

0 10 20 30 40 50 60 70 80

Average general divorce rate for 1989-97

4

5

6

7

8

9

10

11

12

13

Aver

age

mal

e m

orta

lity

rate

(ag

e 40

-49)

for

198

9-97

Average adultmale mortalityand divorcerates over1989-97(deaths per 100,000persons anddivorces per100 marriages)Sources: MONEEproject database;Statistical Annex, Table 5.5.

Figure 1.12

The view that health is the product of health care sys-tems was especially common in Central and EasternEurope and the USSR under state planning. It is ironicthat mortality trends in the region are now widely quotedto underpin Western research arguing that health isdetermined by socio-economic factors to a much largerdegree than has been generally supposed.

Epidemiological investigations have concluded thatinfection-related pandemics have receded in the industri-alized world over the last two centuries more because ofsocial, economic and environmental changes than becauseof medical breakthroughs. The latter often came too lateto be responsible for the changes in health and diseasepatterns. The link between poverty and certain diseases(tuberculosis, respiratory diseases, malnutrition) has beenclear for a long time. Education and life skills have alsobeen increasingly recognized as “health assets”. Morerecently, research in industrial countries is broadening therange of social factors considered important.

Studies have found correlations between thedegree of income disparity in a society and health sta-tus. It has been claimed that life skills have a positivehealth impact not only by helping an individual avoidmaterial deprivation (such as of food and shelter) andbiochemical risks (such as from germs and poisons), butalso through psychosocial factors. For example, copingskills are strongly associated with a lower risk of cardio-vascular diseases and contribute substantially to theexplanation of socio-economic gradients in health status.

Psychosocial factors, rather than only material rec-

Box 1.7

Social determinants of health

iprocity or the sharing of knowledge, may explain whythe strength of family ties and social networks based ontrust – referred to as “social capital” – is an importantdeterminant of individual health. Surveys in the UnitedStates, for example, have found that markers of socialcohesion, collective efficacy and residential stability,measured at the neighbourhood level, are strong predic-tors of homicide, crime and violence.

This broadening in the approach to health issues inthe West has been motivated by both the high expecta-tions of citizens for lifelong good health and the risingcosts of meeting these expectations through a cure-dri-ven health care system. (Research in the United Kingdomand the United States has shown that only about one-fifthof health care interventions actually improved health.)Most important, however, is the growing recognition thathealth promotion and disease prevention are more effi-cient and effective than medical treatment in raising theoverall health of a population. (Reports have found that70 percent of medical and health care interventions in theUnited Kingdom addressed preventable conditions.)

These findings suggest that maintaining goodaccess to health services and improving the quality ofhealth care may be important investments for the tran-sition countries. However, to be truly successful, theseinvestments must be built upon a broad health founda-tion that includes better access to good nutrition, suffi-cient information, proficient life skills, and the cultiva-tion of cohesive social networks and a supportive socialenvironment.

Note: Average mortality rates refer to men aged 40-49. The average is computed over 1989-97, except for Albania, Tajikistan, Turkmenistan,Uzbekistan, and FR Yugoslavia (1989-96), Croatia (1993-96) and FYR Macedonia (1993-97).

Figure 1.13 provides an update on changes in theinfant mortality rate (IMR) since 1989 for selected coun-tries. The disparity in the region is apparent. For example,in 1989, Czech babies faced three or four times less risk ofdeath than did Kyrgyz infants. Changes in the Czech rateare typical for Central European countries in transition –some initial increase followed by a steady decline.However, in other parts of the region, the IMR has beenmore resistant to improvement. In Russia, infant mortal-ity peaked in 1993-94 and has subsided to slightly below1989 levels. (It should be noted that Russia moved fromthe Soviet definition of “live birth” to the WHO conceptin 1993.)

The IMR shot up in Bosnia-Herzegovina in 1992-93. The large fall in 1994 – a year before the end of thewar – presumably reflects worsening registration amonghigh-risk groups rather than actual improvement.International efforts to save children and women by trans-porting them to other countries may have played a role aswell. Although rates declined in Kyrgyzstan over 1994-96,there is reason to think that an increasing share of infantmortality is not being registered there and in some otherparts of the region. In neighbouring Kazakhstan, a 1995

study carried out through the National Institute ofNutrition found that the infant mortality rate was sub-stantially higher and showed somewhat less decline thanindicated by official data from the Ministry of Health.

In conclusion, although measurement problems blurthe picture, increases in the IMR appear generally to havebeen contained over the transition, and, in a number ofcountries, improvements have taken place. In part, thismay be associated with a large decline in the total num-ber of newborns. In 1989-97 the number of infants bornannually decreased from 6.9 million to 4.7 million – amore than 30 percent decline on average – relieving someof the pressures on parents and existing health services.

For different reasons, child mortality rates have alsoshown relative stability during the transition period. In1997, in 17 of 22 countries for which data on 5-19 mor-tality were available, rates showed stability or fell com-pared to 1989. (See Statistical Annex, Table 3.4.)However, the rates exhibit considerable variance acrossthe region, and there is still much room for improvement.Many of the deaths are preventable since they are causedby accidents and injuries, a serious and under-recognizedproblem in the transition countries.

As a recent study has explored, mortality rates fromexternal causes (rather than illness) among children andadolescents are 2-2.5 times higher in Central and EasternEurope than they are in the European Union, and 4-5times higher in the Commonwealth of IndependentStates. This gap has existed for a long time and shows noevidence of diminishing, as Figure 1.14 shows.

Table 1.2 presents mortality rates due to externalcauses by gender for four age groups in Central andEastern Europe, the CIS and the Baltics, using EuropeanUnion data as a benchmark. While patterns by age andgender are similar across these sub-regions, the differencein mortality levels between the European Union and thetransition region is striking, especially in the case of chil-dren under age 10 in the CIS and the Baltics.

Adolescents, especially boys, have a high risk ofdying from injuries and accidents; in fact, in this agegroup, external causes are the leading factors in death. Inthe case of boys aged 10-19, reducing mortality rates fromaccidents and injuries to the EU level would close the sur-vival gap with the EU entirely in Central Europe, by morethan 90 percent in the Baltics, and by more than 80 per-cent in the western CIS (Russia, Belarus and Ukraine). Inthe southern parts of the region, smaller reductions of 20-65 percent would be achieved (largely due to the greaterincidence of communicable diseases), but, in absoluteterms, the number of children saved would be high.Overall, if mortality rates from accidents and injuries inthe transition countries had been reduced to the EU aver-age during the 1990s, there would have been 30,000 fewerdeaths of children and youths every year. This representsabout 31 percent of all deaths among those aged 1-19 inthe transition countries.

I. THE TRANSITION, CHILDREN AND WOMEN

14

1989 1990 1991 1992 1993 1994 1995 1996 1997

KyrgyzstanRomaniaRussiaBosnia-HerzegovinaCzech Republic

0

5

10

15

20

25

30

35

Infantmortality rates

in fivecountries,

1989-97(deaths of

children agedunder 1 per

1,000 livebirths)

Source: StatisticalAnnex, Table 3.1.

Figure 1.13

Note: Data for Kyrgyzstan throughout the period and for Russia in 1989-92 use the Soviet concept of“live birth” (see Glossary). Data for Bosnia-Herzegovina for 1992-97 exclude Republika Srpska.

1970 1975 1980 1985 1990 1995

European UnionCentral and Eastern EuropeCIS and Baltics

0

5

10

15

20

25

30

35

40

45

Mortality dueto accidentsand injuriesfor childrenaged 1-14,

1970-96(per 100,000

individuals inthe age group)

Source: Ecohost(1998).

Figure 1.14

Note: The age-standardized mortality rates represent what the crude mortality rates would have beenif the populations had the same age distribution as the standard European population.

were further increases in the number of children separatedfrom their families. Although the total number of chil-dren in institutions stopped growing that year, the num-ber of children placed with guardians (usually a grandpar-ent) grew by 15,500, and the number of internationaladoptions shot up from 3,251 to 5,730. The data suggestthat current efforts to reform child protection systemshave had little impact on the high rates of children wholive without their parents. At best, some progress has beenmade in placing children in alternative environmentsrather than in institutions.

Earlier Regional Monitoring Reports called atten-tion to increases in youth suicide in the region. For exam-ple, suicide rates among young males grew by 62 percent

Addressing health and social risks for children inthe region requires the development of a new relationshipamong families, the public and non-governmental insti-tutions caring for and educating children. The child pro-tection systems inherited from the communist eraaddressed risk largely by having the state “rescue” childrenfrom what was seen as poor parenting and placing them inbig centrally directed institutions. It has been clear fromthe beginning of the transition that social reforms mustpromote the responsibility and capacity of families to carefor their children.

The fourth Regional Monitoring Report revealedthat institutional care of high-risk children was still preva-lent across the region after transition began. In a contextof no new types of support or alternatives, the percentageof children left without parental care and placed in insti-tutions has increased. At the same time, the sharp declinein state funding has caused the quality of institutionalcare, already scandalous in some countries, to deteriorate.In a few countries, such as Moldova or Georgia, the pub-lic child-protection system has virtually collapsed.

Figure 1.15 shows changes in the proportion of chil-dren aged 0-3 placed in infant homes. This indicator issensitive to short-term changes in the social environmentand is a telling measure of the state of child protectionreform because alternatives to institutionalization at thisyoung age are both highly preferable and relatively easy tosecure. The graph shows the trend in 1989-95 presentedin the fourth Regional Monitoring Report and updates thepicture with 1997 data which reveal thatthe proportion of young children in insti-tutional care has risen even higher inalmost all countries for which informa-tion was available.

In the worst case, Estonia, the rateof institutionalization had risen 80 per-cent by 1995 and more than doubled by1997. With the exception of Hungary,which has initiated comprehensivereforms, institutionalization rates haveworsened, often alarmingly, since 1995.Table 8.1 in the Statistical Annex showsthat, despite the larger increases in manyother countries, Bulgaria still has thehighest proportion of children in infanthomes, followed by Romania and Latvia.

Other data confirm the disheartening evidence ofgrowing family vulnerability and the difficulties in “de-institutionalizing” children. In Romania, after some ini-tial decline, the number of children in homes andorphanages in each of the last four years has remainedabove 50,000, and the number placed with foster par-ents grew from 7,549 to 10,999 in 1996. In Russia, thesteady rise in the numbers of children “left withoutparental care” (Figure 1.16) drove up the total numberof children in institutions. 1997 data suggest that there

THE MONEE PROJECT - No. 6 / 1999

15Table 1.2

Externally caused mortality rate compared to the EuropeanUnion, 1992-93

(by age group, European Union=1.0)

1-4 years 5-9 years 10-14 years 15-19 yearsMale Female Male Female Male Female Male Female

Central and Eastern Europe 2.5 2.5 2.5 2.4 2.1 1.6 1.2 1.1

CIS and Baltic States 5.0 5.2 5.1 4.5 4.0 3.0 2.5 2.5

Source: Ecohost (1998).

1995/891997/89

-60

-40

-20

0

20

40

60

80

100

120

Czech Re

public

Slova

kia

Hung

ary

Bulga

ria

Roma

nia

Estonia

Latvia

Lithu

ania

Belar

us

Moldov

a

Russia

Arme

nia

Azerba

ijan

Georgia

Kazakh

stan

Figure 1.15

Changes inthe share ofchildren aged0-3 ininstitutionalcare, 1989-95and 1989-97(percent)Source: StatisticalAnnex, Table 8.1.Note: The information refers to children placed in infant homes.

88 86 80 79

96 102115

128 133

0

20

40

60

80

100

120

140

1989 1990 1991 1992 1993 1994 1995 1996 1997

Figure 1.16

Childrenwithoutparental careplaced in institutionsin Russia,1989-97(1,000s)Sources: MONEEproject database;MLSD (1995), (1997).Note: The data refer to the total number of children without parental care living in institutions each year.

in the Czech Republic, 56 percent in Lithuania and 77percent in Russia in 1989-95. Recent data suggest therehas been little improvement in the last few years.

The total number of youth suicides in Russia fell in1996, after peaking at 2,930 cases in 1995, but rose againin 1997. A similar pattern has been documented in FYRMacedonia, Bulgaria, Estonia, Lithuania, Moldova, andKazakhstan. (See Statistical Annex, Tables 3.7 and 3.8.)These findings underline the need for young people toreceive more support from families, social networks andservices. Social cohesion is an important determinant ofhealth, and youth suicide is a sensitive indicator of thestate of social bonds.

The evidence above highlights risks that should beaddressed with urgency in the transition countries. Inmany cases, prevention programmes are non-existent,weak, or poorly coordinated. International donors andinstitutions could help out through research and advo-cacy, by supporting the development of local capacity andby facilitating linkages and partnerships with countries,inside and outside the region, where effective preventionstrategies have been implemented.

Changes in education

Universal access to basic education for both girls and boyswas a noteworthy achievement of the communist period.Good international marks in literacy and education enrol-ment – primary, secondary and tertiary – improved thehuman development standing of the region. The stronglegacy of these education systems is sometimes striking. A1995 international survey of learning achievement among13-year-olds in 41 countries ranked the Czech Republic2nd in science and 6th in maths, compared to ranks of18th and 23rd for Germany and 17th and 28th for theUnited States. Russia and several other former communistcountries also scored well, although others, such asRomania, did not.

Earlier in this chapter, it is noted that the commandeconomies of the communist era promoted the significantparticipation of women in the workforce and that therewas considerable progress in achieving gender equality ineducation. A strong commitment to educational opportu-nities for girls and boy exists in all countries of the region.Enrolment rates in basic education remained relatively

high in Central Europe and many other countries after1989 with little evidence of a gender gap appearing.Recent studies in the Baltics, however, reveal that a sig-nificant share of children either do not start school at thecompulsory age, or do not finish school.

There is some evidence of larger declines in enrol-ment, especially in the countries of the former Yugoslavia,the Caucasus and Central Asia, but less-stringent popula-tion registers and under-reporting (often due to ethnichostilities), as well as methodological changes, make itdifficult to review the situation. The available data, how-ever, still do not suggest any systematic gender gap. Forexample, in 1997, 251,000 girls and 256,000 boys wereenrolled in basic education in Armenia, and 467,000 girlsand 480,000 boys in Turkmenistan. Some anecdotal evi-dence points to cases in Central Asia where the educationenrolment of girls is lower than that of boys, especially inrural areas.

There is a more marked gender difference in sec-ondary school enrolment, but this favours girls.Enrolment in general secondary education – where girlshave been over-represented in the past – increased in allcountries, except in Moldova and the countries of theCaucasus and Central Asia. On the other hand, manyfewer students are enrolled in technical and vocationalschools (a traditional male preserve).

Figure 1.17 shows that in countries where femaleshad a high share of enrolment in tertiary education thisshare has increased. However, where this share was lower,as in some countries of the Caucasus and Central Asia, ithas tended to decline since 1989. Some sources suggestthat, in these countries, women from rural areas, in par-ticular, now have a relatively poor chance of receiving ter-tiary education.

While recognizing past progress and current effortsin education, the fifth Regional Monitoring Reportstressed the need for educational reforms across theregion. To maintain their comparative “knowledge”advantage under the new market conditions, the transi-tion countries have much to do to strengthen the equityand efficiency of their education systems. In many coun-tries the system that produced the relatively positive edu-cation picture of the 1990s is now “running on air”.

In Russia, real government expenditures on educa-tion in 1997 were less than one-third of those in 1990.About half the unpaid wage bill from federal and regionalbudgets and almost all strikes occurred in the educationalsector. In Bulgaria and Kyrgyzstan, only one-quarter of for-mer funding levels for education were secured in 1997,and, in Georgia, slightly over one-tenth. Staff numbersremained stable or even increased in most countries, butthese levels may be hard to maintain with shrinking stateresources and teachers who are often demoralized by lowpay and wage arrears.

Under these conditions, parent and communityinvolvement in and funding of pre-school, extra-curricu-

I. THE TRANSITION, CHILDREN AND WOMEN

16

53 52 53

42

34

42

57 60 58

41

26

35

Slovenia Lithuania Tajikistan

1989

1997

0

10

20

30

40

50

60

Bulgaria Azerbaijan Turkmenistan

Figure 1.17

Share ofwomen among

tertiaryeducation

students, 1989and 1997(percent)

Source: StatisticalAnnex, Table 7.5. Note: Data refer to the 1989/90 and 1997/98 school years (1991/92 and 1996/97 for Tajikistan).

Promoting and supporting the capacity of parents toprovide for and raise their families require a commitmentto gender equality. When women endure inequality, so dochildren, especially girls. In this light, the last section ofthis introductory chapter reviews the political commit-ments of countries to women’s equality – an importantarea of transition-related reforms in the region.

■

As the preceding sections make clear, the process of tran-sition in this region of the world is the profound process ofreforming the relationships among individuals, society, theeconomy, and the state. The transition countries have theopportunity to adopt the “best practices” of the 20th cen-tury’s most successful nations, which, in short, meansembracing democratic government, a liberalized market-place and concern for human rights. Linking political,social and economic reforms together is a challenge, but itis the fundamental architecture of rights-based humandevelopment. This section examines the status of women’srights as human rights in the transition countries on thebasis of the implementation of the 1979 UN Conventionon the Elimination of All Forms of Discrimination againstWomen (CEDAW). Advancing equality for womeninvolves expanding the choices available to women, and,it is understood, advancing equality for women entailsbroader benefits for children, men and society.

Implementing CEDAW

Under communism, women were guaranteed equal rightsin the law, and the governments of the region signed andratified CEDAW. (See Box 1.8 for a summary of CEDAW.)However, the participation of the communist countries inthe international process to review compliance andenforcement of CEDAW within their borders was largelyceremonial. Under communism – where ideology, politics,government, law, the economy, and society were fused –there was only one place for rights to reside: in the state.In practice, human rights were not recognized as inherentand inalienable individual rights, but treated as collectiverights best expressed through the instrument of the state.In this monolithic environment, many of the most funda-mental human rights, including the right to form civicassociations, were denied.

The desire to enjoy individual human rights was oneof the primary engines behind the collapse of communism,and integrating human rights into the foundation and everyaspect o