Tirana has also experienced a sizeable increase in poverty. The percentage of the population considered as poor has gone from 8.7 percent in 2008 to 12.6 percent in 2012
TIRANA, Sept. 16 – Albania’s poverty rate has increased by 2 percent or around 29,000 people in the past four years as the country’s GDP growth rate dropped to an average of 3 percent down from 6 percent annually in the pre-crisis years. The results are confirmed in a recent living standard measurement survey conducted by Albania’s state Institute of Statistics and the World Bank.
The survey carried out in September-October 2012 on around 6,670 households nationwide showed the number of people who live below the poverty line in Albania rose by around 2 percent to 14.3 percent in the past four crisis years. “The fraction of the population whose real per capita monthly consumption is below Lek 4,891 (Euro 34.6, USD 46) increased from 12.4 percent in 2008 to 14.3 percent in 2012. In the previous years, poverty fell from 25.4 percent in 2002 to 18.5 percent in 2005 and 12.4 percent in 2008. This means that roughly 28,896 people in addition to 373,137 poor people in 2008 fell into poverty. Extremely poor population, defined as those with difficulty meeting basic nutritional needs, increased from 1.2 percent in 2008 to 2.2 percent in 2012. Extreme poverty decreased from 4.7 percent in 2002 to 3.5 percent in 2005 to 1.2 percent in 2008. In 2012, extreme poverty has increased for both urban (2.2 percent) and rural areas (2.3 percent),” says the survey.
Introducing the findings of the survey INSTAT director Ines Nurja blamed the Eurozone crisis for the increase in poverty rates.
“The global crisis including neighbouring countries such as Greece and Italy where there is a big number of Albanians has mainly influenced on the reduction of remittances to their households in Albania, a phenomenon which had reduced poverty rates in Albania since years,” said INSTAT’s director Ines Nurja.
Italy and Greece where around 1 million Albanian migrants live and work remain Albania’s top trade partners and key sources of remittances despite the ongoing recession. Migrant remittances whose overwhelming majority comes from neighboring Greece and Italy being a vital source for thousands of families in Albania, dropped by 30 percent from 2007 to 2012.
In the previous years, poverty fell from 25.4 percent in 2002 to 18.5 percent in 2005 and 12.4 percent in 2008.
Introducing the government programme in Parliament last weekend, Prime Minister Edi Rama also commented on the findings of INSTAT’s survey, saying the truth is much bitter than the extra 30,000 people INSTAT reports as falling below the poverty line.
Regional poverty
Increased poverty has been accompanied by increases of regional poverty. Unlike 2008 in which the mountain areas were the only ones with a slight increase in poverty, in 2012 the mountain areas are those who have had poverty reduction. In these areas poverty has been reduced from 26.6 percent in 2008 to 15.3 percent in 2012. Nonetheless, this reduction may be as a result of population shifts and continuation of movements from mountain areas to the rest of the regions. Consequently, the other regions may share the burden of these movements among other things and therefore experience an overall increase in poverty. For instance, in the coastal areas, which have the largest increase in poverty, 17.6 percent of the population is poor compared to 13 percent in 2008. Tirana has also experienced a sizeable increase in poverty. Compared to 2008, the percentage of the population considered as poor has gone from 8.7 percent in 2008 to 12.6 percent in 2012. The Central areas have broadly remained in a similar situation. Poverty has slightly increased from 10.7 percent in 2008 to 12.5 percent in 2012.
Poverty by prefectures, which is a new addition to living standard measurement survey 2012, shows that Elbasan and Gjirokast철have the lowers poverty rates, while Kuk쳠has the highest poverty rate among the prefectures. Poverty rates are 10.7 percent in Elbasan and Gjirokast첬 while they reach 21.8 percent in Kuk쳮 In addition, other prefectures such as Berat, Dib첬 Kor諬 and Vlor롨ave lower poverty rates compared to the national average. Other prefectures such as Lezh롡nd Shkod철have higher poverty rates respectively 17.5 percent and 15.7 percent. Tirana prefecture, has a poverty rate close to that of the national average, 14.2 percent. Other prefectures like Durr쳠and Fier show higher rates of poverty; 16.2 percent in Durres, and 17.5 percent in Fier in comparison with the national average.
Not only a rural issue
The survey also unveiled poverty is no longer solely a rural issue. There has been a shift of poverty from rural to urban areas, where the latter have had a larger increase in poverty. This may have come as a result of more concentrated efforts towards rural development, while population shifts may have continued from rural to urban areas and the crisis aftermath has mainly impacted the urban areas.
While rural population in poverty declined by about 12 percent, urban population in poverty increased by about 37 percent. Therefore, headcount measure of rural poverty increased from 14.6 percent in 2008 to 15.3 percent in 2012, while urban headcount increased from 10.1 percent to 13.6 percent. Moreover, even within rural areas, the rate of poverty has been significantly reduced in the mountain areas. Poverty appears to have a wider spread than 2008 and is no longer concentrated in the rural mountain areas. Other measures of poverty maintain similar rates of change as those depicted above in the urban and rural areas. Poverty gap (depth of poverty) measure is similar for rural and urban areas. However, urban areas have had a substantial increase in poverty gap. In the rural areas this measure is 3.0 percent, compared to 2.9 percent in urban areas; for rural areas, this is an increase of about 15 percent from the 2008 level, while for urban areas it was an increase of about 53 percent.
The latest population census in 2011 showed the resident population shrunk by 7.7 percent to 2.8 million people in the past decade.
Lower spending on non-food, education, durables
Increases in poverty have been associated with increased shares of food and utility consumption, and decreased shares of non-food, education, and durables. Per capita real consumption in 2012 (with 2002 prices) has decreased from 9,731 Lek in 2008 to 8,939 Lek in 2012. As a share of total per capita consumption, food shares have increased by 1.04 percent between 2008 and 2012. The decrease in the education expenditures, shares of real per capita consumption in 2012, and increase in food shares of real per capita consumption are quite common occurrences when poverty increases. Once consumption falls, food shares of per capita consumption are expected to increase since individuals will substitute towards food and away from other activities, says the survey.
Unemployment and Poverty
Albania’s strong economic performance prior to 2008 was accompanied by positive changes in employment and a strong reduction in poverty rates. Between 2002 and 2008, the unemployment rate decreased from approximately 17 to 12.8 percent, and the poverty headcount rate decreased from 25.4 to 12.4 percent, equivalent to 200,000 people lifted out of poverty during this period. The reduction in poverty was particularly dramatic in rural areas, where the poverty headcount fell from 39.6 percent in 2002 to 14.6 percent in 2008. Growth accounted for most of the reduction in the poverty rate during the 2002-05 period, and contributed 3.7 points to a 6.1 percentage point reduction in the poverty headcount during 2005-08. Inequality also decreased during that period, as individuals in the lower percentiles of the distribution experienced higher income growth rates than others. The extremely poor population, defined as those with difficulty meeting basic nutritional needs, decreased from about 5 percent in 2002 to 3.5 percent in 2005, and to 1.2 percent in 2008.
