Moscow, data on poverty fails to account for inflation
In Russia, the official figure calculated on the basis of income places 44.2% of the population on the poverty line. But the rise in prices, which has now reached double figures, reveals the failure of the data to reflect capture reality. Experts: without an adequate system, real risk of further growth in inequality.
Moscow (AsiaNews) - The Moscow State Duma has set the priorities for the 2022 budget: the fight against Covid-19, which penetrates the country from the outside, and the fight against poverty, which is instead an entirely internal problem.
The issue of calculating the poverty line is in fact very ambiguous, being linked to two different parameters: budgets and payments. The two forms of poverty are not clearly distinguishable at the moment, but according to experts at the Higher School of Economics in Moscow, under conditions of galloping inflation they could become sharply divided, creating unsustainable levels of inequality.
Duma Speaker Vjačeslav Volodin solemnly declared that 'next year we will have to overcome the problem of poverty', relying on the government's social policies. Already at the beginning of 2021, new criteria for calculating the poverty line were adopted, detaching it from consumption and the uncontrollable rise in prices. Instead, the average income of the population is calculated, and on this basis 44.2% of Russians are on the limit of the minimum subsistence level, guaranteed by the state.
The rise in prices, however, has shown that the official calculations fail to capture reality. President Vladimir Putin himself has had to deal with the issue, raising the minimum subsistence level from 2.5% to 8.6%.
The confusion between the categories of beneficiaries then forced the enactment of rules to distinguish the 'minimum subsistence level' from the 'poverty line', taking up the link with consumer goods and the course of inflation.
As they explain at the Ministry of Labour, these new parameters are revised every quarter, in order to obtain a satisfactory algorithm of preventive social measures, to protect the welfare of the population by distinguishing the needy categories of people in a more balanced way.
Inflation is now running in double figures, as are price increases, but Russian politicians are confident that the system can withstand these shocks. In reality, these calculations are mostly based on living conditions before the pandemic (the 'average income') and there are many unknowns as to how they will work.
Aleksandr Osin, an expert on Freedom Finance at Nezavisimaja Gazeta, explains, "the adequacy of the calculations on the minimum subsistence level is too dependent on the speed of increase in inflation, and the system would break down if inflation exceeded the average income level of the population".
"It will be essential to control the dynamics of the incomes of those below the average level" Vasilij Anikin, an expert at the Institute of Social Policy of the Higher School of Economics, explains. "Now the below-average levels are growing much more slowly than the incomes of the rich and the super-rich", and there is a risk of an almost irremediable fracture.
Much will depend on the government's ability to take appropriate measures and adapt quickly to the largely unpredictable changes, experts confirm. Other factors besides income, such as property and real estate, which are not easy to calculate, must also be considered.
The average income level leads to a guaranteed minimum subsistence level of 11,700 roubles a month, around 150 euros, while it is believed that a sustainable minimum should reach at least 15,800 roubles, thus increasing the number of people below the average from 44.2% to 60%.
A final dramatic factor that will have to be taken into account is the considerable decrease in the number of inhabitants of Russia, which has lost over a million people in the last two years, many more than in previous years.
This could lead to an easing of social measures, to which fewer people could have access; but the disappearance of an active part of the population further complicates the calculations. The new thresholds of poverty and survival have yet to be discovered in this tragic epochal transition.
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10/05/2018 10:23
