RUSSIA MOVING TO TACKLE POVERTY PROBLEM.

On October 10 the Russian Duma passed a law on the minimum subsistence level, stipulating indexation of the poverty line every three months and differential payments to the poor based on the price level in each region of Russia. Welfare payments would be aimed at families living below the regional poverty line. The move is a step in the direction of targeting social welfare on the truly needy. In the summer the Duma rejected the government’s proposal to abolish many dozens of special welfare privileges for veterans, state employees, and others.

The average subsistence minimum over the period January- August 1997 stood at 413,000 rubles ($71). It was 464,000 rubles for adults of working age, 291,000 rubles for pensioners and 417,000 for children. As of August, 30.8 million people, or 20.9 per cent of the population, had incomes below the subsistence minimum. That was down from 22.6 percent a year earlier. (RIA Novosti, October 10)

The slight fall in those living below the poverty line has caused government spokesmen to argue that poverty is diminishing. However, Sergei Kalashnikov, a former sociologist who now heads the Duma’s Labor Committee, argues that the money income of those living below the poverty line continues to shrink. He suggested that, unlike two years ago, hunger is now a real threat for the underclass — not starvation as occurred in Ukraine in the 1930s, but persistently poor diet. Most observers, and World Bank funded studies, concur that malnutrition has not previously been a widespread problem among Russia’s poor. There is insufficient evidence to judge whether the situation has changed this year.

Kalashnikov also noted that, while 31 million live below the poverty line, there are a mere 6 million rich people — defined as those with annual incomes in excess of 55 million rubles ($10,000). The 110 million in the middle lead a precarious existence: Kalashnikov suggests that if the government’s planned increases in rent and utility charges are implemented, 20 million Russians could fall below the poverty line. (Trud, October 8)

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