Russia Pledges to Invest $200 Billion to Reduce Poverty

The Russian government is planning to spend a total of 15.3 trillion rubles (nearly $207 billion) over the next five years to reduce poverty and improve citizens’ incomes, the country’s Accounts Chamber reported this Thursday.

The document indicates that the measures will be implemented through national and federal projects as well as state programs, and intend to help reduce the number of Russians with incomes below the subsistence level.

According to figures provided by economic analysts, poverty levels could be reduced by 2.32 percentage points, while real disposable incomes would increase by 1.04 percent from poverty levels. Additional assistance to poor families could help the situation, leading to a reduction of poverty by nearly 2 percent and growth of real disposable incomes by 0.82 percent, the document predicts.

Russia’s President Vladimir Putin pointed out during a news conference earlier this month that there are at least 20 million Russians living in poverty. He said that the country must cut these levels by half by the end of the next decade, from 13.5 percent to 6.5 percent. Putin initially intended to reach these levels by 2024, but politicians agreed it would be a task too difficult to achieve.

Regarding the anti-poverty policies, Russia’s Accounts Chamber has indicated that not all the measures have proved to be effective. While questioning the effectiveness of about a third of them, it noted that they lacked clear impact on improving the lives of citizens. In addition, they indicated that one-fifth of Russian households classified as poor did not get any financial aid from 2014 to 2018.

The head of the Accounts Chamber and former finance minister  Alexei Kudrin said that Russia cannot reach its poverty eradication goals based on its economic growth alone. He advised the government to not only expand the existing social support programs, but also to make them more targeted.