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RIA Novosti
April 27, 2004
RUSSIAN TIRED OF THE VIRTUE OF POVERTY

MOSCOW. (RIA Novosti political commentator Vladimir Simonov)-Russians have many proverbs that make poverty into a virtue. For example, the title of a play by the famous Russian dramatist Alexander Ostrovsky "Poverty is not a Vice" has all but entered the vernacular, while another well known phrase is "the poorer you are, the more generous you become." In the spirit of this tradition, poverty in Russia could still be perceived as something tolerable, and in no way shameful, maybe even noble. If it were not for one big "but": in the years that the country has adapted to capitalism, poverty has acquired a sweeping scale.

According to official data, 30 million Russians, or 23% of the entire population, live below the poverty line.

However, it seems that the day has finally come when the Russians have had enough of this situation, and the authorities, having clearly taken these sentiments on board, are ready to launch a campaign against it. Prime Minister Mikhail Fradkov recently announced that the government would halve the number of Russians living in penury in the next four to five years.

Sociologists immediately warned that the West's experience could be of use, but that it would be unwise to rely too heavily on it. To paraphrase Leo Tolstoy about unhappy families, every one is unhappy in its own way, and so Russia's poverty is unlike that of any other country.

In other countries, the poor are typically unqualified and so do poorly paid manual labour. In other words, if you are uneducated, you receive low wages. However, the picture is completely different in modern Russia, as highly educated people - engineers, doctors and teachers - have a hard time making ends meet.

It should be pointed out that in the West, a person's low living standards are usually a result of the individual. He is either an alcoholic or a drug addict, a disabled person or a victim of some other circumstances. Economic factors, for example the situation on the employment market, play, although an important one, still more of a secondary role.

This is the direct opposite of the situation in Russia. The state's condition overrides personal circumstances. The Russian poor are poor mainly because they do not receive their wages or pensions on time and their benefits are too meagre to solve everyday problems, while jobs are hard to come by. Only then does the standard set of personal misfortunes take its toll: alcoholism, illness and the like.

In short, many experts believe that macro-social factors that rule the state are primarily responsible for poverty in Russia. Here one can draw a conclusion: the state's priority is to help a person overcome poverty, of course, while the victim of poverty uses his own labour.

But who is the average poor person in Russia?

The problem of poverty in Russia, apart from everything else, is also a psychological one. An important feature of the Russian way of thinking is to compare oneself with the surrounding environment. Indeed, 80% of Russians compare their neighbour's quality of life with their own and if these people have a lower quality of life, then they are poor.

This is perhaps why the Russian notion of poverty may be qualified as being more relative than anywhere else in the world.

This is confirmed, in particular, by social surveys. In the opinion of 23% of those asked, Russians should earn no less than 3,000 roubles a month (about $100) if they are not to be viewed as poor. Another 29% raised this level to between three and five thousand roubles a month. However, 31% of the respondents put the figure at 5,000-8,000 and a final 15% stated that everyone who earned less than 10,000 roubles a month was poor.

In Western terms, these modest dreams look even more than modest.

Unfortunately, they are higher than official standards. The Russian authorities consider the members of the family to be poor when the average per capita income is lower than the subsistence minimum. This approach is only applied in the United States and the CIS. In Europe, these calculations are not made on the basis of the subsistence minimum, but the average income in the country. The European benchmark for poverty, depending on the country, is between 40% and 60% of this average index.

Furthermore, the calculation of the subsistence minimum in Russia that the Federal Statistics Service uses dates back to Soviet times. This is possibly why the service's computations still smack of revolutionary asceticism.

Therefore, according to data from late 2003, the average subsistence minimum in the country stood at 2,143 roubles. Moreover, it fluctuated from 2,341 for working people to the far lower figure of 1,625 roubles for pensioners.

Aside from the money in the minimum consumer basket, there are also other goods that are impossible to live without. In particular, a Russian is supposed to be able to get by in one year on 31kg of meat and poultry, 13kg of fish, 200kg of vegetables and 165 eggs. In other words, there is no danger of him putting on any excess weight.

The Federal Statistics Service has prescribed which clothes a Russian should wear and how long they should last if he does not want to fall into the ranks of the poor.

The consumer basket includes one three-piece suit, which should be worn for five years, one pair of wool trousers (four years) and one pair of shoes, which obviously should be super-strong and perhaps even with steel soles, as it should also last half a decade.

These recommendations are particularly offensive to millions of Russians who know about the billion-dollar bank accounts, the wonderful palaces, marvellous yachts, football clubs and all sorts of other luxuries on which a narrow group of their countrymen waste their underserved wealth.

"The key problem of our economy is the most dreadful differentiation of incomes between the richest and the poorest," Prime Minister Mikhail Fradkov said recently. "This is a difference of 14-15 times." Sociological surveys show that the psychologically admissible gap in living standards for Russians is about 10-12 times. Society views anything above this as utterly unjust and that contains potential social instability. For the sake of comparison, a seven-fold differentiation is characteristic for the developed nations.

It is only logical that Mr. Fradkov would want to attack poverty and narrow this yawning gap between the noveaux riches and the rest of the population.

"We would like to reduce this level to ten times at least," the premier said. The government's cut in the single social tax, in his opinion, could become one of the first steps to the final goal. The state's losses will be compensated by the usual means, i.e., high oil prices.

However, Mr. Fradkov knows that the oil price situation is not completely predictable. The premier believes that the high prices will last no longer than two to three years, so the main weapons in the campaign against poverty should be orientating the economy to the hi-tech sector, creating new jobs, increasing production capacity and, as a result, doubling GDP in ten years - President Putin's already declared goal.

Russia is also pinning some considerable hopes on what it has become accepted to call the social responsibility of big business.

Unfortunately, the term is understood in the business world in an extremely narrow sense, i.e., charity work and nothing else. There is clearly little willingness to start a dialogue with society about the redistribution of the unjustly acquired wealth of the so-called oligarchs. However, the Russian press has started to increasingly pose the question about how talks with the trade unions could ease social tension, while workers could be invited into social partnership and help form a new minimum consumer basket. As the first mundane measure, they suggest raising wages.

At the moment, the minimum wage in Russia is still 600 roubles and 1.4 million people receive it. That is a quarter of the subsistence minimum. Russia is tired of being shamed of its poverty. The Kremlin has understood this and this inspires hopes for certain changes.