Russian Wealth Inequalities

I make no apologies for leading this weeks posts with yet another story on Russia, because they are simply forcing me to pay attention to them .... but short of yet another horror being inflicted in the Ukraine, or a Ukrainian defeat/Russian withdrawal, then this will be the last Russian post for a while. 

This post is the second about the state of Russia itself,  and the Russian people, where immense wealth and income disparities between the rich, the poor, and the normal population exist ...

Putin's Super Rich Cronies

.... that means for instance that the top 1% of the Russian population, control 71% of the nation's wealth.

Recent western studies have suggested that in 1904, on the eve of military defeat and the 1905 Revolution (and later 1917 revolution), Russian income inequality was not exceptionally high, either in comparison to contemporary European societies, or when  compared against estimates for the post-Soviet period presided over by Putin. 

Income and Wealth inequality has fluctuated in Russia, but towards the end of Tsarist Russia, some figures suggest that the top 10% of earners made about 45 to 50 percent of the national income. However during the Soviet period, this is estimated to have dropped to about 20% to 15%,  but it rose back up to about 45% to 50% in 1990 with the fall of the Soviet Union. More recently, income inequality in Russia has continued to rise so that now the top 1 per cent of earners’ combined income, is as high as 20-25 per cent of the national income.

The wealth disparities have grown significantly ever since, so that by 2015, its thought that just 111 people controlled 19 percent of all household wealth in Russia. Russia’s wealth and income inequalities have now drastically increased in the last seven years, surpassing the U.S. with, for example more billionaires live in Moscow than in either New York City or London.

But this modern Russian poverty gap between the super rich and the rest is also apparent between the rural and poor populations incomes and wealth, and those earnings and wealth of the urban workers and elites, living in Moscow and St. Petersburg etc. In fact, for the average urban middle-class Russian, economic life has never been better over the last few decades - certainly the best in all of Russia's history, with foreign holidays, owning their own apartments, and with country dachas and modern cars.

But for the rest, its a different story. Russia had a poverty level - defined in 2017 as 9,691 roubles (then $171) a month - of more than 40 million in 2000. The figures for those in poverty in Russia fell considerably up until 2006, when 21.6 million were still defined as surviving on less than the states minimum income, but by 2016, it had only fallen to 19.8 million, in other words still more than 13 percent of the population.

By 2019, the state statistics agency Rosstat reported that a third of Russian households polled could not afford two pairs of shoes per person, per year, and that 80% of Russian families found it difficult to make ends meet. In fact, its bi-annual survey suggested that close to half of all households couldn't afford to take even a week's annual holiday (even if just staying with friends or family), and that 52.9 per cent of  households questioned couldn't cope with unexpected expenses - including house repairs or medical costs.

Poverty Levels May Increase In Russia

While about 10 per cent of those questioned (60,000 homes across the Russian Federation), said that they could not afford to eat meat or fish three times a week, and 12.6 per cent of homes either shared a communal toilet, or only had one outside (that last figure is 38 per cent in rural areas).

By the second quarter of 2021 about 17.5 - 18 million people — 12 per cent of Russia’s population - were living below the poverty level, with one in eight Russians surviving on less than £150 a month. There is no indication that the gap between rich and poor has narrowed in the last few years or that those living below the poverty line are being pulled up.

Putin had pledged in 2018 to slash poverty in Russia in half by 2024 ... while in truth its likely to be rising quickly following the latest sanctions. However his real priorities are shown when you consider that while Germany has finally committed to spending just 2 per cent of its GDP on defence, Russia officially spends 5 - 9 per cent (2018 figures) of its budget on defence and the military industrial complex, but this may be a considerable underestimate, with possibly one-third of the nations budget ending up being spent in this area.

Dmitry Peskov, President Putin's spokesman and press secretary was reported as saying that he could not understand how the state statistics agency survey showed that Russians struggle to afford new shoes ... ironically he himself had been photographed in designer boots that cost online, close to double the Russian monthly minimum wages.

Russia's super rich are very sensitive to stories about their obscene wealth getting reported on in the main Russian media (although individually they and their spoilt children often use social media to flaunt it), and Putin has even signed a law criminalising the spread of 'fake news' about the work of officials aka himself, government ministers and anyone he designates as an 'official,' abroad - an offence that could carry a 15-year prison sentence - to discourage mainstream media comments at home.

But even the very rich Russians are feeling the pinch (well a little) .... at the very top a very few may have lost their foreign homes or their super yachts, but for the merely well off like Russian model Victoria Bonya, or blogger influencer Anna Kalashnikova they have only had their access to luxury brands such as Chanel products, restricted whilst on trips to places like Dubai (the rich aren't really  hurt by travel bans it seems) .... they have had patriotic hissy fits and voiced their anger on-line at the "Russophobic campaign to cancel Russia." 

This sort of complaint apparently doesn't breach the new law criminalising the spread of 'fake news', as its not from a designated official abroad, and merely from the well off, not the super rich.