# **Figure 1.3 Real Wages (1989=100)**

<!-- Start of picture text --> 120.0 120.00<br>100.0 100.00<br>80.0 80.00 Armenia<br>Azerbaijan<br>CEE Georgia<br>60.0 CIS non CIS-7 60.00 Kyrgyz Republic<br>CIS-7 Moldova<br>40.0 Tajikistan<br>40.00 Uzbekistan<br>20.0<br>20.00<br>0.0<br>-<br>1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001<br><!-- End of picture text --> Source: Unicef TransMONEE database (2002).

O _pen ILO unemployment_ figures are more scarce and very distant from registered unemployment figures. Proper labor force surveys, which allow for measuring ILO unemployment rates, have been very few during the early 1990s and reliable figures started to emerge only after the mid1990s. These showed that ILO unemployment rates are several folds higher than registered unemployment, in fact close to figures observed for CEE countries during the same period. Such a large gap between registered and open unemployment reinforces the hypothesis that registered unemployment figures reflected only the relative value of being registered which was - and still is - generally very low.

Even ILO figures cannot be said to be a proper measure of unemployment in the CIS-7. The ILO itself in its recommendations recognizes that in particular situations when the labor market is very informal and depressed the formal requirements to define the unemployment status may be relaxed. When people are really poor they are obviously forced to do something with their time even if remuneration is equal or below subsistence. The World Bank poverty assessment for Tajikistan, based on a 1999 household survey, found an unemployment rate of 3% and a poverty rate of 98%. It is obvious that very poor people cannot afford to be unemployed, particularly in rural areas which are typically distant from employment exchanges and where some form of under occupation is always possible.

An overview of the main labor market indicators (table 1.5) shows that the Labor Force Participation Rate and the Employment Rate - on average - have decreased during the recession and during the growth period. The exceptions to these trends are Azerbaijan and Moldova which managed to reverse the negative path during the growth period. Unemployment rates remained generally low in all countries with significant increases prevalent during the growth period.

The sharp deterioration of wages and employment also contributed to a sharp rise in _poverty_ while the wild privatization process of the early 1990s and the asymmetric economic performance of different sectors of the economy throughout the 1990s contributed to a surge in _inequality_ . Atkinson and Micklewright (1992) found that poverty was already higher in Central Asia and in the Trans-Caucasus during the Soviet period. Within a few years from the desegregation of the Soviet Union, poverty increased in all countries by two to three folds. Poverty also continued to increase during the first couple of years of the growth period and is only starting from 1999 that downward trends have been observed in almost all the CIS-7. Inequality also followed a similar pattern with 11