Socio-economic factors influencing the level of welfare of the population in Central Asia

Resumen

The purpose of this research is to empirically analyze the dynamics of poverty in Central Asia, incorporating selected factors into a proposed model known as the vicious circle of poverty. This model illustrates a closed cycle in which the development of one factor directly influences the preservation of another, creating a complex web of interdependencies. Regression analysis, adapted to address data limitations, is employed to assess the impact of these factors on poverty. The study, conducted over 11 periods, necessitates the use of weighted ordinary least squares due to data constraints. The study encompasses 11 periods, and for some factors, ordinary least squares tools with robust error assessments prove ineffective due to limited data accuracy. As a result, the weighted ordinary least squares approach is adopted to ensure robust model quality. The research underscores that the persistence of poverty in Central Asia is rooted in systemic factors, resulting in cyclical patterns in some nations. While Kazakhstan and Uzbekistan presently lack vicious poverty circles, their vulnerability to such circles remains, requiring substantial transformations. To mitigate the risk of enduring poverty, a comprehensive approach is recommended, encompassing policy measures tailored to the most vulnerable segments of society. Proceeding from econometric modeling, the authors propose a list of recommendations to build a basis for further mitigation of the problem in Central Asian states. The proposals are made with consideration of the complicatedness and infeasibility of comprehensive and overnight solutions to the problem of poverty and are intended to launch a mechanism for the assessment of the situation and its initial resolution.