Mr. Chairman, Governors, honored guests, it is a pleasure to welcome you to these meetings on behalf of the International Monetary Fund. I would also like to extend a special welcome to my friend and colleague Bob Zoellick, and to thank him for his inspiring speech. Bob’s words make it clear that the Fund and the Bank are united by a common purpose—to serve the interests of the people of our member countries—and also a common commitment to reform. Welcome Bob.
This Joint Staff Advisory Note discusses the Poverty Reduction Strategy Progress (PRSP) Reports for Serbia and Montenegro. Although the strong economic growth in recent years in Serbia has improved average living standards, the reports note that its impact on poverty reduction remains inconclusive. The increases in real wages and pensions have boosted household incomes and consumption, according to the national accounts statistics. There are growing regional disparities, with Belgrade increasing its advantage over the rest of the country.
Emerging Europe has undergone a major economic transformation over the past 25 years. Most countries experienced initial drops in output during transition, followed by recovery in the second half of the 1990s. The path of transition in the Western Balkans has however been particularly uneven. The effects of transition also seem to have been more traumatic and persistent in the Western Balkans, and nostalgia for the past appears to be more prevalent here than in other former communist regions. Such dissatisfaction has important implications for the political economy of further reforms. This paper aims to inform policy by complementing the analysis of standard macro-level measures of inequality and poverty with a household-level analysis of subjective perceptions of poverty. We find that many more people appear to feel poor than are classified as such using purely income-based measures. Uncertainty, in particular related to expectations of future income and vulnerability to shocks, appears to be a key driver behind this discrepancy.
Mr. Chairman, Governors, and Distinguished Guests: I am pleased to welcome you to our Annual Meetings. I would like to express my special appreciation to our Chairman, Karim Djoudi, for these meetings and to Augustón Carstens, for his leadership of the Development Committee, as well as for his fine counsel as I assumed this new post.