Statistical data and sociological studies show that living standards in the country are growing, though not too fast. Russians' incomes in real terms (that is, with account taken of inflation) grew by nearly 10 percent over the past two years.
Nevertheless, the social consequences of the Yeltsin-time reforms, especially of the August 1998 financial crash, which was caused by serious errors made by leaders of the then government and the Central Bank, have not been fully overcome yet. In February 2002, people's average incomes lagged substantially behind the 1997 level (by 16 percent), and the 1998 level (by 9.5 percent). In the not-so-distant past, the situation was even worse, but this is of little comfort to those who, in Vladimir Putin's words, "are still tormented by poverty." Today, poverty is still one of the most acute problems of Russian society, which is confirmed by the results of recent analytical studies on the first quarter of 2002. We have only preliminary data which will be finalised, but the tendencies are seen clearly.
In the first quarter of this year, the number of the needy decreased by 16 million people, as compared to the first quarter of 2000, and by 9 million people, as compared to the same period of last year. This is considerable progress, but the 40-million strong "army" of the poor is a most alarming fact.
Today, there are quite a few pensioners who managed to overcome poverty. After the August 1998 crisis, the majority of veterans found themselves in a catastrophic situation. In 1999, the average pension accounted for a mere 61 percent, and in 2000 - for 76 percent, of the subsistence wage calculated according to the currently applied methods. Priority indexation of pensions made it possible to raise their average level to 89.5 percent of the subsistence wage. And finally, this threshold was crossed in February 2002, with the average pension amounting to 1,322.7 roubles, and the subsistence wage (by estimate) - to 1,313 roubles. The task set by Vladimir Putin last year, has been resolved by now, and this is a very important point.
As regards the economically active population, a further rise in wages and incomes should be accompanied by a corresponding increase in labour productivity. Otherwise, unearned money will be paid out again, which will step up inflation and destabilise the economy. There is still hope that support for small and medium-sized businesses promised by the authorities, and a rational industrial (as well as agricultural) policy will help enhance production efficiency and ensure higher people's incomes on this basis.