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How can we defeat poverty and inequality in Russia?

Как можно победить бедность и неравенство в России?

“Who “cannibalize” — Khodorkovsky or Sechin?”

How can we defeat poverty and inequality in Russia? Interview Of Andrey Nechaeva

The coming international workers ‘ Day — an occasion to turn to the most burning for the vast majority of Russians the theme of poverty and social injustice. According to “Levada Center,” nearly 80% of households have difficulty acquiring even the basic necessities. How to overcome poverty, we talk with former economy Minister in the government of Yegor Gaidar, now the Chairman of political Council of party “Civil initiative”, a member of the Committee of civil initiatives Andrei Nechayev.

“The real way is very simple — to change the budget priority to increase wages”

— Andrey Alekseevich, Russia in among the world leaders in wealth: 77% of the wealth is in the hands of 10% of the population, 56% — 1%. On the other hand, inequality is a phenomenon common in developed Western countries such as the United States. It turns out that the situation in our country is not “abnormal”?

— If you take the traditional measures of differentiation of society, our situation differs from developed countries. In Russia the gap between rich and poor is significantly higher. We are closer to Africa. Russia is also distinguished by the fact that we have a much smaller middle class, while it is specific. Worldwide the middle class — managers, entrepreneurs, professionals. We have a significant portion of the middle class are officers. If in the world the middle class is stable, while in Russia it in recent years is declining and the number of poor is increasing.
— How do you explain the seemingly irrational passion of property elite have all usedonlarger and usedona larger? And this is the apparent antipathy of the rest and can blow society. As they say, much much more?

Is a disease of growth. The tradition of Western business mentality — consumer modesty, charity, service to society — account for 200-300 years. We have such a mentality has not yet formed. A market economy in Russia less than 30 years, its history is limited to only the first to the second generation entrepreneurs, some of whom became rich and super-rich. In this case we have a horrendous level of corruption that is comparable with the situation in selected African countries. As a result a significant part of the super-rich are officers, including high rank.

But there are positive changes. Many entrepreneurs of the first wave already matured to a civilized level. Among them are philanthropists. This, for example, Vladimir Potanin, who created a charitable Foundation that helps talented young people. Dmitry Zimin, the founder of the Dynasty Foundation to support science. However, his far-fetched reasons declared “foreign agent” and he was almost forced to shut down its operations in Russia. This David was Iakobashvili: he’s on his own money opened a Museum and presented it to Moscow. In the Sverdlovsk region has recently died, Vladislav Tetyukhin, who, with his own money, built a modern clinic for ordinary people. So not all rich people in Russia dedicated solely to personally consume more and more.

In Russia poverty is the poverty of working. That is, the problem is that workers — whether public sector or private business, just simply pay a little. As for the public sector, the bureaucracy just keeps saying, “the budget has no money”. For example, for a performance of “may decrees” of the President about increase of salaries.

Is a question of priorities. If the state priority is public health, education, culture, then it is another story. If the priority is defense and law enforcement and stands high in the quality of the achievement is not called high wages of teachers and doctors, and the new missiles, that’s another story. When the priority of the second money in the public sector will always be missed.

I’m not talking about increase of efficiency of budgetary expenses. Just a few days ago the auditor of the accounts chamber (not an opposition organization, it is loyal to the President and government) has published the data about volumes of orders that do not comply with the law, in 2018 compared to 2017 increased 2.5 times, and for 2016 — 5 times and measured at least hundreds of billions of rubles. This is serious money that could be saved by improving the efficiency of budget spending and direct for other needs.
— What are the real ways of increasing public sector wages under existing conditions?

— The real method is very simple — to increase their salaries by changing, as I said, the budget priorities. In parallel to conduct an audit, whether such number of state employees, especially the officials. Today Russian officials more than it was in the Soviet Union. Disappeared party and Komsomol organizations, organs of people’s control, and so forth, and officials became more. They actively breed not only at the Federal but also at the regional level. Although we do not have socialism, and therefore in the state’s economy should be less. This is also the question about the alternative: to pay more, teachers, doctors or officials.

“Take away and divide is the wrong way for economic development and the reduction of inequalities”

— How do you feel about the idea of “dispossession” of the oligarchs by way of compensation for unfair privatization? The political scientist Valery Solovey recently reported that the oligarchs, even the most odious of them, ready to kind of deal with society.

— First you need the law to establish that the privatization was unfair. The President and the Prime Minister has repeatedly said that privatization was carried out in accordance with the existing legislation and the revision of privatization results to be. Here it is important to note that a substantial redistribution of property took place after privatization. For example, one company, which was bought on a fairly criticize the loans for shares, “YUKOS”, has long captured Rosneft. And there are plenty of examples. So who, exactly, “cannibalize” — Khodorkovsky or Sechin?

It’s a bad idea. We have and so the protection of private ownership is extremely low, which hinders business development and economic growth. And here it is proposed to revise the ownership relations prevailing 25 years ago. If the entrepreneur knows that, in future, his property can be taken away or to impose new levies, it discourages business investment. In General, the “take away and divide” is the worst way to grow the economy and tackle inequality.

— Whether to introduce a tax on luxury?

— First, he actually entered. For example, the motor vehicle tax on high-end machines is much higher than usual. The same goes for estate tax. Secondly, the luxury tax often does not produce the effect, which would like to get the authors ideas. You need to understand that yachts, villas, football clubs and other wealth, causing irritation, are mainly abroad, in the jurisdiction of other countries. All of these assets is unlikely to reach.

Since then, which objects fall under taxation, depends on the answer to the question, what is luxury, where is this boundary. There is a danger that the blow will be inflicted on the middle class in Russia. Despite the fact that he’s not growing, but rather shrinking. And don’t forget that income, all purchased, has already been taxed.
The obvious way to Supplement the budgets of switching from flat rate personal income tax to a progressive. What is your attitude to this decision?

— We already had an experiment with progressive, incidentally, introduced by the government in which I worked. By the time of the transition to flat-rate “effective” rate of personal income tax, i.e. the average rate at which it was paid by the taxpayers, was only 13%. Got it based on a flat scale.

But I am absolutely convinced that to replenish the budgets not by raising taxes but through economic growth. If all the time to raise taxes or invent a new one, this will lead to the fact that people will evade taxes. The tax increases will primarily affect the middle class. The employee who receives a high salary, it is much harder to evade taxes than sverhbogatyh, irritating us with their luxury.

I am a supporter of other measures. Should the poor be exempt from personal income tax. For them the extra 2-3 thousand rubles — real financial help. Or to exempt them from most taxes at all.


In the private sector small salaries are necessary to maintain competitive price of the product or service. In this case, is there any possibility of raising the salaries in the private sector? Or workers are doomed to a small salary?

— It is not. When we have a “zero” was economic growth, wages in the private sector grew. At least from qualified professionals. I remember 90-e years when actively developing the banking sector: then banking experts “were on hand”, for it was this rivalry that the wages were even inflection.

But economic growth is possible when there is competition. And we have now very often grow a state monopoly. That’s why there are no incentives to increase wages.
— Officials and state-owned companies is not going to restrain their appetites. Instead, push with your taxes self-employed. How do you assess the effect of this pressure? And how it actually costs the state to treat self-employed?

— It is necessary to understand the benefits of self-employed not only for the economy but for the state as a whole. After all, they support themselves and thereby removed from the state an additional burden. It is therefore important that the tax was self-employed they can do. Otherwise the taxation will lead to the fact that people will further go into the shadows.

But in General, this tax category is meaningless, because the administration costs of this tax will be higher than its collection. It was introduced rather to improve fiscal discipline citizens than real budget. Say, everyone pays taxes and you pay.

“Unconditional basic income — an experiment with an ambiguous result,”

— Now much has been said about automation, robotics, including as a way to reduce costs in the public and private sectors of the economy. The talk seems to be correct, progressive. But what to do with living workers? How to resolve the conflict between employment and technological progress?

— Robotics reduces the need for people, for example on a conveyor manufacturing. I was on a modern car factories, there are practically no people in the pipeline. On the other hand, robotics creates a new profession: that, for example, designers and installers of robots, experts in the field of information technology.

Further, no robotics will not replace a profession where it is important to direct human interaction or human intuition. In the coming decades no one will replace teachers and doctors. Hardly the patient will prefer a robot to a live nurse or nanny. And is unlikely to be a robot that will be able to change diapers, without harming the patient. So in these sectors serious decline not threatened.

If to speak not about the world in General, and specifically about Russia, we have a huge number of migrant workers. Accordingly, if no mass current abuse and the salary will be decent, the Russians will take these jobs.

— In the European, specifically Scandinavian countries have offered to resolve the conflict between automation and employment by payment of an unconditional basic income. How real is the prospect of the introduction of the unconditional basic income in Russia?
— To avoid speculations about this action, you need to understand that along with the introduction of an unconditional income was reduced other social benefits — all kinds of subsidies for housing, health insurance and so on. That is, absolute income is not just an extra payoff to everything else, is the replacement of the different types of social support as a single payment. A person chooses how to spend this money. If Russian mentality is not the fact that he will spend it on real needs, not spend on drink.

International experience shows that unconditional basic income is an experiment, with mixed result. A number of countries, after they tried to introduce an unconditional basic income, refused it. So I would not consider this measure as a panacea for poverty and inequality.

Another thing is that in some countries there is a single for all citizens payments from oil revenues. This approach is practiced in several Arab countries and Norway. In Russia, this is not, but we are also an oil country. But too much population, so it is unlikely that we can receive such payment. And I don’t think this is an effective way to cope with poverty.

As I said, poverty must be overcome otherwise. To begin with — to cancel the taxes on the poor and to develop targeted social support. Unfortunately, neither in the USSR nor in 30 years of market economy, we have not learned how to effectively deliver targeted social assistance. We still have many of the benefits are universal, and the quality of detection is really poor poor.

And most importantly — you need to demonopolize the economy, encourage competition, to form a comfortable environment for creating and doing business, to revise budget spending priorities. Then there will be new jobs, additional tax revenues, and with them opportunities for higher wages and the public sector, and private sector workers.

In preparation for the interview was attended by Alexander ZADOROZHNY.

© 2019, paradox. All rights reserved.

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