Introduction
Poverty eradication is an issue of global concern, even forming one of the millennium development goals (MDGs). Factors such as socioeconomic status, vulnerability, income levels and consumption rates are the major indicators of poverty in a society. In economic terms, income poverty describes a situation where the average family income falls below an established international threshold (Kaldor & Vejvoda, 2002). This threshold is set at one dollar a day.
Poverty can also be described in absolute or relative terms. Relative poverty measures poverty based on the economic status of others in the prevailing societal context. In contrast, absolute poverty defines poverty in terms of financial resources available to meet basic human needs.
Poverty as an issue relates to the challenges of social integration of people in a society. This paper examines the poverty and poverty indicators in Romania, the social development trends (based on available statistics) and the social integration efforts in terms of poverty eradication. The policies implemented by the Romanian government to eradicate poverty and promote social integration will also be analyzed.
Case Study: Poverty in Romania
Over the past two decades, economic globalization has raised poverty levels in Romania and increased poverty associated problems, especially in the urban areas. The disintegration of the Eastern trading bloc and the fall of the communist economic system in 1989 had implications on Romania’s economic, social and political development (Kaldor & Vejvoda, 2002).
Since then, the country has faced challenges in transitioning to a market economy. The economic reform has only increased social exclusion and marginalization of people, particularly in rural areas (Zamfir, 2001). This has increased poverty in some parts of the country leading to social distress.
The government of Romania uses two measures of poverty to estimate the level of poverty in the country: absolute and relative poverty measures. The absolute method relies on the national poverty monitoring system developed in 2002 by the government (Zamfir, 2001).
On the other hand, the relative measure is based on the 2001 Laeken European Council method that allows comparative evaluation of member countries’ progress towards achieving set EU goals of poverty eradication (Zamfir, 2001). Though there has been a significant decline in absolute poverty in Romania in the last decade, the benefits of the new economic growth are yet to reach certain regions of the country.
Figure 1. Absolute poverty in Romania (2003-2009).
Source: Tesliuc & Filofteia (2003, p.24)
Romania’s poverty can be looked at from three different perspectives: governmental (policy), demographic and economic perspectives (Tesliuc & Filofteia, 2003).
From an economic perspective, poverty is caused by the recession, which affects the labor market and consumption rates in the country.
In times of economic recession, poverty may be triggered by income shock and a decline in household income that arises due to increase in unemployment rates (Tesliuc & Filofteia, 2003). This type of poverty is called temporary poverty as family income may increase when the economy recovers and people get jobs. In Romania, 33% of the poor live in temporary poverty (Tesliuc & Filofteia, 2003).
The unemployment rates declined to 4.9% as of May 2013, from 5.6% reported last year. However, Romania’s unemployment still ranks among the highest in Eastern Europe. The high unemployment rate is attributed to massive layoffs of workers from state-owned textile and metal processing industries.
The unemployment rate is highest in Northern Romania, where over a third of the layoffs and closure of manufacturing plants have taken place (Zamfir, 2001). The high unemployment rate has led to a steep decline in real wages in Romania.
When examined from a demographic dimension, poverty in Romania can be associated with factors such as gender, age, literacy level, number of children per household and ethnicity (Carey, 2004). A high risk of being poor is found among single-parenting households and large families (five or more family members). With regard to age, the risk of poverty is high among the youth (15-24 years).
Also, women and women-headed households are not only vulnerable but also experience a higher poverty risk compared to men due to the low pensions given to widows (Zamfir, 2001). The educational level is another important determinant of poverty in Romania. Most the Romanian’s poor have primary or secondary-level qualifications (Carey, 2004). Thus, educational level increased the risk of poverty in Romania.
As stated earlier, the transition to a market economy generated not only poverty but also welfare issues. The economic and political framework could not take up the entire workforce resulting in unemployment and poor pay for workers. This generated poverty. Romanian’s poverty also has a regional dimension.
The poverty rate varies across the different regions with the North-Eastern region having the highest rate of 47% compared to the national average of 40% (Zamfir, 2001).
The North-Eastern region also has the highest rate of extreme poverty at 30%. In contrast, major cities like Bucharest has the lowest poverty rate. The disparities in poverty rates between urban and rural regions are measured based on the availability of essential services in these areas, as shown in table 2 below.
Table 2. Poverty by region
Source: Tesliuc & Filofteia (2003, p.12)
Romania’s Poverty Reduction Approaches
The Romanian government’s poverty alleviation efforts involve different strategies that try to create employment and increase income to Romanians. Thus, the government’s primary approach towards poverty reduction is by increasing people’s access to financial resources.
Other strategies target non-monetary resources that help people to generate wealth in the long-term. In light of this, the poverty alleviation efforts focus on education and literacy levels as well as the environment and healthcare sectors.
Since 1990, the Romanian government has pursued a number of poverty reduction strategies. The government adopted three strategies to combat poverty in the country. The first initiative involved the reduction of poverty among the Roma minority through the Romanian Government Strategy for Roma People (2001-2010) (Alan & Allen, 2000).
The aim of this approach was to promote the economic status of Romanians through the implementation of measures and programs that target the health, educational and social sectors. Other areas of action included justice, leadership, social security and child protection (Alan & Allen, 2000).
To achieve this, the government created state and county institutions to aid in the implementation of the strategies. In 2005, a central agency, the National Agency for Roma was established to co-ordinate the strategy activities. Also, County offices were created to organize, plan and evaluate the specific strategy activities meant to promote the economic status of the people.
A second government strategy is the National Anti-poverty plan (2002-2012) (Alan & Allen, 2000). This approach aims at promoting the social status of the Roma people. It targets property and housing, health, economy, public administration and education sectors. One of the action areas for this strategy includes support services for Roma minority (the poor), children and the unemployed.
It also aims to reduce discrimination and enhance social inclusion in Romania. The third government approach is the Joint Social Inclusion Memorandum policy (Alan & Allen, 2000).
This policy focuses on educational areas such as increasing school enrollment at primary, secondary and tertiary institutions; promoting social development at community level; and enhancing employability of Roma people through vocational training.
Another strategy is the Decade of Roma Inclusion (2005-2015), which facilitates affirmative action for Roma students in learning institutions (Surdu & Szira, 2009). It aims at bridging the socioeconomic gap between Roma people and Eastern Europe citizens.
The decline in absolute poverty from 35.9% in 2003 to its current rate is attributed to the strategies implemented by the government. Roma education has improved greatly over the past few years with increased school attendance.
Over 300 Roma teachers have been trained at university between 2005 and 2009 and posted to various community schools (United Nations Educational, Scientific and Cultural Organization [UNESCO], 2010). The statistical data also show improvements in health and social facilities to marginalized areas.
Access to health and social services among the Roma minority increased by 31% between 2005 and 2009 (Fleck & Rughiniș, 2008), which adds to the government’s achievements.
In counties such as Bihor, non-governmental organizations that are supported by the government offer accredited social services to the people (Fleck & Rughiniș, 2008). Such services include support for orphans, the handicapped and the elderly through the Child Allowances and Assistance scheme.
The findings from this analysis show that the government poverty alleviation strategies contributed greatly towards poverty reduction. However, in my opinion, the government should promote more public investments in projects that target the poorest households.
Mechanisms that channel resources to the poor regions will help bridge the disparity between urban and rural Roma people. The current strategies only aim to spur economic growth and improve literacy levels; however, by directing more resources to the poorest households, the level of absolute poverty will decline greatly.
Recommended Poverty alleviation Approaches
A sustained economic growth is important in poverty reduction in Romania as it creates employment opportunities for the unemployed and increases income for households.
This paper recommends efficient monetary policies, privatization of state-owned corporations, market price liberalization and improvement in social services as effective approaches that the government should adopt to reduce poverty and promote social integration. In rural areas, which have the highest poverty rates, a reform of the agricultural sector is necessary.
The reform should encompass increased participation of the private sector in trade (distribution and processing) and land development. This will stimulate agricultural growth among farming communities, increase household incomes and help reduce absolute poverty in the rural areas.
A second approach the government should adopt involves the protection of the poor through social assistance programs. In 1995, the Romanian government initiated a social assistance scheme to help the rural poor and the unemployed. However, this scheme did not effectively target the poorest households. The following two proposals can enhance the effectiveness of this program in alleviating rural poverty.
Firstly, effective monitoring mechanisms of the social assistance program will facilitate proper identification of eligible people. In this way, the poverty incidence rate in the poorest regions will dramatically reduce. Secondly, the social assistance scheme, particularly the Child Allowances program should be revised to include children not currently enrolled in schools.
In most rural areas, the enrollment rates of poor children are very low. Thus, by expanding the discretionary scheme to include children not currently enrolled in schools, the effectiveness and efficiency of this scheme in terms of targeting deserving people will improve.
Another approach the Romanian government should consider implementing concerns the non-governmental organizations and the civil society. The government should expand its networks and partnerships with international, national and regional non-profit agencies.
Such linkages will facilitate joint implementation of poverty eradication programs in health, social services and education sectors. Some donor-funded NGOs offer services such as housing and essential services that target the poorest groups. Other NGOs work to reintegrate marginalized groups, help the unemployed and offer vocational training to poor children.
Conclusion
Over the past two decades, several economic changes have occurred in Romania to try and reduce the high poverty incidence rate. Since 1991, official fiscal policies have focused on improving education among the Roma minority, stimulating economic growth, creating jobs and improving the welfare of Romanian citizens.
The analysis of the government poverty alleviation strategies has shown that the current framework is largely effective. However, some challenges still exist, especially with regard to transfer of funds to the poor through the social assistance scheme. Efficient transfer systems, enhanced NGO participation and agricultural reforms are some of the recommended ways the Romanian government can reduce poverty.
References
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Carey, H. (2004). Romania Since 1989: Politics, Economics, and Society. New York: Lexington Books.
Kaldor, M., & Vejvoda, I. (2002). Democratization in Central and Eastern Europe. New York: Continuum International Publishing Group.
Surdu, M., & Szira, J. (2009). Analysis of the impact of affirmative action for Roma in highschools, vocational schools and universities. Web.
Tesliuc, E., & Filofteia, L. (2003). Poverty in Romania: Profile and Trends during the 1995-2002, Romania. Washington, DC: World Bank Report.
United Nations Educational, Scientific and Cultural Organization [UNESCO], (2008). Romania. National Report on the Development and State of the Art of Adult Learning and Education. Web.
Zamfir, C. (2001). Poverty in Romania, Dimensions, Sources and Groups in Vulnerability. Revistă de cultură şi anală socială, 2(3), 67-72.