[lbo-talk] Putin: words and reality

" Chris Doss " nomorebounces at mail.ru
Fri Mar 12 07:05:28 PST 2004


Novaya Gazeta March 11, 2004 SOCIO-ECONOMIC CIRCUMSTANCES: THE PRESIDENT'S WORDS COMPARED TO REALITY Achievements, official statistics, and hidden problems Author: not indicated [from WPS Monitoring Agency, www.wps.ru/e_index.html] [When he took office in 2000, Putin promised the nation a great deal. He promised to conquer poverty, eliminate homelessness, reform the housing and utilities sector, revive the Armed Forces, and much more. Now is the perfect time to recollect the promises and compare them to reality.]

The incumbent president is very likely to be re-elected for a second term. He is far ahead of all his rivals in the presidential race.

No one knows what Putin will be like in the next four years, but at least we can't call him a pig in a poke: this is the only candidate whose performance as president can already be assessed. When he took office in 2000, Putin promised the nation a great deal. He promised to conquer poverty, eliminate homelessness, reform the housing and utilities sector, revive the Armed Forces, and much more.

Now is the perfect time to recollect all President Vladimir Putin's promises and compare them to the actual state of the nation's economy and social sphere. This is what we shall attempt to do.

* * *

Thesis: The number of Russian citizens living below the poverty line has been reduced substantially.

Official statistics: In 1999, 35% of Russian citizens had incomes below the subsistence minimum; in 2003, the figure was 23.3%. At present, the subsistence minimum is defined as 2,137 rubles a month.

Hidden problems: The overall percentage of poor (or rather, destitute) citizens has indeed decreased. But this has occurred due to rising living standards in Russia's largest cities. Meanwhile, 57% of residents of small cities and 38% of rural residents are still living below the poverty line.

* * *

Thesis: The average per capita income of Russian citizens has more than doubled; it is now twice the subsistence minimum.

Official statistics: In 2003, the national average income was 5,524 rubles a month - compared to 1,876 rubles a month in March 2000. Between 1999 and 2002, real incomes (adjusted for inflation) rose by 58%. Real incomes rose by 13.55% in 2003.

Hidden problems: Average per capita income is an indicator which does not reveal differences between people in various income brackets. Most of the rise in average per capita income has been due to greater prosperity among the higher income categories. Between April 2002 and April 2003, the incomes of well-off citizens rose by an average of 3,300 rubles a month; meanwhile, the incomes of the poor increased by 116 rubles a month.

* * *

Thesis: Average pension rates have risen by one-third, and are now above the subsistence minimum.

Official statistics: In 1999, the average pension rate was equivalent to 70% of the subsistence minimum. At present, with the average old-age pension rate at 1,890 rubles a month and the subsistence minimum at 2,137 rubles a month, this figure is 88%.

Hidden problems: Pensions did rise above the subsistence minimum, but only for a very short time, changing for the worse as soon as the subsistence minimum was revised. In fact, the relative rise has been only 18%.

* * *

Thesis: Real wages for state-sector workers have more than doubled.

Official statistics: At present, the average monthly wage in health care is 3,943 rubles; in education, it is 3,720 rubles; in academia, it is 3,679 rubles.

Hidden problems: The wages of state-sector workers are several times lower than wages in industry. For example, the average monthly wage in the natural gas sector is 23,705 rubles; in oil refining it is 18,270 rubles; in the electrical energy sector it is 9,320 rubles. And this gap continues to grow.

* * *

Thesis: The transition to users paying 100% of cost for housing and utilities has been essential for improving the quality of services.

Official statistics: In 1999, housing and utilities tariffs rose by an amount equal to average inflation; in 2000, the rise was double the inflation rate; in 2001-02, the rise was triple the inflation rate; in 2003, the rise was three-and-a-half times the inflation rate. As a nationwide average, at the end of 2003 people were paying 90% of full cost for housing and utilities.

Hidden problems: The rise in tariffs has not resolved the problem of worn-out infrastructure in housing and utilities. At present, over 60% of infrastructure is obsolete. The failure rate for supplies of water, heating, gas, and electricity is over 35%. Evidently, steep tariff rises have not led to any noticeable improvements in the quality of services provided to consumers.

* * *

Thesis: Fighting child homelessness.

Official statistics: Seventy-eight million rubles from President Putin's personal fund has been allocated to fight child homelessness.

Hidden problems: According to the Interior Ministry, there are now 1.117 million homeless children in Russia (in comparison, the number was 200,000 in 1925). They commit over 100,000 "acts posing a danger to society" each year. The federal program for fighting child homelessness isn't working. The regions are all handling the problem individually, as far as their limited capacities permit.

Translated by Alexander Dubovoi



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