13 unreported poor, while incomes are highly underreported.” Thus, somewhat ironically, both an improvement (better surveys) and a deterioration in statistical practices (greater underreporting) combine to push the poverty rates up.

However, even after some adjustments are made, e.g. “blowing up" the reported household incomes by the macro data (whose downward bias is less), or by using expenditures rather than incomes—the poverty rates in 1993-94 are higher than they were before the transition for all the countries.

Table 2 shows poverty estimates using a single poverty line ($ 120 per capita per month at 1990 international prices).”* By using the same line, we can compare poverty in a given country through time, and poverty between the countries. This poverty line is 4 times higher than the World Bank absolute poverty line. It is, however, only % of the US and Germany’s poverty lines.”” For all the transition economies as a whole, the poverty headcount has increased from about 4 percent or 15 million people to (conservatively estimated) about a third of the population or more than 100 million people. The latter figure excludes the Central Asian countries whose data are more dubious. If we "guessestimate” their poverty, total number of the poor may exceed 125 million. Almost 90 million of them live in the Slavic republics of the FSU—with 64 million in Russia alone.

The percentage of the poor increased from 5 to 23 in the Balkans and Poland, and from % to 1 in Central Europe (the Czech and Slovak republics, Slovenia and Hungary). Small increase in poverty in Central Europe is due to the fact that the common poverty line ($PPP 120) is low relative to these countries’ average incomes both in 1987-88 and in 1992-93. Very few people had income below that level, in either year. The Baltic countries started the transition with very low poverty rates, close to those of Central European countries. Their poverty recorded sharp increases affecting over a third of the population. In the Slavic republics of the former USSR and Moldova, the poverty rates increased even more than in the Baltics. Russia’s poverty headcount is estimated to have risen from 2 percent to about 43 percent of the population; Ukraine’s from 2 to 41 percent. Finally, the Central Asian countries began the transition with relatively high poverty headcounts (in double digits except in Kazakhstan). The recent data for these republics show that poverty, as defined here, affects almost % of their population.

“In the past, declared earnings were typically checked with enterprises, and pensions with post offices. None of that is done any longer, and a greater share of overall income is composed of sources that are intrinsically more difficult to verify. *Purchasing power of domestic currencies for 1990 is obtained from the latest round of International Comparison Project (ICP). $120 are multiplied by the 1990 local currency (LC) purchasing power to obtain the LC equivalent of the $120 poverty line in 1990. This amount is then inflated by the country’s cost of living index to get the poverty line expressed in LC in the ensuing years. >$PPP 120 is below the so-called social minima used in Eastern Europe which range between 150 and 250 international dollars per month per capita. It is only slightly higher than the “austere” Russian Ministry of Labor subsistence minimum in existence since November 1992. The Ministry of Labor minimum is, in turn, less than 3/5 of the old Soviet social minimum.