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Thursday, September 27, 2007

Annals of Putin's Failure: The Poor Get Poorer (and in Russia, that means just about Everybody)

Kommersant reports:

Over the past eight years income has grown rapidly, but so has inequality. Putin’s abundance has not yet reached everyone: the rich get richer faster than the poor. The Gini Coefficient, which reflects the material inequality in a country, grew from 0.395 in 2000 to 0.407 in 2004. According to RMEZ, the income of the richest 20% of households was 6 times richer than the poorest 20% of households. To compare, this factor was only 5.2 in 2005. Measured by expenditures, the split is even greater: a factor of 6.7 in 2005 and 8.9 in 2006. This spread points to a colossal difference in lifestyle – but not in terms of mansions and limousines. The best-off Russian families, compared to their poorest countrymen, spend 7.7 times more on fruits and vegetables, 10 times more on alcohol and 12.6 times more on meals outside the home.

The unevenness of income growth calls into question the possibility of ending poverty in Russia. Unfortunately, it is extremely difficult to determine whether the government has succeeded in cutting poverty in half. The poverty level ratings vary greatly depending on who you consider to be poor. According to Rosstat, in 2000 42.3% of Russians had incomes below the cost of living. In 2004 25.5% of Russians earned less than the cost of living. However, the percent of families who receive charity or help from relatives is growing steadily. Currently 29.9% of the population fits this category. In other words, whatever the statistics say, one third of families are poor enough to accept material support from those around them.

According to the Institute of Sociology at the Russian Academy of Sciences in a report “Urban Middle Class in Russia” (2007), more than 20% of the economically active ubran population and about 14% of the country’s overall population belong to the middle class. About 22% of the population is on the periphery of the middle class. The income threshold for middle class is 10,500 rubles per family member per month. 54% of Russia’s middle class are workers in the government sector, 16% of the middle class income is received as social aid. Experts don’t see significant prospects of the middle class growing.

So to recap: 86% of Russia's population lives on less than 10,500 rubles (about $400) per person per month, or about $15 per day. If you have that much, you are labled "middle class" by Putin's government -- but in fact, you are super rich. "Middle class" should properly refer to the average or median income of the country, not at miniscule group squeezed into the top 14% of the whole country between the desperately poor and the obscenely wealthy. And what's far more disturbing is that the gap between rich and poor is accelerating rapidly, just what happened in Tsarist times to trigger the Bolshevik revolution. Mind you -- these are the Kremlin's own numbers we're talking about. What the actual, horrifying truth may be, one can only guess.


Anonymous said...

400$ - is a good sum, compared to "democracized" Georgia for instance.

La Russophobe said...

(a) It's pretty pathetic if you have to compare yourself to Georgia instead of other G-8 countries to make yourself look good.

(b) The only reason Georgia is poor is because of Russian exploitation and oppression. But unlike Russia, Georgia has many real friends in the world who will help it become prosperous and free. Russia will continue down the road to disaster all alone, following the USSR into oblivion.

Anonymous said...

All right, if compared to Russia itself of the 1990-s, 3$ dollars per hour is MUCH better than 30 cents per hour that we got in those years.

And I don't want to compare Russia to other G8 countries.

As far as I remember the economic blockade from the Russian side towards Georgia stared in 2006. So what prevented Georgia to become rich before 2006? And what's preventing it now? Russia? No, Saakashvilli himself said that the blockade positively affected Georgian economy.

Hell, if Georgia and Ukraine, with their American "democracy" and American support will turn into prosperous and rich European-like countries (at least during the next 10 years), I'll change my nickname to "anti-russia" at once.