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Russia: Even As Incomes Rise, Poverty Remains Endemic

  • Gregory Feifer

In Russia, officials say one result of the country's recent economic growth is a drop in poverty. The State Statistics Committee puts the number of people living below the subsistence level at slightly less than one-third of the population. But sociologists say the agency's figures do not necessarily reflect the true number of poor people in Russia. They say the government is failing to address the root causes of poverty and is instead carrying out popular but small wage and pension increases that only reinforce dependence on a state staggering under the weight of its economic problems.

Moscow, 9 January 2003 (RFE/RL) -- Authorities are making it harder, but a number of Moscow's poor nonetheless manage to beg for money underground in the city's metro system during this winter's unrelenting cold weather.

Yevgeniya Pavlova, a 76-year-old pensioner sitting in a corner on a row of crowded steps, is one of them. A former schoolteacher, she earns a monthly pension of 1,000 rubles, equal to about $31, which is just over half the official subsistence level in Russia. She said that scraping together enough money for food and medicine to survive is tough. "I don't know how Russia is still holding together. It's just horrible. There are a lot of us pensioners, as well as the poor, who make up a third of the population. So I'm not expecting to be given [more help from the state] right away, because other people also have to be taken care of, isn't that so?" Pavlova said.

Like Pavlova, many of the capital's homeless and poverty-stricken are elderly. After lifetimes under a communist state that, however repressive, provided guaranteed incomes and housing to most, the country's older generations were left with no safety net in the unforgiving new environment of "wild capitalism" after the Soviet collapse in 1991.

But the elderly aren't the only victims of Russia's transformation. In an ominous development, a growing number of children are joining the ranks of the poor, with burgeoning armies of street kids populating the country's major cities. They, too, have fallen through the yawning cracks of an economic system in a state that is neither willing nor financially able to do much to help them get by.

The Health Ministry last month revealed the results of a survey reporting that a stunning 60 percent of the country's youth -- some 30 million children -- are in poor physical or psychological health.

There is little solace for the country's poor. Those Russians who live more comfortably -- many by working fiercely to beat the odds -- often feel that those who don't do not deserve to be pitied. That is also the official position of the Russian Orthodox Church, which leaves most charity work to foreign aid organizations.

But the government says the poverty trend is changing as the country enjoys continued -- albeit slowing -- economic growth. With its gross domestic product rising over 4 percent last year, the government says the number of poor has fallen from over 29 percent to 27 percent.

The State Statistics Committee, Goskomstat, pegs the degree of poverty to the official per capita subsistence level, which it puts at 1,817 rubles ($57) a month. The agency says 39 million Russians earned less than that amount as of last November.

"The level of poverty is still high, but it is decreasing, although not as rapidly as we would like," Prime Minister Mikhail Kasyanov said recently, adding that incomes have grown faster than expected.

But Goskomstat's figures are widely disputed. Different estimates of the number of Russia's poor vary from one-fifth all the way to half of the population.

Tatyana Maleva, a leading sociologist, works at Moscow's Independent Institute of Social Policy. She agrees that incomes have increased, but she added that the statistics are no great cause for optimism, because last year's overall economic growth should have actually provided larger paychecks.

Maleva said the subsistence level is a subjective figure that can be manipulated for political gain. While it is actually possible to survive on less, earning more does not necessarily indicate economic "success."

International financial and aid organizations such as the World Bank argue that Goskomstat's subsistence level is too low.

Maleva also said that income alone cannot indicate poverty levels and that statisticians should take into consideration assets such as savings and real estate. "The dynamic [of poverty] shown by Goskomstat is based very much on macroeconomic factors. This dynamic doesn't realistically indicate how many poor people there are in the country -- are there more or fewer? There could be fewer, but the degree of poverty for those who are poor may have increased," Maleva said.

While pensions may be increasing, society's poorest -- often "working poor" families with more than one child or a single parent -- have seen no improvement. That helps account for the distressing figures on suffering children. It is this new wave of poor, and not necessarily those who directly suffered from the Soviet collapse, such as pensioners, that is the greatest cause for concern.

The gap between Russia's richest and poorest, meanwhile, continues to grow. Goskomstat says the wealthiest 10 percent earn about 33 percent of the country's income, while the poorest 10 percent get just 2.3 percent.

A recent survey by the All-Russia Center for the Study of Public Opinion shows an overwhelming number of Russians, including both the haves and have-nots, saying the gap between rich and poor is "extraordinarily large."

Critics say the government is not only failing to tackle the root causes of poverty, such as the collapse of industry in many parts of the country, but is also possibly making the situation worse by passing politically popular measures that do little to cure the country's fundamental economic ills. Dependence on wage and pension increases are said to encourage a sense of "paternalism" under which the poor look to the state for negligible handouts instead of seeking concrete ways to improve their situation.

Maleva said the government is only addressing poverty's symptoms and failing to undertake major institutional reform such as tackling the issue of the country's bloated public sector. "There are several million people who earn subsistence-level wages and remain poor. These are teachers, doctors, social workers. Even if their wages are above the subsistence level, then, taking into account household assets, they will continue to remain poor families," Maleva said.

Pavlova, who begs in the metro system, said she is waiting patiently for some help from the government and is pinning whatever hopes she has on Russian President Vladimir Putin. "It's difficult for Putin alone to cope. We need 10 Putins. He's trying [to do something] conscientiously, but I don't know what will happen in the end," Pavlova said.

Speaking to the country on a live call-in television program last month, the president responded to most questions about social policy by saying the government will increase spending on wages, pensions, and handouts this year.