By Marielle Eudes
Agence France-PresseJuly 11, 2001
Steady economic growth and plaudits from foreign experts have brought have done little to improve the lot of municipal workers such as Galina Glukhova, one of the country's millions of "new poor."
"I have a job, and I have no children. But I have to look after my mother, who receives very little money, and I just can't make ends meet," Glukhova said. With a monthly salary of "not quite 1,000 rubles" (less than $34) and a pension of 900 rubles, Glukhova and her mother fall below the official poverty threshold set at an average 1,234 rubles per person per month. "Four or five years ago I could just about manage. But now I have to rely on the generosity of neighbors and scrape around for extra cash when the opportunity arises," she said.
Russian officials are divided as to the true extent of poverty in Russia. Some argue that declared incomes are well below true earnings. Others respond that the official "shopping basket" that defines the poverty level does not provide enough to keep body and soul together, so poverty is more widespread than the figures indicate.
In either case, the ruble devaluation crisis of 1998, when the currency shed nearly three-quarters of its value against the dollar, cast sections of the population into poverty which previously had been able to keep their heads above water, the latest studies show.
And while the extent of poverty has worsened, there has been no real social policy set in train to alleviate the effects of economic reform since the process was launched a decade ago. "After the 1998 crisis, the average pension fell below the minimum subsistance level and more than 60 percent of pensioners found themselves in the risk zone," economist Lilya Ovcharova of the Russian-European Center for Economic Policy said in a report published in May.
Public sector workers also are among the lowest wage-earners, and many are unable to provide for basic necessities for their families, Labor and Social Development Minister Alexander Pochinok said recently. Official statistics define almost one Russian in three (30.4 percent) as living in poverty.
And in some sectors, such as agriculture, health, education and the cultural sphere, the proportion rises to nearer 60 percent, Ovcharova said. Moreover the disparity between the Russia's richest and poorest percentiles - the top and bottom 10 percent in the wealth league - is yawningly wide, and getting wider by the year.
In 1992, at the start of the post-Soviet transition stage, the income of the top 10 percent of earners was eight times that of the bottom 10 percent. Now that proportion stands at 14 to one. Overall, despite growth of 20 percent over the past three years, the average standard of living in Russia remains below the level it had reached by 1998, economists note.
The government is engaged in a wide-ranging review of the benefits and welfare system that currently supports around 70 percent of the population in order to ensure that the money is directed to those who most genuinely need it.
Measures under consideration include the suppression of a variety of tax exemptions that are no longer justified, restricting benefits to the poorest households, partial privatization of the health system, and a sharp reduction in the number of civil servants in order to increase their salaries.
"The reforms being lined up go to the very heart of the old socialist system which has been left in place until now to provide a minimal safety net. The risk is that the withdrawal of the state may not be offset by sufficient economic growth," a western diplomat warned.
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