Moscow News September 25-October 1, 2002 POVERTY, RUSSIAN STYLE Erlen Bernshtein
It is fundamentally different from poverty in the canonical sense of the word. Usually, poverty exists, as it were, outside the economy; it affects people who failed or did not bother to find decent work. This kind of poverty is like a dirty patch on the economy's body. It is a reminder that not all problems have been addressed, that a part of society has fallen by the wayside, ending up as outcasts.
Poverty Russian style is part and parcel of the economy, one of its main driving forces. There are not so many unemployed in Russia: 6.5 million people. But as many as 40 million people live below the poverty line. This means that there is a multimillion army of impoverished workers.
Sheltered by the "black hole." Several dozen million people (at present 40 million, but the figure used to be higher) have for years been getting miserly, less than minimum living wages.
The bulk of Russians survive thanks to their traditional links to the countryside. "Employees at our enterprise are first or second generation city-dwellers," Vladimir Lisin, director of the Novolipetsk metallurgical plant, says. "Their parents all live in villages."
There are 190.6 million hectares of farmland in the country, 13.6 million of which are occupied by family subsidiary plots - very small patches of land, on average 0.4 hectares. Family subsidiary farming accounts for 92 percent of potatoes, 77 percent of other vegetables, 59.4 percent of meat, 49.7 percent of milk, 29.5 percent of eggs, and 0.9 percent of grain produced nationwide.
Outlook for the immediate future. Everything hinges on the WTO and also on what is known here as small business.
"You pretend to be paying us, we pretend to be working." This Soviet-era aphorism illustrates the cause of present-day poverty Russian style. We - especially those who had a long record of work under Soviet rule - have forgotten how to work effectively, or have been discouraged from working effectively. Russia's inevitable admission to the WTO will activate a separator that will divide the now homogeneous working mass, leaving some with work and decent wages but rejecting others.
The number of unemployed will increase dramatically. Such is the price that the majority of former Soviet industrial enterprises will have to pay for their ability to compete on the world market.
"Small" business in Russia has long grown up. Take, for instance, Vimm-Bill-Dann, founded by two ex-servicemen, and now Russia's largest food processing company, comprised of 14 plants that produce 149 types of juice and 266 types of dairy products; or the MAIR concern, formerly a metal scrap collection point but now the world's fifth largest ferrous metal recycling company; or the Novosibirsk-based Novosoft company, formerly a one-man operation, now employing 500 people with U.S.-standard compensation packages.
None of these enterprises are likely to employ those who will be rejected by the ruthless WTO separator. These unfortunates will have to start from scratch. Yet whereas small business pioneers were able to begin operation with their own resources, today, amid rampant poverty, this could prove all but impossible. Someone has got to help them - clearly not the state, which is not in a position to do so. Here it is appropriate to recall a new type of activity that consists in taking over infrastructure management from the state - put simply, laying the ground for those who would like to start up a business (build low-cost housing in hard-of-access areas or low-cost commercial space, etc.). All that is required from the state is not to interfere with the process.
As for those who lack enterprise, they will always have an opportunity to take shelter in the cozy "black hole" of the agricultural sector.
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