The FINANCIAL — On 3 November 2011, the Minister of Finance, Dimitri Kumisishvili, in his talk about the country’s economic indicators, emphasized the situation in regard to poverty. Mr Kumsishvili stated: “In 2012, the poverty rate was nearly 29%, whilst we reduced it to 21%. Even though 500,000 individuals have moved out of poverty, 700,000 people still lie below the poverty line. This, of course, remains as our country’s biggest challenge.”
FactCheck verified the accuracy of the Minister of Finance’s statement.
According to absolute poverty figures, in 2012, 28.9% of Georgia’s population was below the poverty line. In the period of 2011-2015, absolute poverty figure has been declining annually. However, in 2016, the amount of people who live below the absolute poverty line, has increased by 0.5 percentage points (see graph 1). Of note is that the rate of poverty is especially high in rural areas. As of 2016, 25.5% of rural population lives in poverty, whilst in urban areas that figure constitutes 16.9%.
The National Statistics Office of Georgia published the preliminary figures of absolute poverty in 2017. The methodology of absolute poverty is based on World Bank’s basic needs method. The poverty line is defined by taking into consideration population’s incomes and expenses, corresponding to minimum subsistence level.
The National Statistics Office of Georgia does not publish the amount of poor people in the country. Therefore, it is impossible to say precisely how many people live in poverty today. If we compare the percentage of poverty with total amount of population, we will see that in as of 2016, approximately 790,000 individuals were living in poverty. The National Statistics Office of Georgia clarified that for calculation of absolute poverty figures the results of 2014 universal public census were used. In calculation of every year’s figures, the amount of population was indicated to be nearly 3.7 million. If we take the 2014 universal public census results into account for calculation the 2012 poverty figures, we will see that approximately 1,070,000 individuals were living in poverty. Therefore, the number of people living in poverty has been dropped by approximately 280,000. If do not take into account the results of universal public census, the aforementioned number will be 500,000. However, not taking the results of the universal public census into account, is inappropriate.
Conclusion
In 2012, 28.9% of Georgia’s population was living in poverty, whilst in 2016 that figure dropped to 21.3%. The trend of decreasing poverty started in 2011 and poverty rate has been reduced annually in the period of 2011-2015. In 2016 poverty rate increased by 0.5 percentage points.
Even though Dimitri Kumsishvili has correctly named the poverty figures and underlined the fact that poverty remains the most important challenge for Georgia, he has ignored the fact that poverty rate did increase in 2016. Additionally, when the Minister says that 500,000 people have moved out of poverty, he does not take the results of the universal public census into account, whilst the census numbers are used for calculation of absolute poverty numbers (including the figures of the previous years). In reality, that number is approximately 280,000.
FactCheck concludes that Dimitri Kumsishvili’s statement is HALF TRUE.
Discussion about this post