Moscow Times
October 13, 2005
Oil Wealth Trickling Down to the Poorest
By Anna Smolchenko
Staff Writer
The number of Russians living in abject poverty fell to under 13 million in 2002 from over 30 million in 1999, as the country's poorest citizens benefited from the country's oil-propelled economic growth, according to a new World Bank report released on Thursday.
Russia has not only lifted itself out of poverty but has "become a regional locomotive for many neighboring countries," says the study, which looked at poverty in Eastern Europe and former Soviet Union.
"Growth has been a tide that lifted all boats," said Mamta Murthi, a lead economist at the World Bank and one of the study's authors.
The report warns, however, that a financial crisis similar to the 1998 financial meltdown "could lead to a doubling of absolute poverty counts in the space of a year."
The country's health and education systems are in a state of serious neglect, the report says.
The study defines the poorest segment of Russian society as those living on $2.15 or less per day.
That segment -- measuring those in abject poverty -- has fallen to 9 percent of the country's 144 million population in 2002 from 21 percent of the population three years earlier, the report says.
The percentage of Russians eking out a living on $4.30 per day fell to 32 percent in 2002 from 38 percent in 1999.
The fact that wages and pensions are paid on a more regular basis has largely contributed to a decrease in inequality, fighting the widespread perception that only the rich benefited from Russia's economic bounce-back, said Murthi.
Poverty reduction throughout the region has also been helped by factors including the end of the war in the Balkans and the inclusion of much of Eastern Europe in the European Union, the study says.
But "it's not time to sit back and feel complacent," Murthi said.
Across Eastern Europe and the former Soviet Union, the World Bank estimates that more than 60 million still live on incomes of less than $2.15 per day. More than 150 million have only between $2.15 and $4.30 per day at their disposal.
The figures show that poverty appears to be declining in most of the countries covered in the study. In Georgia, Lithuania and Poland, however, poverty is on the rise, the report says.
A separate study by the State Council, which comprises regional leaders, estimates that only 32.1 percent of Russian children are healthy, RIA-Novosti reported.
Presented to President Vladimir Putin on Tuesday, the study says that Russians live on average 12 years less than Americans, 8 years less than Poles and 5 years less than Chinese.
Putin has said that fighting poverty is one of the priorities of his second term in office.
According to the World Bank, instances of tuberculosis increased to 113 cases per 100,000 citizens in 2003 from 80 cases in the mid-1990s.
In terms of education, one of Russia's problems is aging schoolteachers, as low salaries deter young people from entering the profession. In 2003, 41 percent of Russian students had teachers over the age of 50, a rise from 21 percent in 1995. The World Bank registered a decline in students' performance in 2003 since the last study.
In the first eight months of this year, gross domestic product in Russia rose by 5.8 percent.
Entitled "Growth, Poverty and Inequality in Eastern Europe and the former Soviet Union," the report follows a study published in 2000 under the title "Making Transition Work for Everyone."