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Proposed a new way of fighting poverty

Предложен новый путь борьбы с бедностью

How to count the level of poverty and what does it do? Will it help to halve the poverty level, as required by the may supercase President?

The Ministry of labor decided to rethink the approach to measuring poverty in Russia. By 2020, a working group should propose a new approach to poverty assessment, said Deputy Prime Minister Tatiana Golikova at the Gaidar forum.

Now, she said, used the absolute approach to measuring poverty – as against the standard of living, i.e. the standard of a living wage, which was introduced in 1992. Whereas in international practice, there are more modern standards of assessment of poverty, multi-level.

In the years of economic recovery, poverty levels declined steadily. From 2000 to 2013, it decreased from 29% to 10.8%. However, the crises of the 2009-2010 2014-2016 returned to the problem of poverty in the centre of the political agenda. The increase in the minimum wage, unemployment benefits and pensions – all this helped to mitigate the effects of the first crisis and to reduce poverty by 2012.

However, a new crisis has led to a poverty level of 13.2% in 2017, higher than it was in 2009-2013. The deficit of money income of the population increased from 0.54% of GDP in 2012 to 0.78% of GDP in 2017. He made 716,6 billion, considered by experts Ranepa presented at the Gaidar forum, the report “Social policy in the long term: multidimensional poverty and effective targeting”.

“This deficit in income of approximately 800 billion roubles. That is, if you entirely poverty to overcome, just to hand out to every ruble just came to families where there is a shortage of income to overcome poverty completely, you need about 800 billion,” – said the Minister of labour and social protection Maxim Topilin.

The speaker, however, noted the emerging positive trend is the observed poverty reduction in the last two years. “If in 2015-2016, the rate in the Russian Federation amounted to 13.3% in 2017 for the first time since 2012 renewed poverty reduction – value of 13.2%,” – said Deputy Prime Minister.

Thus for the first nine months of 2018, the poverty rate declined by 0.5 percentage points to 13.3 percent, lower than the same period in 2017, when the rate was 13.8 per cent. This means that the incomes below the subsistence minimum have 19.6 million Russians (13.3 percent).

To solve the President of Russia in may supercash the objective to reduce poverty in half, it is necessary to refer to targeted support. In Russia mostly used categorical principle of social support. Disadvantage of it is that under the benefits erroneously are not poor, in fact, need be without this support.

A combination of categorical support to address should significantly reduce these errors and increase the efficiency of assistance to the poorest segments of the population. In order to correctly identify the really poor and to give them targeted help, and it is necessary to revise the calculation of the poverty line.

Earlier the Ministry chose eight regions to run pilot projects in the framework of the fight against poverty. In these regions will be tested the mechanism for identifying poor families for their support.

Special attention should be given to a multidimensional approach to poverty assessment, experts say the Ranepa, which together with Rosstat are already working on the creation of a single officially recognized multi-criteria poverty index that takes into account the peculiarities of Russia and could be used for international comparisons.

For a basis decided to take the multi-criteria poverty index AROPE. According to international methodology of calculation, this index consists of three components: risk of relative income poverty, the availability of material deprivation (lack of money) and exclusion from the labour market. While the poor are persons with at least one of the three signs of poverty.

The first indicator of multidimensional poverty – is the risk of relative income poverty experienced by 22.1% of the population of Russia, considered in Ranepa.

In other words, every fifth citizen of the Russian Federation has an income not exceeding 60% of the median income in the country.

In the EU, by the way, a comparable index. The closest to Russia, the situation in Ireland, the UK, Poland and Belgium.

The maximum risk of income poverty observed in the North Caucasus Federal district: there are nearly 40% have incomes below 60% of median income. The situation is similar in Greece, Romania and Bulgaria. The level of income poverty is high in rural areas, and among children and people aged over 65 years.

The second indicator is the presence of material deprivation (deprivation) of the individual. Enough man of means eight fixed goods and services? If you have enough money for at least four goods and services, is poor. In early 2017 material difficulties were experienced by 4.6% of the population. This is even lower than in the EU (7.5 percent), however, to compare these figures is not entirely correct (different criteria).

In regional terms, the worst situation in the North Caucasus Federal district, where every tenth resident is experiencing a shortage of vehicles simultaneously on four blessings of the eight. Far left, and the Siberian Federal district. And, conversely, the most favourable situation for this indicator in the Central Federal district and northwestern Federal district. Rural residents experience significant material deprivation (lack of money) two times more often than urban.

What not enough money to Russians? According to a study at the beginning of 2017, 40% of Russians could not afford a week holiday away from home. In the EU the situation is very similar – there are 32.8% of the citizens annually spend a week holiday away from home.

Every seventh Russian citizen has a debt on payment for housing and utilities, rental or loan. One in eight finds it very difficult to pay necessary daily expenses. Every tenth cannot afford nutritious food, containing meat, chicken, fish (or vegetarian equivalent) at least every other day.

In other words, just as in EU countries, in Russia, the economic difficulties of daily expenses, payment of utility services, heating and home away from home, are a more significant problem for the population than the purchase of such durable goods as washing machine, color TV and telephone, the authors of the study.

Only 1.5% of Russians because of the lack of funds can’t afford to buy a washing machine, a 0.5% don’t have and can’t purchase a color TV, and 0.5% cannot afford to buy the phone.

However, the Russians compared to citizens of the EU more often can’t buy a personal car due to lack of funds. In Russia the incidence of this deprivation is 19.6%, whereas in the EU only 7.5%.

The authors of the study conclude that more likely to suffer from a lack of money in Russia, children up to 17 years (particularly in rural areas) and older people after 65 years.

Children compared with other categories of the population are much more likely to experience a number of deprivations. Basically it’s hardships related to economic difficulties. For example, 20.9 percent of children live in families where there is not enough money to pay for utility services, leases or loans (the figure for the total population of the Russian Federation is only 14%).

Also, 18.4% of children live in families who struggle to make ends meet, that is, have great difficulty with paying the daily necessary expenses. On average in Russia this figure is considerably lower at 12.1 percent.

Children more often than the rest of the population, have problems with food: 11.7% of children can not have a balanced diet, containing meat, chicken, fish (or vegetarian equivalent) at least every other day.

Thus, the material deprivation of the child population in Russia represents a significant challenge for social policy, concluded the experts.

Can help the introduction of targeted monthly benefits to poor families with children. According to experts, these targeted allowances in the amount of 1-10 thousand rubles will help to reduce poverty among poor families with children by 1.7 times. For the payment of this allowance will require an additional approximately 580 billion rubles a year from the Federal budget.

However, one such targeted support is not enough in order to solve the given task by the President to reduce poverty in half. Also needed the growth of real monetary incomes and real wages, experts say Ranepa.

So, from 2000 to 2007, real wages grew by over 10% each year. Against this background, the poverty rate has decreased more than twice – from 29% to 13.3%. To halve the level of poverty in the next six years, it is necessary to restore the growth of real monetary incomes of the population at least 5% per year due to the increase in real wages against the background of economic growth, experts say.

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