RUSSIA: Increasing Wealth Fails to Reduce Poverty

By Kester Kenn Klomegah Reprint | | Print |

Kester Kenn Klomegah

MOSCOW, Jun 28 2006 (IPS) - The economic growth of recent years has failed to improve the lives of vast numbers of deprived people across Russia, experts say.

The Russian government set aside 4 billion dollars for social programmes, but levels of dissatisfaction with services for the poor are the highest since the economic crisis of1998.

“The situation has not changed significantly for the rural population,” Matthes Buhbe, representative of the Friedrich Ebert Foundation in Germany told IPS. “In terms of poverty, the situation is widespread in the regions where the majority can’t survive without substantial subsidies from the federal budget.”

Availability of clean water, sufficient food and reasonable shelter has improved, Buhbe said. “But if you measure poverty in terms of relative income distribution or in terms of quality of life (social loneliness, protection against violence and crime, alcoholism, provision of healthcare), poverty is still very widespread.”

The reasons for policy failure are mainly ineffective implementation, he said.

A survey by the Public Opinion Foundation in April and May indicates that 58 percent of people believe that rising utility prices have made living more difficult. Only 28 percent thought the situation will get better..

A United Nations Development Programme (UNDP) report says Russia’s richest 20 percent get 39 percent of the country’s income, while the poorest 20 percent get only 8 percent.

Despite economic progress, deep-seated poverty and malnutrition remain serious problems in Russia, it says. Russia differs from other countries in that more 50 percent of poor citizens are members of working families, the UNDP report says.

The report points to an enormous development gap between Moscow and the regions. Only 3 percent of Moscow’s population lives in poverty, while in some rural areas the figure is as high as 50 percent.

The report says that Russia has not increased spending on health or education as a percentage of gross national income (GNI) since the collapse of the Soviet Union, and that both are still lower than military spending.

Elimination of corruption and impeding bureaucracy are “imperative for any positive changes in the life of the country,” director of the Sociology Institute of the Russian Sciences Konstantin Gusko told IPS. Most people believe that problems arise from power structures that do not consider an improvement in the quality of human capital important enough, he said.

According to the State Statistics Service, the average Russian can only make 8,530 roubles (315 dollars) a month. “It’s pathetic to see the majority of Russians struggling with meagre incomes,” Tatyana Maleva, an expert on poverty said in an interview to the Komsolmolskaya Pravda daily. “They would want a change in the prevailing situation but many are frustrated at the pace of development and falling living standards, or the increasing cost.”

The average Russian probably earns more than the statistics suggest, because a fair bit of income goes unreported. And one reason people feel dissatisfied is that they were expecting the situation to improve faster than it has, some sociologists say. But few deny real and widespread deprivation.

“The whole system of policy reforms in the social sphere has not effectively been examined and tackled,” Gusko said. “Studies have showed that the system consistently lacks proper coordination, assessment and constant review. All this has brought contradictory attitudes towards the government and problems within society.”

President Vladimir Putin has acknowledged that poverty is a key problem. “A lot of people live below minimum living standards and there are a lot of poor people,” he said at a video conference on his national projects early this month.

“The issue does not relate only to public health. It is the task of the state: society, the government, the State Duma (parliament), the Federation Council and other authorities,” he said. “The best way to solve the problem of poverty is to secure high growth rates of the Russian economy.”