Bulgaria : Poverty Assessment
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.