New methodology applied to assess poverty in Moldova

At the beginning of December the latest, the Ministry of Economy and Commerce is to present to the Government the indicators of poverty in Moldova for 2006, which are based on a new assessment methodology, described as an improved and more objective one. At a seminar on drafting the National Development Plan, head of the General Department of Macroeconomic Policies and Development Programmes, Natalia Catrinescu stated that the new set of questions proposed to the polled respondents across the country is focused on household consumption rather than on income. According to her, Moldovans feel more comfortable with sharing what they have spent their money on rather than talk about their income. In addition, the wording of the question has been quite different this time. Earlier, the respondents were asked about their expenses on durables, but they used to offer subjective answers. In 2006, a list of goods has been proposed in which the respondents were asked to mark the goods they purchased. It seems that this time, they were more objective, given the more direct way in which the question was put. Catrinescu says that the new way of assessing poverty in Moldova is an opinion poll like any others, so that it was subject to a certain margin of error. The negative part is that the 2006 poverty indicators will be impossible to compare with the indicators obtained earlier, because of the new methodology, Catrinescu mentions. According to her, the international experts who assisted Moldovan specialists in working out the new methodology have confirmed that the indicators are not comparable, given the new approach to assessing poverty. Furthermore, the Ministry of Economy will not be able to use the new data for evaluating the impact of social policies in 2006. Still, the concurrent organisation of the old survey would have implied exaggerated budget costs, Catrinescu mentioned. The cited source affirms that at global level, poverty is being assessed in terms of income per capita, with a poverty threshold of 2.15 dollars per day, but in Moldova, poverty is calculated in terms of consumption because it is often very hard to measure the income. According to the 2006 National Human Development Report, in 2000-2003 economic growth was strongly connected to the decline of the poverty rate, which had decreased from 67.8% to 29%. However, in 2004 this correlation weakened: the share of the poor decreased by only 2.5 percentage points, while the poverty rate in rural areas increased. In 2005, this connection has practically disappeared: despite increased production, poverty extended. 25% of the respondents polled for the report said that in the last 5 years they have become poorer or much poorer. According to the experts, poverty reduction in Moldova has been determined mostly by the remittances from abroad, which, at the same time, gave an impulse to the economic growth. The Government and its international partners acknowledged that the improvement of the quality and the pace of economic growth in Moldova will be decisive in ensuring poverty reduction.