Asad Alam

The past two decades in Eastern Europe and the former Soviet Union have been times of tremendous change, with countries undergoing rapid transformation from centrally-planned to market-oriented economies. While poverty increased during the initial years of transition, primarily on account of the sharp economic contraction, the resurgence of economic growth in the region since 1998 has resulted in a rebound in household incomes and living standards. ""Data from the 2006 Life in Transition Survey (LiTS)"" - a joint initiative of the European Bank for Reconstruction and Development and the World Bank - provides a unique opportunity to investigate the extent to which citizens of ECA countries are satisfied with their lives and with the performances of their governments, and to study key factors influencing their outlook in a systematic way across all countries of the region. The main objective of the ""LiTS"" was to assess the impact of transition on people, covering four main themes. First, it collected personal information on aspects of material well-being, including household expenditures, possession of consumer goods such as a car or mobile phone, and access to local public services and utilities. Second, the survey included measures of satisfaction and attitudes towards economic and political reforms as well as public service delivery. Third, the ""LiTS"" captured individual histories - key events and episodes that may have influenced their attitudes towards reforms, and information on family background, employment, and coping strategies. Finally, the survey also attempted to capture the extent to which crime and corruption are affecting peoples' lives, and the extent to which individuals' trust in other people and in state institutions has changed over time.

The countries of the Eastern Europe and Central Asia region have made significant progress in reducing poverty in the past five years. More than 40 million people moved out of poverty during 1998-03. Much of this poverty reduction derives from the growth rebound in the CIS countries. But poverty and vulnerability still remain a significant problem. More than 60 million are poor and more than 150 million are vulnerable. Most of the poor are the working poor. Many others face deprivations in terms of access and quality of public services. Regional inequalities both between and within countries are large. The highest levels of absolute poverty are found in the poor countries of Central Asia and the South Caucasus, but most of the region's poor and vulnerable are in middle income countries. Notwithstanding the tremendous heterogeneity among countries in the region, reducing poverty and vulnerability requires an acceleration of shared growth across the region. If this is to be achieved, public policies need to focus on at least three areas common to all countries: fostering job creation and raising productivity, improving public service delivery, and addressing spatial inequalities. Within each of these areas, recommendations need to be tailored to country-specific circumstances.