Fighting poverty in a situation with stagnation of real disposable income is not an easy task for Russia, says a leading expert at the Center for Political Technologies Nikita Maslennikov.
The fight against poverty depends on more than just real income
Deputy Chairman of the Accounts Chamber of the Russian Federation Galina Izotova said, that the growth of real incomes in Russia following the 2019 years should be 0,1 percent per annum, that within the static error, therefore, the chances of achieving the goal of lifting one percent of Russians out of poverty look slim, despite the broad social programs of the Russian government.
Interesting, that in a situation with a fall in real incomes, the state is pursuing a policy of raising pensions and social benefits in Russia above inflation. In this way, can't speak, that our effectiveness in combating poverty depends entirely on real incomes.
“In this situation, one must proceed from the very concept of real disposable income. These are the wages of citizens, from which the costs of inflation in Russia are removed, which by the end of the year will amount to, close to 3 interest per annum ", – concludes Maslennikov.
Besides, all mandatory payments are removed from this amount, including taxes and costs of servicing previously taken loans. After that, the figure of real disposable income is obtained, from which all basic macroeconomic indicators are counted.
In this way, real income, like the poverty indicator, depend not only on wages, but also on the level of tariffs, basic costs and other benefits, with the help of which the Russian state is trying to stimulate the quality of life of the most vulnerable.
“With regard to the level of poverty, then it can be considered in different ways, but the most adequate approach is to assess that, what the citizens have left after, how they paid all the mandatory payments. This is in the center of the data of reasoning ", – says Maslennikov.
Not surprising, that the Accounts Chamber of the Russian Federation made their conclusion on the prospects for combating poverty based on the indicator of real income, because he is that criterion, on the basis of which it is customary in Russia to determine the effectiveness of social policy.
"Therefore, if real incomes of the population in Russia do not grow, then there is no sufficient reason to fight poverty in absolute terms, why there is a direct correlation, which must be taken into account in economic planning ", – summarizes Maslennikov.
On the other hand, poverty must be fought with the help of other economic methods - in particular, through social transfers, as well as other steps within the framework of that economic policy, which is currently being implemented by the Russian government.
"Need to say, that these stimulation methods continue to grow in Russia, and the share of social transfers fluctuates between 20 percent of the real disposable income of Russians, but, again, here you need to look specifically for that, who gets this social support. So that, it all comes down to targeting and efficiency, with which there are known problems in Russia ", – concludes Maslennikov.
Naturally, we will not solve the problem of poverty without increasing real disposable income, and such growth will not happen without an increase in economic growth rates, but in nuances we can correct the situation by improving the quality of social policy.
Russia is going through a difficult period today, and we need to learn how to use our resources better, especially, a lot of money is allocated for social policy, and they are a powerful tool for improving the poverty situation.
Russia needs to achieve an increase in economic growth rates
“There are many measures here, but for understanding, where is the pendulum of the constant fight against poverty in Russia moving?, the dynamics of real disposable income is still the most revealing indicator ", – says Maslennikov.
In terms of real disposable income, then they fell in our country for five years and only now began to grow, although this growth in 0,1 percent is insignificant and is associated with falling inflation, despite the increase in VAT.
"According to Rosstat, Russia's lag in real incomes compared to 2013 year is 8 percent. And if there really are no cuts this year, then it will be possible to say, that we have reached the "bottom" here, – summarizes Maslennikov.
As noted by the expert, the final conclusion on real disposable income will be given by the first half of the year 2020 of the year, until then, the situation here must be considered controversial, since we do not have high economic growth rates, and we continue to depend on external conditions.
"While the hypothesis that, that we hit the bottom in real income, looks likely, but not fully confirmed. As for, what can radically change the situation here, the common reason is the acceleration of economic growth ", – concludes Maslennikov.
Any other tools will give only local results, therefore, only an increase in well-being in Russia will become the basis for a structural change in the situation with poverty, and all other methods will give only local results.
Dmitry Sikorski
