Resource information
The sharp reduction in poverty in
Bulgaria since the 1997 crisis highlights the role of
effective economic stabilization policies and the social
safety nets in improving the living conditions of the
population. The nature of poverty in Bulgaria has changed
since 1997, when poverty for many households was a transient
phenomenon resulting from the immediate shock of
hyperinflation and sharply increasing unemployment. Poverty
in 2001 is more entrenched, concentrated among clearly
defined groups. Most strikingly, poverty is highest among
ethnic minorities, which comprise 60 percent of the poor.
Roma are overrepresented among this group. this trend
highlights the need for Bulgaria's poverty reduction
strategy to focus on measures to address inclusion of ethnic
minorities within society. Despite the improvements since
1997, there are indications of underlying fault lines which
threaten the trend of rising living standards. In
particular, if the high level of unemployment is maintained,
or continued to increase, poverty will go up. While
unemployed households have managed to stay out of poverty by
relying on the safety net and private coping strategies, the
close link between poverty and unemployment indicates that
these trends are not sustainable. Similarly, the importance
of the skills gap suggests that declining access to
education will contribute to poverty over the long-term. The
priority for the Government is to maintain its reform path
and sustain the growth levels of the past five years. A
combination of policies which address the underlying causes
of unemployment, expand opportunities through building human
capital, and protect the poor through well-targeted programs
are the pillars of an effective anti-poverty strategy.
Improvements in poverty monitoring and communication with
the public are also key. Despite the improvements in living
conditions since 1997, opinion surveys indicate that nearly
three-quarters of the population think that they live in
poverty. Addressing these perceptions and expectations is
critical to maintain public trust in government institutions
and the reform process.
