UNICEF Innocenti Research Centre Piazza SS. Annunziata, 12 1 50122 Florence, Italy website: www.unicef-icdc.org

POVERTY AND WELFARE TRENDS IN OVER THE 1990s

Country Paper

Co-ordinator: Erbolat Musabekov National Statistics Agency,

Background paper prepared for the Social Monitor (2002)

The opinions expressed are those of the authors and do not necessarily reflect the policies or views of UNICEF. 2

SOCIAL MONITORING: POVERTY AND WELL-BEING TRENDS IN KAZAKHSTAN IN THE 1990S

Population

According to the census data, the population of Kazakhstan amounted to 14.9 million people in

1999, having decreased by 1.2 million in comparison with 1989.

The number of the urban population decreased by 755,300 people, or 8.3%, over the past ten years. Throughout the republic as a whole, the share of the urban population decreased from 56.4% to 56.0% as compared with 1989.

Migration, or exodus of citizens from the republic, played a decisive role in the decrease in the population between 1990 and 1999, whereby more people left from the towns.

Between 1992 and 1994, there was a sudden leap in the number of people leaving the republic, followed by a gradual decrease to a level of 100,000 by 1999, which was the amount recorded in 1991.

The 1990s saw a sharp drop in the natural population growth (i.e. the ratio of births to deaths declined). In 1991, the balance in natural population growth amounted to 218,900, and in 1999 it dropped to 64,600; in 2000, however, this index went up slightly to reach 69,100.

The decrease in the natural population growth balance in the 1990s was due to both a decline in the birth rate and an increase in the mortality rate.

The deterioration of the demographic situation in Kazakhstan in the 1990s is related to the crisis phenomena in the country’s social and economic development. In 1992, a general decline in the number of the population began due to migration-induced losses exceeding its natural growth. In 1994, migration-induced losses reached their peak, amounting to 436,600, and in subsequent years, although it stabilised, it was still quite appreciable at 0.0-0.9% of the republic’s total population in 1999-2000. During the last three years, there has been a marked reduction in the general population decline from 219,000 in 1997 to 54,000 in 2000.

In the future, the size of the population is expected to remain stable at a level of 15 million people. A positive result of this process is that the decrease in population has curbed urban population growth, thus averting excessive pressure on the social infrastructure (education, health care, water supply, sanitation, etc.), and, theoretically, alleviating the unemployment situation. In addition, it has brought about a growth in per capita incomes. Nonetheless, as a result of this situation, the domestic consumer market for Kazakhstan producers remains quite small and there can be difficulties with availability of skilled labour.

Indices in the health sector are contradictory. The level of maternal and child mortality went down in the period under review. Average life expectancy, however, decreased from 68.6 years (1990) to 64.5 years (1998). The situation is more serious for males, whose average life expectancy reduced from 63.8 to 59.0 years, than with females (from 73.1 to 70.4). The spending on public health in percentage of the GDP also decreased from 3.3% to 2.3%.

In education, the adult literacy rate increased to reach the level of 98.5% (97.5% in 1990). However, spending on education in percentage of the GDP went down from 6.6% to 4.1% in the period under review. The level of attendance at basic education schools dropped from 93% in 1990 to 89% in 1997. Most of the spending on education is borne by the regional budgets, which largely depend on income taxes paid by legal entities and are therefore sensitive to economic fluctuations. 3 Some minor improvements were achieved in poverty reduction. Access to safe drinking water and sanitation services have undoubtedly improved in rural areas, the percentage of people who now have access to these amenities is 65% and 61% respectively, as compared with 30% and 19% in 1990. However, the percentage of the population living below the poverty line increased from 25% in 1992 to 43.4% in 1999. Kazakhstan’s ranking in terms of “human development,” as defined by UN indices, has worsened: its “human index” went down from 0.8 to 0.7 and it fell from 54th to 76th place in the list of countries. There is a substantial geographical difference in the distribution of the poor people throughout Kazakhstan: two-thirds of them live in the southern and eastern regions of the country (rural poverty) and their specific share is six-fold higher in the south than in the north.1

Unemployment remains a problem, particularly if we take into account latent unemployment. Together with officially registered unemployment, they constitute approximately 12%. Very few unemployed people receive public assistance.

Table 2. Social and Economic Indicators of Kazakhstan

Before gaining The earliest Basic indicators independence (year) year (year)

Population Population size (million) 16.4 1990 14.9 1999 Rural population (%) 43.2 1990 44.3 Annual growth (%) -0.5 1990 -0.6 Fertility rate (children born per woman) 3.01 1990 1.86 1997

Employment Unemployment (% of able-bodied population) 0.6 1993 6.3 1999

Population health Maternal mortality rate (per 100,000 women ) 67.1 1991 54.9 1998 Infant mortality rate (children under 1 year per 100,000 births) 26.3 1990 21.6 1998 Life expectancy (years, total population) 68.6 1990 64.5 1998 Life expectancy, male 63.8 1991 59 1998 Life expectancy, female 73.1 1991 70.4 1998 Health care spending/GDP (%) 3.3 1990 2.3 1999

Education Adult literacy rate (%) 97.5 1989 98.5 1998 Education spending/GDP (%) 6.6 1990 4.1 1999

Poverty Below poverty line (%) 25 1992 43.4 1999 Income distribution ratio (incomes of the richest 10% to incomes of the poorest 10%) 11.3 1999 Access to safe drinking water—rural households (%) 30 1990 65 1997 Access to sanitation services—rural households 19 1990 61 1993 (%) Human development index 0.802 1990 0.704 1997 Human development ranking 54 1990 76 1997

Sources: Asian Development Bank (2001-2003)—Kazakhstan, December 2000, Appendix, National Agency for Statistics, UNDP, World Bank, World Resources Institute

1 The data were obtained from the World Bank’s Report on Living Standards in Kazakhstan, July 1996. 4 Education

At the time of the 1999 population census, 1,318,600 (12.4%) of the country’s total population aged 15 years and over had a higher education, 182,800 (1.7%)—an incomplete higher education, 2,377,900 (22.3%)—specialised secondary education, 3,932,600 (36.8%)—general secondary education, 1,928,100 (18.1%)—basic general education, and only as few as 802,600 (7.5%)— primary education. In 1999, in comparison with 1989, there was an increase both in the number of people aged 15 years and over and in the percentage of people with a higher, specialised secondary, and general secondary education versus a decrease in the number and percentage of people with a basic general and primary education. Thus, in 1999 there were 124 specialists with a higher education (97 in 1989), 223—with a specialised secondary and 368—with a general secondary education per 1,000 of the population as against 184 and 339 in 1989, respectively.

The education system in Kazakhstan can be divided into pre-school education (kindergartens), secondary education, vocational training, technical colleges, and universities or higher education. Pre-school education is provided by various state-run and private establishments. State-run pre- school establishments are financed from the local budgets, with some financing provided by the parents. Beginning from 1991, most of pre-school educational establishments have been closed down, and the number of children receiving pre-school education dropped to less than 20% in 1996 and less than 10% in 2000 of what it used to be, which has had an adverse effect on the learning progress of first-grade students in secondary schools.

Basic (compulsory) education is organised according to a 4-5-2 system and comprises four years of primary education, five years of incomplete secondary education, and two years of complete secondary education. The total number of primary and secondary education schools was approximately 8,000 (in 1997), with no substantial changes since 1991. The total number of school students is upwards of 3 million, with an attendance rate of more than 80%. Primary and secondary education is financed by the state from the regional budgets, and the Ministry of Education and Science sets the obligatory minimum standards. In addition, the Ministry of Education and Science finances nation-wide state-sponsored programmes (such as computerisation) also using state budget funds.

The deterioration in the economic situation has resulted in a substantial drop in the number of students receiving professional education. Professional education is also financed mainly by means of public funds from the regional budgets. There are 314 establishments providing initial vocational training with a total enrolment of 89,000 students, and 282 higher professional education establishments attended by a total of 138,700 students. Most of the primary vocational training institutions are financed from the state budget, whereas higher professional education institutions are financed from other sources. The Ministry of Education regulates the activities of most of the educational institutions, some of which are accountable to the Ministry of Labour and Social Protection.

Higher education (universities) comprises various private and state-run educational institutions with a total attendance of 266,000 students. State-run educational institutions (47 institutions with 186,500 students) are financed from the republic’s budget, and 117 educational institutions are financed by means of private funds. The state finances the education of more than 50% of the students.

In the past few years, emphasis in the state financing of the education system has been shifted from pre-school and professional education to primary and secondary education (65% of government spending on education in 1998 as compared with 48% in 1994).

In the education process, the Government of the Republic of Kazakhstan gives priority to 5 developing basic—primary and secondary—education, which lays the groundwork for further education. In 1996-97, the government became aware that the education system was in need of a radical reform. The textbooks in use had become obsolete both physically and morally, teaching aids and equipment did not meet the requirements, the curricula had to be revised, and the teaching staff needed substantial retraining. In addition, quite a number of schools were in need of repair.

The problem of financing education is often regarded as crucial. If we consider it within the structure of the GDP, we can see that the total spending on education is decreasing (5.7% in 1990 to 4.1% in 1999), which gives rise to a certain amount of concern. Percentage in the GDP is not an ideal means of measurement; per capita and per student spending are much better indicators. Spending on education as a percentage of the total spending structure remains stable (16.7% in 1993 in comparison with 18.1%), which shows that education remains an important item in the state budget. Of great significance in this case is the difference in spending on education by regions. Some regions spend more money than is provided for by the minimum standard. This raises the question of establishing such minimum standards. To what extent can the financial situation in the regions affect these standards? Moreover, a number of programmes serving national interests are financed from the republic’s budget (such as the computerisation programme). In this context, the Ministry of Education and Science should decide what other capital projects should be financed from the state budget in order to reduce pressure on the regional budgets and enable the regions to establish relatively high minimum standards without any difficulty.

A major task to be fulfilled in the future is switching from an 11-year to a 12-year system of secondary education in order to become more in line with the world practice. This will make it possible for the citizens of Kazakhstan to enter foreign universities on a parity basis. This reform will involve substantial financial expenditures, and the Ministry of Education and Science will have to make an economic appraisal of the cost of this project.

Kazakhstan occupies a very large territory with a low population density. With this fact in mind, substantial attention should be given to introducing a long-distance education system.

The supply and demand problem with respect to engineers and technicians is quite pressing in all countries. In Kazakhstan, there has been a decrease in the number of students receiving a professional education, and now the time has come to reconsider the importance of these specialists in the present-day economic situation. Professional education institutions should be able to forecast the trends in demand for engineering specialists and promptly readjust themselves in keeping with these trends. 6

The Structure of the Population by Marital Status and Family Development

According to the data of the 1999 population census, 62.3% of males and 55.6% of females aged 15 years and over were married. In the time that had elapsed since the previous census, the percentage of married persons decreased by 10.3%, while that of persons who have never been married increased by 7.1% among males and by 12.3% among females to reach 30.4% and 21.6%, respectively. The share of widowers was 2.9% and widows—14.7%, and a 30.7% increase in the number of widowers was recorded.

The share of divorced and separated persons among males aged 15 years and over was 4.4% and among females—8.2%. As compared to 1989, this is an increase by 21.9% and 30%, respectively.

The Structure of the Population of the Republic of Kazakhstan by Marital Status and Age

The structure of the population of the Republic of Kazakhstan by marital status

58,8% heretofore unmarried

married

widows and widowers 25,7%

divorced or separated 6,4% 9,1% 7

(in percentage) including heretofore married widowers and divorced or unmarried widows separated 1999 1989 1999 1989 1999 1989 1999 1989 Males Total 30.4 27.3 62.3 66.8 2.9 2.1 4.4 3.4 including those aged: 15 years 99.9 99.8 0.1 0.1 - 0.0 - 0.0 16-17 years 99.6 99.3 0.4 0.6 0.0 0.0 0.0 0.0 18-19 years 96.6 95.8 3.3 2.9 0.0 0.0 0.0 0.0 20-24 years 74.1 64.4 24.8 33.7 0.1 0.1 1.0 1.0 25-29 years 33.0 20.6 62.2 75.6 0.3 0.1 4.5 3.2 30-34 years 14.1 8.6 79.2 86.2 0.5 0.3 6.2 4.7 35-39 years 8.2 4.9 84.4 88.8 0.7 0.5 6.7 5.7 40-44 years 5.4 3.2 86.1 89.5 1.2 0.9 7.2 6.2 45-49 years 3.9 2.5 86.8 89.3 2.0 1.9 7.3 6.2 50-54 years 2.7 1.7 87.3 89.6 3.3 3.1 6.7 5.4 55-59 years 2.1 1.2 86.2 89.4 6.2 5.1 5.5 4.2 60-69 years 1.4 0.8 83.3 87.2 11.4 8.8 3.8 2.9 70 years and over 0.8 0.6 71.3 73.9 26.2 23.9 1.7 1.1 Females Total 21.6 18.8 55.6 60.4 14.7 14.3 8.1 6.1 including those aged: 15 years 99.8 99.7 0.2 0.2 0.0 0.0 - 0.0 16-17 years 97.3 97.2 2.7 2.7 0.0 0.0 0.0 0.1 18-19 years 83.4 77.9 15.7 20.3 0.2 0.1 0.6 0.6 20-24 years 47.4 36.7 47.3 59.2 0.8 0.3 4.5 3.3 25-29 years 19.5 13.2 68.9 79.6 1.7 0.8 9.9 6.1 30-34 years 10.3 6.9 75.3 83.5 2.7 1.6 11.6 7.8 35-39 years 7.1 4.4 76.4 83.0 4.2 3.2 12.3 9.3 40-44 years 5.2 3.1 75.4 80.8 6.6 5.8 12.8 10.2 45-49 years 4.1 1.9 72.8 77.4 10.7 10.7 12.4 9.9 50-54 years 3.1 1.7 68.9 72.9 16.9 16.1 11.1 9.2 55-59 years 2.0 2.1 62.2 64.2 27.2 25.5 8.5 8.0 60-69 years 1.9 2.5 49.8 47.7 42.0 43.3 6.3 6.0 70 years and over 2.3 1.5 21.7 16.1 73.0 79.6 3.0 2.0

The residents of the (64.4% of males and 58.7% of females) and the North Kazakhstan Region (65.1% and 58.6%, respectively) constitute the greatest percentage of married persons. Among males, the highest marriage rate was recorded in the North Kazakhstan Region— 65.1% and among females, in the South Kazakhstan Region—58.9%. Somewhat lower marriage rates were recorded in the (58.2% of males and 53.4% of females); among males, in the (58.8%) and the city of Almaty (59.3%); and among females, in the cities of Almaty and Astana (47.4% and 51.6%, respectively). The highest percentage of widowers and widows was recorded in the (16.5% among females and 3.2% among males) and the lowest, in the Mangistau Region (11% and 2.3%, respectively).

The highest share of divorced and separated persons was recorded in the cities of Almaty (12.5% among females and 6.5% among males) and Astana (9.9% and 5.2%, respectively), and also in the Pavlodar (9.9% and 5.5%), Karaganda (9.8% and 5.5%), Kostanai (9% and 5.2%) and East 8 Kazakhstan (8.5% and 5.1%) regions, with the lowest one in the Kyzylorda (5.2% and 2.6%) and South Kazakhstan (5.5% and 2.4%) regions.

The Population of the Republic of Kazakhstan by Marital Status (thousand people) Total population including aged 15 years heretofore widowers and divorced or married and over unmarried widows separated 1999 1989 1999 1989 1999 1989 1999 1989 1999 1989 Males Republic of Kazakhstan 5,024.1 5,226.7 1,526.9 1,425.7 3,132.53,489.9 145.2 111.1 219.4 180.0 Akmola Region 292.1 353.3 83.2 89.6 188.0 245.1 8.3 7.0 12.6 10.9 Aktyubinsk Region 225.2 230.3 70.3 63.2 140.3 154.5 6.4 5.3 8.1 6.2 518.5 522.5 164.2 149.3 319.2 343.7 14.4 10.9 20.7 15.8 Atyrau Region 140.6 131.5 51.2 46.0 81.8 78.9 4.1 3.1 3.5 3.0 East Kazakhstan Region 538.2 587.6 155.2 152.0 338.2 398.0 17.4 13.6 27.4 22.5 Zhambyl Region 320.3 320.2 102.2 90.4 196.4 211.5 8.9 7.0 12.8 10.0 209.1 202.6 62.9 57.6 132.2 134.4 5.9 4.1 8.0 6.0 489.3 589.6 140.0 153.0 305.9 396.5 16.4 12.6 27.0 25.0 Kostanai Region 356.6 404.9 97.5 97.9 230.1 284.0 10.5 7.6 18.5 14.7 Kyzylorda Region 190.3 170.5 68.5 56.8 111.9 103.8 4.9 3.9 5.0 3.4 Mangistau Region 100.7 104.3 31.7 30.0 62.8 67.9 2.4 1.9 3.8 3.9 281.3 308.2 80.4 77.3 177.3 211.6 8.2 6.1 15.5 12.7 North Kazakhstan Region 257.9 302.7 71.3 74.1 168.0 212.7 7.6 6.3 11.0 9.1 South Kazakhstan Region 603.0 535.6 194.9 165.2 379.5 344.9 14.1 10.9 14.5 12.1 Astana, city of 109.9 98.8 32.2 25.8 68.9 66.5 3.1 1.8 5.7 4.4 Almaty, city of 391.1 364.1 121.2 97.5 232.0 235.9 12.6 9.0 25.3 20.3 Females Republic of Kazakhstan 5,652.8 5,796.4 1,221.1 1,087.3 3,140.83,503.4 830.0 830.0 460.8 354.4 Akmola Region 320.3 379.9 60.6 61.0 188.0 245.7 48.6 53.0 23.1 19.5 Aktyubinsk Region 251.1 256.6 57.9 51.9 140.4 155.6 35.7 35.6 17.1 12.2 Almaty Region 564.2 568.6 121.0 104.9 319.6 344.8 81.8 85.6 41.8 30.6 Atyrau Region 152.6 143.1 40.0 35.4 81.5 78.8 23.3 23.3 7.8 5.1 East Kazakhstan Region 612.5 656.3 121.3 111.6 337.9 398.3 101.0 103.0 52.3 41.7 Zhambyl Region 352.5 355.2 76.8 65.4 196.6 213.9 50.4 53.4 28.8 21.3 West Kazakhstan Region 233.4 227.0 48.7 44.6 132.9 135.3 36.6 36.2 15.2 10.2 Karaganda Region 567.2 645.2 115.9 112.4 307.9 396.2 87.6 85.1 55.8 48.9 Kostanai Region 407.3 450.0 78.4 74.9 231.3 285.5 61.0 61.0 36.5 27.9 Kyzylorda Region 195.0 179.5 48.4 41.1 111.5 104.8 24.9 25.0 10.2 5.5 Mangistau Region 107.2 104.6 25.4 19.8 61.6 66.9 11.8 10.0 8.4 7.4 Pavlodar Region 322.6 342.8 67.1 60.8 177.1 212.5 46.4 45.1 32.0 23.8 North-Kazakhstan Region 287.2 334.0 52.1 50.2 168.3 214.6 46.5 51.5 20.3 17.3 South Kazakhstan Region 645.2 589.0 147.5 127.6 380.1 348.6 82.0 83.2 35.6 26.8 Astana, city of 133.5 112.3 34.9 25.9 68.8 63.5 16.5 13.4 13.2 9.1 Almaty, city of 501.0 452.3 125.1 99.8 237.3 238.4 75.9 65.6 62.7 47.1 9

Public Health Care

The general state of health of the population of the Republic of Kazakhstan, as shown by most of the indicators, gives rise to serious concern. There is a substantial drop in average life expectancy— from 68.6 years in 1990 to 64.5 years in 1998. The decrease in life expectancy was particularly dramatic among males—from 63.8 years to 59.0 years, whereas among females this indicator amounts to 70.2 years. Migration in the early 1990s and a surplus of deaths over births were the reasons behind a decrease in the size of the population. What causes particular concern is a high mortality rate among able-bodied males.

Table 1. Indicators in the sphere of health care Indicator 1991 1995 1998 2000 Birthrate (births per 1,000) 14.8 10.4 10.9 12.5 Mortality rate (deaths per 1,000) 8.8 11.2 11.1 10.6 Infant mortality rate (per 1,000) 22.0 19.7 20.2 14.7 Maternal mortality rate per 100,000 78.2 99.8 63.6 66.4 Incidence of tuberculosis per 100,000 45.7 54.3 78.7 72.8 Incidence of syphilis per 100,000 3.3 406.1 295.7 178.9 State-run hospitals 1,710 1,399 867 735 Private hospitals 105 Preventive-treatment clinics, state-run 1,752 Preventive-treatment clinics, private 376 Central district hospitals 217 218 197 156 Rural hospitals 830 577 193 140 Doctors 62,213 54,697 47,172 42,711 Doctors per 10,000 74.0 71.2 77.4 64.2 Nurses per 10,000 119.7 86.4 93.8 82.4 Total hospital beds 215,251 176,598 113,011 95,356 Hospital beds per 10,000 127.4 107.2 72.9 63.8

Source: Sostoyaniye zdorovya naseleniya i sistema zdravookhraneniya v Respublike Kazakhstan 1991-2000 gg. (The Population’s State of Health and the System of Health Care in the Republic of Kazakhstan: 1991- 2000), the Republic of Kazakhstan Health Care Agency, Astana, 2001.

The decrease in birthrate and the growth in mortality rate, which continued from 1991 to 1998, were brought to a halt in 2000, when a natural increase in the population began. The maternal mortality rate is still quite high (66.4/100,000)—approximately 8-fold higher than the corresponding index in the United States. The child mortality rate, 14.7/1,000, remains high, even though there has been a certain improvement in the situation since 1991. The morbidity rate is definitely on the rise, which can be seen from the data on tuberculosis.

At present, health care services are provided at six levels:

• Level 1: nurses rendering simple types of medical aid at the district level (medical advice, obstetrics and vaccination);

• Level 2: general practitioners rendering first medical aid (medical advice, obstetric aid, simple types of medical treatment, vaccination and preventive treatment); 10 • Level 3: polyclinics and rural hospitals (ordinary types of medical aid rendered as part of out- patient treatment); consultation services for levels 1 and 2;

• Level 4: general-type district hospitals offering hospital and out-patient treatment and co- ordinating health care services within the district;

• Level 5: regional specialised hospitals providing general and specialised medical services, including surgery and the training of medical workers;

• Level 6: major clinical centres, national general and specialised hospitals.

Standards in the sphere of health protection at the nationwide level are set by the Ministry of Public Health. The standards are set in quantitative and cost terms. The regions are mainly responsible for providing medical services. Only co-ordinated special national programmes and highly specialised hospitals are financed from the republic’s budget. The participation of private companies in medical care is growing: today they account for 25% of the health sector. At present, the patients of medical institutions have to pay the full cost of medical care. However, the investment outlays of state-run hospitals are financed from the state or regional budgets.

The Ministry of Public Health has established a norm of 3,500 tenge per capita of the population. Health care related costs, however, widely vary. Some of the poorer regions are unable to meet the state standards and so they spend only 1,050 tenge per capita (Almaty Region). The costs paid by other regions (those in the west of the republic) considerably exceed the norm, coming to as much as 7,000 tenge per capita.

As shown in Table 1, the possibilities of the health care system for providing medical services have substantially decreased over time. The number of doctors decreased by 22% between 1991 and 2000, and their ratio per 10,000 population dropped from 74.0 to 64.2, with the ratio of nurses decreasing from 119.7 to 82.4 per 10,000 population. The number of state-run hospitals and hospital beds also decreased substantially—by 57% and 58%, respectively. This resulted in a 50% reduction in the number of hospital beds per 10,000 population (63.8 in 2000 as compared with 127.4 in 1991). To some extent, the emergence of private hospitals and clinics2 have made this situation less dramatic.

The main problem for the republic’s health care system is the poor state of health of Kazakhstan’s population. The good state of health of population results from a chain of factors: a healthy environment, effective preventive measures, good nutrition and sanitary conditions, and, finally, effective medical treatment. Today, problems exist in each link of this chain; however, there are sufficient opportunities for improvement.

Questions relating to all the links of this chain are discussed in more detail below.

Environment:

According to the latest official statistics,3 the state of the environment is the main cause of diseases in Kazakhstan. Violations of sanitary standards induced by the state of the environment are responsible for 80% of disease cases and 20% of deaths. The radiation level remains high in the regions formerly used for nuclear tests or for uranium waste burial. Many of the rivers and lakes are severely polluted. The level of pollution in the River and its tributaries exceeds the admissible standards 12-fold in terms of copper, zinc and mercury concentration. The waters in Lake Balkhash and the rivers Syr Daria, Badam, Shu, , , and do not correspond to the sanitary standards because of high pesticide and herbicide content.

2 In 2000, there were 105 private hospitals and 376 preventive treatment clinics (compared with 1,752 state-run clinics). 3 Programma Zdorovya Natsii (Programme for the Nation's Health), Agency for Public Health, Astana, 1998. 11 Every year, six million tons of various substances produced by major industrial facilities and (mining) enterprises, which lack the properly equipped gas and dust absorbing installations, are emitted into the air, leading to an increasing number of industrial diseases and cases of disability.

And last but not least—the availability of water, in particular, drinking water is a major problem in many .

Birthrate, Family Planning and Child Nutrition:

Natural population growth is negative in Kazakhstan: the mortality rate exceeds the birthrate. There are a number of reasons for this situation. First and foremost, the number of abortions is particularly alarming: there are 66.7 abortions per 100 births, whereas in industrialised countries the relevant number is between 5 and 10 for every 100 births. The maternal mortality rate—76.9 deaths per 100,000 live births—is also particularly high. In all, 60% of births are accompanied by various complications and 288 newborn babies suffer from congenital defects.

Another major problem directly linked to the high abortion rate is the need to improve family planning in order to reduce the level of unwanted pregnancies and the number of infertile women. The use of contraceptives should be publicised by providing the masses with more information and stepping up sex education.

Malnutrition is widespread among children under ten and is the reason for the high child mortality rate. In rural districts, many children of the pre-school age suffer from anemia, hypertrophy, rickets, and physical and mental retardation.

Financing of Health Care Services:

The financing of health care services remains a major problem. As was noted above, the low level of medical care at state-run institutions (hospitals and clinics) in different regions is giving rise to serious concern. The decrease in the volume of health care services, particularly in the rural areas, is just as alarming. As for financing, two questions come to the fore. One concerns the volume of public expenses (at all levels) in the light of the development of a strong private sector in health care services. The other question concerns patients’ ability to pay for medical care. If the public health system continues to develop as a system where patients have to bear the full cost of the services offered, the prospective users or buyers of such services should be “insured” against financial risks related to unforeseen expenses or the use of too expensive medical treatment and services, the cost of which will far exceed their present incomes.

Quality of Medical Services:

The situation with health care in Kazakhstan is arousing grave concern, since the quality of medical services does not meet the appropriate standards. This is explained by the following factors: • The number of medical workers and specialists is insufficient to meet the demand; • The training system for medical workers and specialists is poorly developed and medical research is behind the times; • Many hospitals are lacking up-to-date equipment necessary for providing high-quality medical services; • Innovative management, which is necessary to distribute equipment and services and optimise health care services, is undeveloped in the public health system. 12 Social Development and Protection of the Population

The number of the gainfully employed population is estimated at 7.6 million people, 3.5 million of whom are employed in the official economy and 2.1 million in the shadow businesses. The overall unemployment level is still high and approximates 1 million people (0.96 million or 12.6%). The total number of unemployed is subdivided into 260,000 registered unemployed and 600,000 unregistered. There is a strong interrelation between unemployment and poverty, and the situation has improved but slightly. The percentage of the population with living standards below the poverty level has increased from 25% (in 1992) to 43.4% (in 1999). The poverty level also varies4 in different parts of Kazakhstan. Two-thirds of the poverty-stricken population live in the south-east of the country (poor rural areas), so that the number of the poor in the south is six-times as large as in the north. According to the latest estimates (fourth quarter of 2001),5 the income of the poverty- stricken population amounts to 1,496 tenge a month, ranging from 1,200 tenge (the South Kazakhstan Region) to 2,023 tenge (the Mangistau Region). The distribution of incomes is rather uneven in Kazakhstan, where an average income of 10% of the most well-to-to people exceeds that of the poorest 10% by a 1,000%. By way of comparison, the average world-wide poverty gap ratio is 4 to 5.

Fighting poverty has been recognised as one of the government’s top-priority tasks. Improving the economic situation is regarded as the best way to combat poverty. Moreover, in order to guarantee the subsistence level, the government is also making efforts in two major areas—pensions and social protection. The regional budgets provide for social aid to the poorest groups in the regions.

One of the paramount problems of social development, which the government had to solve in the mid-1990s, was that of pensions. After the republic had gained its independence, the pension system had to be reorganised. Reorganising the pension system was also regarded as a way to make compulsory savings for financing investments. In 1998, a national pension reform, the first of its kind in the CIS was launched in Kazakhstan. It envisaged a switch over from the old solidary distributive system to an obligatory accumulative system. Under the new system, employees contribute 10% of their pay to an individual retirement account with one of the registered pension funds. At present, the pension system has more than 3.5 million contributors, and more than 101 billion tenge have been accumulated. Currently there are 15 savings pension funds, including one state-owned fund, two joint funds, the rest being private. Employees may choose among pension funds. The retirement age is fixed at 63 years for men and 58 years for women. Contributors can replenish their contributions, at any time, which are exempt from taxation.

Pensions:

The pension reform proved to be successful, however, there is still a number of unresolved questions. One of them concerns the statutory basis for the pension funds. There is no special regulatory agency provided for them; like all other financial institutions, they are under the jurisdiction of the Ministry of Finance. Another question concerns the possibility of expanding the system to include unregistered activity. And, finally, there is a question of how the funds will be used and whether they should provide their resources to finance investment projects.

Social insurance:

The key task of the government today is to implement a social insurance programme. Such a programme was recognised as necessary in the light of the rather insignificant medical, unemployment, disability, and survivor’s benefits. The benefits paid were low, and the number of those receiving them was very small. In June 2001, the government passed a resolution on social

4 The data were obtained from the World Bank’s Report on Living Standards in Kazakhstan, July 1996. 5 The poverty line is 38% of the standard of living. This indicator is calculated quarterly by the Statistics Agency. 13 insurance, which was to be followed by the adoption of a law in October. Social insurance will be compulsory and will cover, among other things, the loss of job, disability and the loss of a breadwinner. An agreement was reached on social policy measures, however, the details of the programme still have to be considered. A major issue is the size of grants and benefits. In any case, the project proposed by the government provides for financing only minimum needs, and receiving additional protection through private insurance companies will be encouraged.