Contents -- Foreword -- Acknowledgments -- Acronyms and Abbreviations -- Overview -- Trends in Poverty in the Region, 1998-2003 -- Factors Contributing to Poverty Reduction, 1998-2003 -- Nonincome Dimensions of Well-Being, 1998-2003 -- Prospects for Poverty Reduction -- The Role for Public Policy -- Conclusions -- 1. Nature and Evolution of Poverty, 1998-2003 -- Introduction -- Consumption Poverty -- Poverty in Nonincome Dimensions -- Conclusions -- 2. How Has Poverty Responded to Growth? -- Growth and Poverty Reduction -- Growth Elasticities, or, How Responsive Is Poverty Reduction to Growth? -- Changes in Distribution, What Happened and Why -- The Relative Shares of Growth and Changes in Distribution in Poverty Reduction -- Rural-Urban and Other Subnational Differences in Poverty Reduction -- Conclusions -- 3. The Role of Labor Markets and Safety Nets -- How the Poor Can Connect to Growth -- Economic Opportunities Have Expanded -- The Poor Took Advantage of New Opportunities -- Why Are Many Workers in the Region Still Poor? -- Conclusions and Policy Recommendations -- 4. Affordable Access to Quality Services -- Education -- Access to, and Affordability of, Health Services -- Energy and Other Utility Services -- Conclusions -- 5. Prospects for Poverty Reduction -- Alternative Scenarios for Growth, Poverty Reduction, and Inequality -- Patterns of Growth: Implications for Growth and Inequality -- The Role for Public Policy -- Conclusions -- Appendix -- A. Data and Methodology -- B. Key Poverty Indicators -- Bibliography -- Index -- Boxes -- 1 Using Purchasing Power Parity to Measure Poverty -- 2 Nonincome Dimensions of Poverty and Millennium Development Goals in the Region -- 3 Data for This Report: The World Bank's ECA Household Survey Archive -- 1.1 What Is an Appropriate Poverty Line for the Region?.

1.2 What Would Someone in the Region Living on Two Dollars a Day Consume? -- 1.3 National Poverty Assessments Confirm Poverty Trends Based on International Poverty Lines -- 1.4 Vulnerable Groups and Poverty: Roma, IDPs, and Institutionalized Populations -- 1.5 Life Satisfaction in the Region Remains Low -- 3.1 In Most Countries, Household Survey Data Report Higher Employment Figures than ILO Statistics -- 3.2 The Role of Agriculture in Transition -- 3.3 The Role of Remittances in the Region -- 3.4 Improvements in Targeting: Lessons from Recent Policy Reforms -- 3.5 Global Trends in the Number of Working Poor -- 3.6 Informal Employment in Transition Economies -- 3.7 Labor Market Study Discusses Ways to Enhance Job Opportunities in the Region -- 3.8 Raising Agricultural Productivity -- 4.1 Survey Data Provide Limited Information about Access to, and Quality and Affordability of, Utilities -- 4.2 What Has Happened with District Heating? -- 4.3 Electricity and Water Tariffs Remain below Benchmarks for Full-Cost Recovery -- 5.1 EU Accession and Poverty Reduction Objectives -- 5.2 Depleted Social Capital of the Poor Limits Opportunities -- 5.3 Nonincome Dimensions of Poverty and Achieving the MDGs in the Region -- Figures -- 1 More than 40 Million People Moved out of Poverty during 1998-2003 -- 2 At the Country Level, Absolute Poverty Has Declined Almost Everywhere -- 3 The Lowest National Poverty Line in the Region Is around Two Dollars a Day -- 4a Children Face a Greater Risk of Poverty than Other Population Groups -- in Most Cases, This Risk Has Increased over Time -- 4b Poverty Reduction in Secondary Cities and Rural Areas Has Lagged behind Capital Cities -- 4c The Unemployed Face Higher Risks of Poverty than the Employed -- This Risk Has Grown over Time in the CIS.

4d There Are Marked, and in Some Cases Increasing, Differences in Poverty across Regions -- 5 Working Adults and Children Continue to Form the Bulk of the Poor in the Region -- 6 In Some Countries, Poverty Is Shallow -- in Others, Deep -- 7 While Changes in Distribution Have Gone Either Way in the EU-8 and SEE, They Have Moved in Favor of the Poor in the CIS -- 8 Since 1999, Growth Rates in the Region Have Been High, with the CIS the Most Rapidly Growing Subregion -- 9 Employment-to-Population Ratios Are Well below Lisbon Targets (70 percent) in the EU-8 and SEE and Often Trending in the Wrong Direction -- 10 The Poor Have Benefited More than the Rich from the Growth Rebound in the CIS -- 11 The Share of Growth in Poverty Reduction Is Dominant across All Regional Subgroups -- 12 Access to Secondary Education Has Gone Up Virtually throughout the Region, but Some Countries Continue to Struggle to Arrest the Decline in Primary Enrollment Rates -- 13 Hospital Utilization Rates Have Recovered, but Remain at Low Levels in Parts of the Low Income CIS Group -- 14 The Poor Make Greater Use of So-Called Dirty Fuels for Heating -- 15 In the Low Income CIS Countries, the Reliability of Water Supply Is Low and Shows Little Improvement -- 16 Household Expenditures on Utilities Have Increased -- 17 Growth Will Move an Additional 21 Million People out of Poverty by 2007, but 40 Million Will Remain Absolutely Poor and More Than 100 Million Vulnerable to Poverty -- 1.1 More Than 40 Million People Moved out of Poverty during 1998-2003 -- 1.2 Poverty Incidence Varies across Countries in the Region, around 2003 -- 1.3 Poverty Depth in the Region, 1998-2003 -- 1.4 Levels and Changes in Poverty by Employment Status, 1998 to 2003 -- 1.5 Change in Poverty by Education for Representative Countries -- 1.6 Capital Cities Gained More than Other Cities and Rural Areas, 1998-2003.

1.7 Variation of Poverty Risks by Regions, 1998/9-2002/3 -- 1.8 Changes in Poverty by Age, Relative to National Average -- 1.9 The Poor in the Region around 2003 -- 1.10 Most Nonworking Poor Live in Households Where Someone Works -- 1.11 Life Expectancy at Birth, 1990-2003 -- 1.12 Incidence of Tuberculosis, 1990-2003 -- 1.13 Poverty in the Dimensions of Consumption, Access to Water, and Health -- 2.1 Since 1999, Growth Rates in the Region Have Been Higher than the World Average -- 2.2 Growth Has Been Accompanied by Poverty Reduction -- 2.3 The Poor Have Benefited More than the Rich from the Growth Rebound in the CIS -- 2.4 Poverty Is More Responsive to Growth, the Higher the Level of Income and the Lower the Level of Inequality -- 2.5 Distribution Has Moved in Favor of the Poor in Most CIS Countries -- 2.6 "Decomposition" of Inequality Does Not Explain Declines in Most CIS Countries -- 2.7 Share of Growth in Poverty Reduction Is Dominant across All Regional Subgroups -- 2.8 Increase in the Ratio of Rural to Urban Poverty in Most Countries -- 2.9 Urban Poverty Is More Responsive to Growth and Falling (or Rising) More Rapidly than Rural Poverty -- 2.10 Partial Elasticity of Poverty Reduction to Growth Is Lower in Rural Areas -- 3.1 Connecting the Growth to the Poor -- 3.2 Real Wage Growth Typically Outpaced Net Employment Growth in Transition Economies -- 3.3 The Structure of Employment Has Changed -- 3.4 Employment in Service Sector Expanding -- in Agriculture, Mixed -- 3.5 Value Added per Worker Is Lowest in Agriculture -- 3.6 Real Wage Changes Correlate with Poverty Changes -- 3.7 Poor Gained from Real Wage Gains in SEE and the CIS -- 3.8 Changes in Employment Rate, 1998-2002, by Quintiles for Selected Countries -- 3.9 Safety Nets Cover Many Poor in the Region -- 3.10 Sectoral Wage Employment for the Poor and Nonpoor in Selected Countries.

3.11 Large Wage Gap between Poor and Nonpoor Persists across the Region -- 3.12 Productivity Distribution of Old, Restructured, and New Enterprises -- 3.13 Wage Increases Outstripped Productivity Gains during the Economic Recovery in the Region -- 4.1 MDGs in the Region: Infant Mortality and TB Incidence -- 4.2 Regional Coverage of Education, Ages 7-14 -- 4.3 Inequality in Access to Primary Education in the Region, 1998-2002 -- 4.4 Regional Coverage of Education, Ages 15-17 -- 4.5 Inequality in Access to Secondary Education, 1998-2002 -- 4.6 Gender Inequality in Access to Secondary Education, 1998-2002 -- 4.7 Recent Declining Trends in Regional Mathematics Performance (TIMSS) -- 4.8 Mathematics Performance in Selected Countries of the Region, 1999-2003 -- 4.9 Role of Subnational Governments in Education, 1995-2002 -- 4.10 Aging Teaching Force in the Region, 1995-2003 -- 4.11 Cervical Cancer in the Region and Western Europe, 1970-2002 -- 4.12 Hospital Utilization -- 4.13 Utilization Rates of Health Services by Quintiles -- 4.14 Ratio of Out-of-Pocket Health Spending to Household Total Consumption, 1998-2003 -- 4.15 Health Insurance and Utilization in Armenia, 2001 -- 4.16 Reliability of Electricity in the Region in the Early 2000s -- 4.17 The Deterioration in Water Provision in Tajikistan and Moldova -- 4.18 Household Expenditure Shares for Electricity, Heating, Water, and Sewerage Have Increased from 1998 to 2002/2003 -- 4.19 Electricity Payments Are a Larger Share of Household Expenditures for Poor Households (Quintile 1) than for Rich Households (Quintile 5) -- 4.20 Poor Households Are Less Likely than Rich Ones to Use Clean Fuels -- 5.1 Population of the Region by Poverty Status, 1990-2002, and Outlook for 2007 -- 5.2 Trends from Global Projections -- Tables.

1 Transfer Payments for Social Protection Have Had an Important Role to Play in Reducing Poverty outside of the Low Income CIS Countries.