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Putin has an alternative to raising the retirement age

У Путина есть альтернатива повышению пенсионного возраста

Putin’s decision to raise the retirement age, became a vivid demonstration of the evils they constructed a system of power. He did not hesitate to push the harmful to the well-being of millions of citizens decisions, forcing them feeling that they owe him a lot and now have to endure hardships, repaying thus a prosperity of recent years.
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The government, Parliament, the media, the expert community — all of these institutions have demonstrated the complete futility in the exercise of their public functions, habitually taking their allotted place in the “vertical” of power.

Putin said that raising the retirement age as public funding in seven to eight-year term will be a disaster due to the demographic “pit”. But this is hypocrisy, deception. The demographic “pit” did not fall on your head unexpectedly. Demography — the science is rigorous and gives accurate predictions of 20-30 years. Of the future problem, demographers, economists, financiers and the government knew 20 years ago. Was aware of that and President Putin receiving reports from my government.

It was clear that by the beginning of 2020-ies will come the next wave of “echo” of the last war and the population entering the working age will decrease dramatically. Thus, in the period 2014-2025 years in working age is very small cohort of both men and women. And, starting in 2018, the working population will annually decrease by 300 thousand people. At the same time, the retirement age in opposite includes a very large cohort of men (60 years) and women (55 years). Due to inevitable demographic problems in those 7-8 years there is a temporary financial gap in the public finances.

To Finance this gap in 2003, we established the mechanisms of accumulation in provident funds. In them for ten years due to the export of oil and gas at high and very high prices were accumulated huge resources. They had to cover emerging the temporary financial gap, without affecting the interests and welfare of the citizens. That is why President Putin has repeatedly said that raising the retirement age in the foreseeable future is not justified.

But, as we all know, due to some circumstances President Putin has changed his attitude towards the growing pension problem. Other interests were his priority – the Olympic games in Sochi, the football world Cup, the Crimean bridge, increasing military spending, which in some years amounted to 5 percent of GDP.

President Putin knows and publicly States that before the crisis of the pension system, the country has 7-8 years. But to solve this complex socio-economic problem he intends the simplest way to shift it on shoulders of citizens whose incomes fell continuously in the last four years. Putin offers to avoid the disaster of public finances at the expense of well-being, health and lives of Russians.

In its decision about raising the retirement age, Putin signs failing to implement policies that ensure economic growth, increase of welfare of citizens and, as consequence, — increase in life expectancy.

For me, as for many professional experts it is obvious that the current quality and duration of life of the people, their income levels, health care and social support, the question of raising the retirement age in the coming years is impossible.

Unfortunately the huge financial resources owned by all citizens of Russia, the current government let the wind. But even in this situation the pension problem arising can and should be solved differently.

Should:

1. To cut budget costs by 2 – 3 percentage points of GDP, primarily the cost of the state apparatus — its painless can be reduced two times, the cost of security and law enforcement, defense;

2. Eliminate the cost of propaganda abroad (Russia Today, Sputnik) and the contents of the regimes that ruled South Ossetia, Abkhazia, part of the Donbass, Syria;

3. Reduce benefits for early retirement of certain categories of employees, working conditions which are not associated with particular risks;

4. To increase budget revenues through dividends from public enterprises and joint stock companies controlled by the state. This can be quickly achieved by tight control of their investment costs, salaries of managers who have attained “cosmic” levels, and complete elimination of non-core expenses such as the acquisition of hotels, planes, ships, content, sports clubs, TV channels and other media houses, cottages, etc.;

5. To increase contributions to the state provident funds of revenues derived from oil exports, setting the cut-off price of $ 40 per barrel. All proceeds from the sale of oil above this price are directed to reserve funds.

6. To increase the Federal budget deficit to 3 percent of GDP and keep it at that level for 7-8 years. This can be done painlessly with low public debt and huge opportunities for privatization;

This set of solutions is the alternative to raising the retirement age. It should take the President, the government and Parliament to prevent the growing crisis, instead of to humiliate and torment the population of Russia.

Well, if you replaced the authoritarian regime will come to power democratic forces, in addition to the above measures, the working citizens will get confiscated from pension funds, and pensioners are not paid indexed on inflation rate 2015-2016.

A new political course will be based on freedom and respect for citizens, political and economic competition, the protection of private property and low taxes. It will allow not only to overcome the regime created the current problems, but also put the country on the path of sustainable long-term economic growth, which will inevitably lead to greater wealth and life expectancy of citizens of Russia.

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