Bulgaria: Studies highlight rising poverty in households

Bulgaria is Europe’s poorest country, according to a report by Catholic charity Caritas, which asserts that almost one-half of Bulgarians (48%) are living in poverty. Another study by the think-tank IME claims that domestic policies fail to effectively target those most in need in Bulgaria.

Background

The European Union, in its Joint report on social inclusion 2004, defines poverty as having income and resources so inadequate as to be excluded from a standard of living considered acceptable in the society in which they live (1.19 MB PDF).

The Caritas Europa Crisis monitoring report 2015, published in February, says Bulgaria has the highest levels of poverty. Close to half its people (48%) fit the EU definition of poverty. Other EU countries with high poverty levels are Romania (40.4%), Greece (35.7%), Latvia (35.1%) and Hungary (33.5%). According to the report, 123 million of Europe’s citizens – one quarter – are in poverty and this number is rising.

The Caritas report was followed by a study from a Bulgarian think-tank, the Institute for Market Economics (IME), which examines poverty and social exclusion in Bulgaria (in Bulgarian, 1.04 MB PDF).

The IME report says the groups at greatest risk of deep poverty in Bulgaria are children, the economically inactive and the unemployed. Half of all unemployed people are at risk of falling into poverty, and a third are at risk of falling into 'deep' poverty. The largest group among those living below the poverty line are pensioners; the study estimated that 440,000 retired people fall into this category.

IME classifies several levels of poverty. ‘Classic poverty’ is said to include those living on less than 60% of average household income, and ‘deep poverty’ describes those living on less than 40%.

Some 1.5 million Bulgarians live on less than 60% of the average household income. Just under half of these, 675,000, live on less than 40% of the average household income. Of these, 205,000 are children and 300,000 are unemployed or economically inactive adults. The study also shows that more than 300,000 children and young people under the age of 18 live on less than BGN 150 (€77) per month and more than 200,000 live on less than BGN 100 (£51) per month. The number of people living in deep poverty has risen from 8.5% of Bulgarians in 2008–2009 to 10% in 2012–2013.

Causes and recommendations

The IME says the biggest causes of deep poverty in Bulgaria are a lack of education and low wages. When the unemployed do manage to get work, they are paid on average only 18.4% more than they would receive on welfare benefits.

At the beginning of 2015, the Deputy Prime Minister and Social Minister Ivaylo Kalfin reported that entire regions of the country rely on social assistance. In a report by Germany’s international broadcaster DW, he said people had no incentive to work (in Bulgarian) 'because the net minimum wage is too low. This does not encourage the unemployed to search for work’ . 

The IME report adds that some programmes aimed at combating poverty are erratic and do not address the genuinely poor. It criticises the ‘Supporting families with children’ programme for giving equal assistance to all instead of on the basis of social or financial status, or targeting particularly troubled regions. This programme and the ‘Monthly allowance for social integration’ programme reach less than half (40%) of the poorest 20% of households.

However, in another report about the challenges of social welfare in Bulgaria, the IME praises a programme that provides help with household heating (in Bulgarian, 1.9 MB PDF) because it reaches two thirds (66.8%) of the poorest 20% of households. It also recommends that social insurance contributions should not be linked to the minimum statutory wage.

The study adds that, despite the help of EU funds, Bulgarian social and economic policies have not succeeded in reducing poverty or inequality, and have not achieved 'sustainable economic growth, boosted employment, increased income and promoted social inclusion'. It calls for policies to encourage employment and to target help more effectively to households in poverty.

 

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