Russia » Economics

Statistical lies about living standards in Russia

Surprisingly, Health Care Ministry became responsible for the salary delays in Russia.
As soon as information appeared on the increase of salary delays, President Putin called newly appointed Minister of Health Care and Welfare Mikhail Zurabov and requested him “By no means to allow growth of the salary delays in public sector”.

”Paying salaries must under strict control”, said the Head of State and asked Mr. Zurabov about payments of pensions. The Minister reported that that his Ministry is in process of calculating new size of pensions (they are to be increased since April, 1. “There are only 10 days left”, said the President. Mr. Zurabov replied that there would be no problems about pensions, and he was controlling the situation with paying salaries in the regions of Russia. In some regions, there is one-month salary delay and it has a tendency to grow.

The word “tendency” does not fit here. Even official statistics demonstrates that salary delays are growing with an enormous tempo. There was no such tempo in the last three years. Moreover, there was big deficit of the state budget in February, said Minister of Finance Alexei Kudrin. However, if the official said the words “tendency” and “control”, this is supposed to mean that the President has no reasons to question his work results.

Meanwhile, the “tendency” greatly increased after the presidential elections. In February the salary delays were increased by 3.2 percent (877 million roubles) and reached 28.072 billion roubles by March 1 (the data of Russian Statistical Service). However, the Statistical Service remarked that the sum of the delayed salaries in Russia is by 6.6 billion roubles smaller than it was in March 2003.

According to statistics, the situation with paying salary is far from ideal. Let us remember the statements of officials on the eve of the presidential elections: the earnings of people are increasing, the number of the poor is reducing, and there are no reasons for the government and the President to be concerned. Where did the salary delays come from in this case? Either officials were not aware of the real situation, or the country economy started going down right after the presidential elections? Maybe this happened for some other reason?

The economic situation in the regions of Russia is much worse than the authorities see it from Moscow. National mass media are not covering the demonstrations caused by salary delays in some regions. These demonstrations are not on such a big scale as in 1998 under President Yeltsin, but still: salary delays in Russian regions increased, power and hot water are cut off for debts in many towns, children allowance are not paid in time, bonuses to public sector workers are cancelled. Meanwhile, prices and tariffs are growing, and they are surpassing the growth of salaries and pensions.

According to “MiK” information agency, the salary delay in Sverdlovsk region increased by four times after the beginning of the year. There are salary delays in health care sector in 20 towns of the region.

447 companies in Saratov region owe their employees. There are salary delays in utility sector, construction, public education, public transport, industry, child allowance pay is delayed as well.

36 percent of residents of Ulyanovsk region have earnings smaller than minimum living wage, reported the regional Federation of Trade Unions. Ulyanovsk trade unions see fighting poverty as the primary direction for their work. For May 1, the demonstration is scheduled in Ulyanovsk. Introducing mandatory insurance from unemployment will be among the demands of protesters.

Workers of the farm in Mishkinsky District, Bashkiria Republic were given 100 kilograms of salt per person as their salaries. They did not receive cash since 1991, and before the new year their debt was returned in the form of salt. This became a prominent event for the villagers. Today they are saying that they have salt supplies for many generations ahead. However, the villagers still have no money to buy bread.

This information contradicts the official statements on the growth of economy and people’s earnings and 7  percent increase of GDP in Russia. In some areas of Russia, Moscow in the first place, annual growth of GDP and people’s earnings is much bigger than official statistics reports. The situation in the regions is far from this.

Official statistics adds the income of an oil company executive and a janitor, divides the figure by two, and says that each person earned $150,000 for a year, and people’s earnings are growing.

President Putin is obviously aware of all this. As the head of state, he should bring to account those responsible for the statistics distorting the real situation. But the concern expressed by Vladimir Putin on the salary delays growth, must be just a ritual.  Salary delays will continue growing until federal Ministries adjust themselves to the proclaimed public sector reform by cutting the number of positions in public sector.

Earlier, there was a different situation in Russia. By presidential elections the authorities were using any means to find money for paying delayed salaries. For this reason presidential elections were the only opportunity for many Russians to receive at least a part of their salaries. The voter who did not have cash for six months and then received the delayed salary for three months, is likely to support the acting President at the elections. Although this person guesses that after the voting there will be no salary in the six months to come.

This time there could be either some failure in the state finance system (which is unlikely if consider the big budget surplus), or Kremlin political advisors decided to avoid traditional finance injections because of big rating of Vladimir Putin. Who knows, may be the money were used for some more useful purposes than paying salaries, for example preparing the atomic ballistic missiles of the Northern Fleet for launching.

Administrative reform is in progress, and it stipulates personal responsibility of Ministers for salary delays in his sphere.  However, Vladimir Putin will bringing Minister to the account not soon. Minister of Health Care and Welfare Mikhail Zurabov was required to decrease the number of the poor from 20 percent to 10-12 percent in three years. Therefore the Minister can rest in peace for three years.

In addition, official statistics can reach new skills in three years and calculate huge growth of people earnings. Owners of luxury mansions in Moscow will be glad to hear this.