Poverty level reducing in Russia… A million of the needy less

Good but nothing to be glad about?

The Russian State Statistics Service has preliminarily evaluated the number of the needy at 20,8 million in Q1 2018 – it's 1,2 million less than it was calculated in January-March last year. The share of the poor has also reduced – from 15 to 14,2% of the total population of the country. At the same time, the living wage and minimum wage have risen by 129 rubles and 1,989 rubles respectively compared to Q1 2017 (living wage is 10,038 rubles, minimum wage – 9,498 rubles). It seems that growth in salaries, pensions and, consequently, the population's incomes favoured the poverty reduction. Wages (which account for about 65% of all incomes) have increased by 9,5% in real terms year on year in January-March 2018. Pensions whose real size reduced in 2015-2016 have been recovering since last year. The Russians' real available incomes have also entered a phase of recovering growth in the first quarter this year after a four-year fall – they've increased by 3%.

The poverty level in Russia had been confidently falling since the early 2000s. The crisis in 2014-2016 put paid to this process. In 2014 already, the number of citizens on the breadline went up by 600,000 people, to 16,1 million; the number of the needy was at 19,5 million in the next two years. Finally, the number of house managements with incomes lower than the living wage and general poverty level reduced last year, though insignificantly: the share of the poor decreased by 0,1%, while the number went down by 200,000 people, to 19,3 million. But the deficit in monetary incomes (the sum that needs to be paid to the needy, so that they get rid of this status) hasn't changed since 2015 in comparison with the total volume of the Russians' incomes – 1,3%.

The reduction of the poverty level is, undoubtedly, the good news, but it's early to celebrate the victory, says economist Sergey Khestanov. The current change is too small and short, such numbers can't be considered as a stable trend: ''Nobody questions the data itself, but it's completely adventurously to draw conclusions. They [the data] can easily turn into completely opposite.''

What's more, Khestanov reminds the presidential election took place in the first quarter. The country is always generous about social support during election campaigns, moreover, this mainly refers to the poorest classes of the population.

Also too much

To reduce poverty was one of the important parts of Vladimir Putin's election programme. In the address to the Federal Assembly in March, he said ''poverty has grown again due to the crisis'': ''Today 20 million of citizens face it. Of course, it's not 42 million like it was in 2000, but it's also too much.'' Then Putin claimed the poverty level was to be twice lower in the next six years. Later this task was given in the new May Decree signed on the inauguration day.

To reduce poverty was one of the important parts of Vladimir Putin's election programme. Photo: kremlin.ru

Results of the fight against poverty will depend on the growth of salaries and how social support will improve – it's necessary to make the help targeted, and not a large audience but those who really need it should receive it, said Elena Grishina from RANEPA Institute of Social Analysis and Forecast previously. The growth of pensions will also reduce poverty, as almost a half of house managements have a pensioner today. In Khestanov's opinion, the twofold reduction of the poverty level is a ''long-term matter''. ''It's so long that it's useless to simply dwell on it,'' he adds. ''This kind of promises should be treated carefully.'' A very rapid economic growth, which was seen in the early 2000s, is needed to significantly reduce poverty within such a short term. Khsetanov states such growth doesn't loom on the horizon now.