The social inequality is an acute problem in Kyrgyzstan. The gap between rich and poor has been growing since independence. If in 1993 the income of the 20 percent of the wealthiest people was 5,8 times greater than the income of the poorest 20 percent of the population, in 2000 the difference increased by more than 10 times.( UNFPA Report, 2000, p.66) The country has taken the capitalist path of development after the break up of the Soviet Union. It means that the society has been going through the process of radical change. This is also true regarding the problem of poverty. Before there had been no official data on poverty and people were provided by the state with social benefits like free medicine and education. Nowadays the system has changed and people have to rely on themselves rather than on the "help from the above." However, due to the structural problems and the assumption of "the psychological habit" to expect the state benefits, the poverty cannot be easily eradicated in Kyrgyzstan. The transitional period of Kyrgyzstan since 1991 is not considered by the government and influential actors in the region such as the World Bank (WB) or the International Monetary Fund (IMF) to be completed and therefore, the reasons of poverty lie in the incompleteness of the transition. Their explanation is that Kyrgyzstan has been caught between the soviet-type political institutions to some extent supported by certain layers of the government and people on one hand, which is the legacy of socialism and the rules of the new international actors and organizations inspired by the neo-liberalist theory on the other. To what degree is this traditional explanation of the reasons of poverty true for Kyrgyzstan and can it clarify the phenomenon of new poverty? Two main approaches to define the causes of poverty and corresponding measures to alleviate poverty come from neo-liberalist and structuralist philosophies. Neo-liberalists argue for the least possible control of the government over economic affairs, giving much freedom to individuals and improving in this way the well being of people, while the adherents of structuralist view suggest that the government should have considerable influence of the state economy to provide a welfare. The main elements of these approaches are described by Martin N. Marger in his work, "Social Inequality," and Alan Thomas, "Poverty and Development into the 21^st century." In the latter, much is said about the sustainable or human centered development as an alternative to both structuralist and neo-liberalist views. However, the sustainable development also "carries serious implications for ‘global’ strategies of development, which ensure the continued economic hegemony of the northen, industrialized countries."(Lewis Owen and Tim Unwin, p.439) In Kyrgyzstan, the sustainable development strategy seems to be not a challenge to the previous ways of development, it rather complements the neo-liberalist approach. The official ideology of Kyrgyz government (from the report on the National Strategy of Sustainable Development in Kyrgyz Republic) illustrates that the government, together with WB, the United Nations Development Project (UNDP) supports neo-liberalist perspective to solve the problem of poverty. But to what extent does the soviet culture still influence people and Kyrgyz government? In other words, is the transitional period over in a sense that have the people (new poor in this case) internalized the main principles of capitalist ideology (especially individualism) and does the government follow this model in reality? To measure transition is not easy, but there is some literature, such as "Differential development, institutions, modes of regulations and comparative transition to capitalism" by Michael Dunford and "Dilemmas of Transition" by Aurel Braun and Zoltan Baranym, which will help me to evaluate whether the transition to capitalism in Kyrgyzstan is sucessful. Both neo-liberalist and structuralist interpretations of the causes of poverty and the ways to eradicate poverty are useful. And while they are important to analyze, my main goal is to learn to which extent the explanations of poverty and the means to fight poverty coming from the official discourse and supported by UNDP, the WB and IMF coincide with the perceptions of poverty of the new poor. And if there are some tensions, why do they exist? My hypothesis is that the neo-liberalist model of development in its version of non or minimum interference of the government into the economic affairs is not fully applicable for Kyrgyzstan to solve the problem of poverty as it intensifies the system of social exclusion (This phenomenon is described in Bill Jordon’s book, "A Theory of Poverty and Social Exclusion). Jan Kowalski in his writing on "Privatization Process in the Transformation from Plan to Market" argues that countries in transition (Kyrgyzstan can be included in this category) should establish "socially responsible" market economy by following the example of West Germany and play a considerable role in transforming the economy.(Martin Bull and Mike Ingham, p.108) Kyrgyzstan cannot afford the "invisible hand" regulations of its economy since it needs to protect some of its sectors of the economy and especially its vulnerable categories of the population, and particularly, stimulate the process of economic involvement of the potential middle-class, essential for the capitalist society, that is the new poor.

In Kyrgyzstan, according to the official data the poverty is seen to be an inevitable accompaniment of transition. According to Justin Burke, the President of Kyrgyzstan Askar Akaev proclaimed the problem of poverty to be the first priority over the next 10 years and he emphasized that over 55 percent of the population live at the poverty level, linking the problem to the current transitional period in Kyrgyz history.(Justin Burke, p.1) The deeper explanations of poverty differ. While the international actors, such as the WB, IMF, and UNDP blame state corruption, sluggishness of the reforms and lack of civil institutions, the government emphasizes the lack of natural resources, foreign debts and "the problem of long-lasting adaptation of the majority of people and partially of the civil servants working in government, to the new conditions, which [prolonged adaptation] is evident in social dependency (the dependent mentality), conservatism, and passivity."(Askar Akaev, p.46)

While the government claims to overcome the extreme poverty in several years and to decrease the poverty in rural areas by stimulating the development of agriculture, the potential middle class or the agents of the market economy in Bishkek, that is people relatively poor with skills and university education, doctors, teachers and specialists with technical education are not given enough attention, they constitute a considerable part of unemployed people or work as small traders or street cleaners.

New poverty is not just poverty in traditional understanding of the concept, new poor can be described as people, who no longer consider themselves necessary for the society, they cannot use the skills of a profession, in which they had been engaged whole life and lose self-esteem. They live in depression and nostalgia about the past and feel hopelessness and insecurity about the future. Despite the fact that it would be more accurate to describe this phenomenon of poverty as downward social mobility rather than poverty (from the official point of view: IMF, WB), the research on the public perception of it as being poverty is still valid.

The main purpose of my research was to find out people’s opinions concerning the poverty in Kyrgyzstan and whether they are compatible with the state discourse. The people of my sample are chosen not randomly, but deliberately and 7 of them fit into the category of new poor. The way of selecting people was through the snowball effect: I would first interview acquaintances of my friends and then their friends. I have conducted 6 semi-structured in-depth interviews with 9 people (I had three couples: husbands and wives), which lasted from 40 to 120 minutes. I hold discussions on the impact of poverty in Bishkek I aimed to learn the attitudes, experiences and the understanding of the people in my sample of study regarding the phenomenon of new poverty and ways, in which it has affected them. The group of poor people whom I mainly focused upon are of middle-generation (40-55 years old), living in Bishkek, males and females, mostly Russians (only three of them were Kyrgyz, two poor and one non-poor) with University, technical or vocational education, who were "caught" between the past and present ideologies or had been used to the soviet-style living and now cannot (or have a difficulty to) adapt to a new system. However, two women whom I interviewed were not poor. Just the opposite, they own small businesses and make relatively good profit. The reason why I included them into my research was to contrast their situations with those of poor and to learn their perceptions of poverty and their ideas on the measures of its alleviation. Even though my main sample (7 new poor people) is representative for the new-poor category of people, it might not be representative for all the people of the middle-aged generation, however, there can also be new poor among people of 35 years old. The names, I am giving in the research are not real.

Unfortunately, it is not possible to illustrate in dynamics the scale of the new poverty since it had not been studied thoroughly. However, data shows that among 25 % of unemployed in Kyrgyzstan are people from 40 to 55 years old (UNFPA Report, 2000, p.61). Moreover, there is no direct connection between the level of education and the level of poverty in Kyrgyzstan and 30 % of poor people have University education (UNFPA Report, 2000, p.67) the poverty issue is sensitive and sometimes people did not give me as much information as I had expected and I could not always ask about their salaries, so I had a vague idea about their poverty and could not distinguish whether they (new poor) would fit into the category of the poor from the official point of view, based on absolute indicators.

The limitations of my research are that the ethnicity and gender relations are not investigated upon and I have not provided the points of view of those people, who do well now, using their skills or education and having good social status, but I presume that they are the minority and constitute the ruling class. It was difficult to find relevant theoretical literature and what I had used in my work does not have detailed descriptions of theories I am using, just general material. Moreover, I did not have enough time to interview more people and to meet with the people, whom I had already interviewed three times to have more thorough discussions.

To investigate the aspects of the economic and political situation in Kyrgyzstan since independence is necessary in order to understand whether the structural elements of the country, necessary for its market-oriented development are able to provide equal opportunities for people as individuals to achieve a sufficient social status. Among such elements are economic growth, trustworthy political and judicial institutions, and a social safety network. However, this is a very broad issue and I can only give a small background of economic and political transformations in Kyrgyzstan since independence.

Kyrgyzstan’s transition "from one extreme to another" is a complex process. One of the ways to explore the nature and the effectiveness of the reforms in Kyrgyzstan since independence is to compare the aims and the essence of the transformations with the expectations and aspirations of the people, and especially the group of new poor people and to comprehend to what extent the reforms since independence were imposed "from above".

I will start with brief descriptions of the transformations in political and economic spheres of Kyrgyzstan since its independence to give a background, in which the new poverty emerged. Then, I will analyze this data from two different perspectives: using the position of the World Bank and contrasting it to Jan Kowalski approach and incorporating the data from my interviews.

The ideology of the Soviet Union was that of equality and the assumption of government’s responsibility to provide the social welfare. Kyrgyzstan has chosen the path towards capitalism, with an emphasis on "individualism," thus, the individual effort in achieving the prosperity is supposed to replace "collectivism." To what extent the people in Kyrgyzstan are willing to accept the capitalist ideology, that "explains and justifies a society’s system of power and privilege, that is, structured inequality" (Martin Marger, p.19) and to what extent is this ideology imposed "from above"?

At the public referendum on March 17, 1991, the majority of people in the Soviet Union voted for the status quo of the USSR. In Kyrgyzsan, of all people eligible to vote, 94,5 percent of citizens participated in the referendum and 93 percent of them wanted to preserve the Soviet Union (Referendum 1991, p.4). After several years of independence many people supported the communist parties in several ex-soviet republics. In Kyrgyzstan during the last parliamentary elections the Communist Party won the majority of votes (27, 9 percent) (Gulsara Osorova, p.1). These facts illustrate that the Western values were not accepted by the people in CIS unanimously. Completely new understandings of the power structure and new phenomena of independence and individualism could not be internalized suddenly by the people. Nina Sverdlova (a doctor, she is going to work as a cleaner at an apartment of foreigners, since her salary of a doctor is only 600 soms a month) perceived the break up of the Soviet Union and all changes, connected with it as:

Some people in my sample considered the break-up of the Soviet Union as an inevitable process, since the former system could not compete with the West, others (7 people out of 9) thought that it was a "from above" procedure, imposed on people forcefully by the government. Gorbachev is often blamed for the USSR’s dissolution. Despite the disagreements of people on the issue of inevitability of the break up, one thing is certain: the government (mostly ex-communist leaders), previously promoting the communist ideas of brotherhood and material equality had to intentionally reconstruct itself rapidly and the whole former system of the Soviet Union.

What is also true about perceptions of new poor about poverty and social change in general was re-evaluation of values. Money became very important, often one of the most important things and it is also connected with power (8 people highlighted this connection). Olga Petrova, formally technical engineer (9 years of working experience at the Lenin plant) nowadays a cleaner and a seller of Chineese cosmetics says:

As for the assumption of dependent mentality of people, which is often blamed for poverty, the empirical data from my interviews illustrates that people no longer hope that the government will supply the welfare for them and express deep distrust in government, 9 people think that the government is corrupt and does not care about its citizens. It means, that they do not expect anything from the government, and the government does not provide anything for them, there is no dependency from the government, people rely only on themselves. However, before (during soviet time) they had expected that the government provided work opportunities for them. Moreover, they are used to working and most of them mentioned that during soviet time everybody was forced to work. According to Daria Komarova, engineer-constructor by profession (7 years of work experience), presently a housewife,

When employment opportunities, created by government had been created and widely available, it was a shame not to work and there was even official punishment for "laziness." Nowadays everyone can do whatever he/she wishes, but the opportunities of decent way of life are in most cases closed. For instance, I cannot work using my profession since I would get a miserable salary of 500 soms a month, for which me and my family would not survive.

The other aspect of "new ideology" (different from the soviet one) is the "structured inequality". Contrary to the assumption that people in ex-soviet countries would not accept inequality or would think that inequality is wrong, all interviewees except one said that there is an inequality, there had always been one (in soviet time also) and it will always persist, so it is a normal phenomenon. However, if in soviet time as Nastya Chernyshova (a teacher of literature and Russian language, works nowadays in the public sector at the central heating plant) put it,

Two interviewees pointed out the negative aspects of present-day inequality:

The person, who said that inequality was bad continued, that

It was not dependent mentality that prevents new poor from having decent standards of living, since they were used to working and "laziness" for them means crime, rather it is lack of job opportunities. Furthermore, they do not perceive inequality as morally wrong, but emphasize "unjust" or acute inequality, when the majority of population is impoverished as a big problem.

The changes in state ideology of Kyrgyzstan since the dissolution of the Soviet Union were inalienable from the economic restructuring. In order to achieve capitalism, the centrally planned economy, which Kyrgyzstan inherited from the former USSR, had to be substituted by the independent free market economy. The transition to the capitalist type of economy was accompanied by economic turmoil since most enterprises in Kyrgyzstan had been designed for soviet-type production: war industry or other kinds of production strongly linked to Moscow and the economic connections with Moscow were interrupted. Moreover, Kyrgyzstan became deprived of its 13 percent of GDP, since it used to come from the central union budget.(Kyrgyz Republic Country Brief, p.1) According to Olga Petrova,

In such conditions of rapid economic decline Kyrgyzstan had to implement the new model of economic development—the capitalist system, which it had never had before by the privatization of state-owned property and creating viable conditions for private businesses. In fact, in 1991 the privatization of small and medium-sized enterprises was launched and it was actively in process until 1993 with more than 3400 enterprises privatized, which constituted 95 percent of all small and medium-sized businesses.(UNDP Report 1998, p24) In the period between 1994—1995, the privatization continued and 1437 big previously state-owned enterprises had also been privatized.(UNDP Report 1998, p.24) The privatization meant that the state could no longer guarantee the jobs and social benefits for people and therefore, redundancy and unemployment became common. All of my interviewees faced unemployment at that time. Nastya Chernyshova recalled,

Furthermore, the profitability of the private enterprises depended on their capacity to survive in the new conditions of the competition within the free market environment, which had an impact on the social network, making it even more vulnerable. Bahtygul Rozakova, an accountant, presently an owner of a small hotel business remembered,

The ways of privatization in the post-soviet countries worth special attention since they were one of the sources of public discontent with the "new system" and the crucial factor for the sudden gap between few wealthy and the poor majority. During privatization which is often referred to by people as "prihvatization" (the Russian new word, created by people at the time of privatization, close in meaning to the word, "hvatati" or "take suddenly by force or in a rude manner"), the wealth of the nation was accumulated by the small group of elite and the rest became impoverished. Almost all my interviewees (8 people) talked about unjust redistribution of wealth after the break-up of the soviet system and feel themselves robbed by the government. Nina Sverdlova said:

Most people from my sample had bank savings during soviet time and felt themselves secure about the future. Because of hyperinflation and other economic factors since the break-up of the soviet system, they became deprived of their savings and earnings. Nastya Chernyshova had been saving money together with her husband for 7 years. She says:

Contrary to the assumption of people’s "dependent mentality" (from the point of view of the Kyrgyz government, IMF and WB), the people from my sample did not sit passively waiting for government’s subsidies. None of them replied that the government was fully responsible for poverty since individual effort was also important. However, they considered government responsible for provision of jobs, especially in the industrial sector and when asked what if individuals (private owners) provide jobs in a private sector, they were to a lesser or more extent suspicious of individuals managing industry. As Asel Kasymbekova’s (she is an engineer-planner, currently seller at bazaar) husband (ex-plant worker, now a driver) noted,

Darya Komarova, when asked what if a private owner woul open job opportunities for people, replied:

Bahtygul Rozakova, the owner of a small business noted that for small entrepreneurs it is hard to survive as the government does not make it possible for businessmen to develop their activities:

One one hand, Bahtygul seems to support the neo-liberalist position and thinks that government should give freedom to entrepreneurs, but on the other hand, she says:

From this saying it is important to conclude while the government is supposed to "liberate" businessmen, it is still seen to be responsible for some kind of control to provide social security network and to make sure that the needy are not neglected. The other essential comment of the above written phrase is that when a person gains more opportunities to maintain his/her business and becomes more free, his individual interest (for instance not to pay taxes) starts to conflict with the common interest (state paying pensions). So the balance is needed (in this case this balance is possible through the active role of the government) not to allow the extremes to happen: either too liberated economy or no liberation for businesses at all. The government could promote the "socially responsible" capitalism.

All of my interviewees, a teacher, engineers, a doctor, an accountant, workers with vocational education cannot be considered to have a "dependent mentality" and took an advantage of the open-market economy and tried different jobs and even commerce. Nina Sverdlova started shuttle trade three years ago since her salary of a doctor was too low even for basic needs. She bought goods (Chineese and Korean) at a market here, in Bishkek and with very heavy bags in both hands went to Russia to sell these goods. She met many doctors, doing the same kind of business in a train on the way to Russia. Nina loves her profession of a doctor, loves to help and treat people, and regrets about not working at a hospital, her friends, who also sell goods in Russia critiqued her:

Nastya Chernyshova and Nina Sverdlova got involved in "chelnoki" business not because of profit, but because of necessity. Nastya, talking about the physiological barrier, when she started the business as self-employed was indignant,

The new poor from my sample "took an advantage" of an open market economy, however, the commerce for them was not an activity for gaining profit, rather it was a necessary (illegal and bad speculation activity) initiative for survival. Many people even felt ashamed of such business and did not want to talk about it. From those who told me about it I learned about their feelings of humiliation and shame connected with such job. Nina said proudly that the stories about her work as "chelnok" are like the stories from the fairy tale "Shahrezada, 1001 nights," when she was working as a small businessman, she experienced terrible things and was often scared that either would be robbed by criminals in a train or by policemen at bazaar. Now she makes fun of all those stories and of herself. She recalled that once one of her bags was stolen, but fortunately, it was a bag with dirty clothes she did not need and some garbage. So the conditions are also for survival rather than for a business in a traditional sense, in which "Chelnoki" had to work were as a rule not those of the normal businessmen: no water for washing, sometimes no place in a train for people, so they used a space for baggage instead.

The role of International Organizations and other external actors during Kyrgyzstan’s transition was decisive since the country possessed neither sufficient resources nor experience to act independently in the international arena for overcoming the crisis by itself. The assistance was high so now Kyrgyzsan is left with its foreign debt of $1.4 billion, the equivalent of annual GDP, of which $87 million had to be repaid in 2000 (Liz Fuller, p.1). In its official discourse the government of Kyrgyzstan blames the dependent mentality of people as one of the reasons of poverty. However, Kyrgyzstan depends to a large extent on the external actors for provision of the large proportion of its budget and still emphasizes the idea of sustainable development, which presupposes if not self sufficiency, then at least the preservation of the resources for the future generations, which is not likely given the heavy burden of foreign debts and no significant improvements in the economic sector.

The economic sector is perceived by all interviewees as important to develop to alleviate the problem of poverty. Large-scale industry, tourism business and agriculture are considered to be essential elements for economic development of Kyrgyzstan. According to Asel Kasymbekova’s husband,

The transition in Kyrgyzstan is still blamed for poverty, however, Kyrgyzstan has already adopted the model of neo-liberalist model of development. Aurel Braun and Zoltan Barany point out the success criteria of the transformation to a capitalist system: financial stabilization, liberalization, and private sector development. Low inflation and economic growth are also the indicators of success.(Aurel Braun and Zoltan Barany, p.72) In his official speeches, the President, on the behalf of the whole government said that the above mentioned criteria is met (Askar Akaev), but the transition is still an escape goat for present-day problems such as poverty. Not only government claims to achieve considerable success in adoption of the new system, Kyrgyzstan was among four transition countries that had reached growth rates of 7 percent or more in 1997, its inflation was below 40 percent, as for criteria of market liberalization (World Bank liberalization index), it achieved success already in 1994 due to the radical reforms, the criteria on open economy, set by Jeffrey Sach and Andrew Warner, was also met by Kyrgyzstan.(Aurel Braun and Zoltan Barany, p.74) Moreover, much of the Kyrgyzstan’s GDP comes from the private sector, which is also an indicator of the successful transition.

The roots of poverty are the economic decline right after the break up of the Soviet Union, unjust accumulation of the nation’s wealth by the few and further institutionalization of the system of acute inequality with the help of external actors such as IMF, World Bank and UNDP. The World Bank has recently chosen Kyrgyzstan to be a pilote country for the fostering of comprehensive development framework (CDF), which supports projects in agriculture, finance, health, social protection and energy. Such program claims to reduce the problem of poverty. In 2000 the WB has also started a land and real estate registration project, an urban transport project, a farm irrigation rehabilitation project, a rural water supply project and a Consolidation Structural Adjustment Credit (WB Program, p.1). The Structural Adjustment Program means tight fiscal control and therefore, further decline in social services. The government is further liberating the economy and itself, however, the responsible or guiding role of the government is needed to stimulate the economic development and ensure the stability for people. The perceptions of poverty of new poor do not coincide with the official discourse on poverty alleviation: while government, supported by the IMF and WB concentrates on the problem of rural and extreme poverty, the new poor, the potential middle class of a market economy, often people with University education become small traders or cleaners and do not have opportunities to have good standards of living, using their professions.

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