Russia looks after its rich


What about our benefits? Watching Vladimir Putin’s live broadcast Q&A in the village of Yelnat Vladimir Smirnov

Pension reforms delaying retirement brought outcry from Russians. But Putin keeps squeezing lower incomes, exempting a wealthy elite close to the Kremlin.

Prime Minister Dmitry Medvedev announced a drastic reform of Russia’s pension system this June, just as the World Cup began: the retirement age would be increased from 55 to 63 for women and from 60 to 65 for men. Although President Vladimir Putin tried to stay out of the debate, the announcement caused his approval rating to plummet from 80% to 63%. After hundreds of protests around the country, Putin went on television to tell the nation he would change the planned reform, revising the pensionable age for women to 60 and promising a significant increase in the value of pensions.

This PR campaign was only partly successful. The street protests petered out, but Putin’s United Russia party was punished at the polls. In September’s regional elections, four candidates from Putin’s party, all incumbent regional governors, were forced to take part in a second round of voting, unusual in Russia. In the Vladimir and Khabarovsk regions, the far-right nationalist opposition (the Liberal Democratic Party of Russia, LDPR) won. The authorities annulled or postponed elections in Primorsky and Khakassia to stop the communists making headway.

The pace and scope of Russia’s pensions overhaul are striking compared to policies introduced elsewhere. By 2029, Russian workers will have to work five years more for their pension, as the retirement age will increase by six months a year. In 1998 the South Korean government also increased retirement age by five years, but phased in over 20 years. The government in Germany has raised the retirement age by a year, to 62, and France has raised it by two years, to 67, at a rate of one or two months a year.

Invoking ‘spiritual bonds’ to bind society around its leader is of no use when it comes to such an unpopular measure Ilya Budraitskis

Defenders of the Russian pension reform cite arguments heard elsewhere. The population is ageing. In 2017, according to official Rosstat statistics, there were 36.5 million pensioners in Russia and an active workforce of approximately 83 million, a ratio of 2.3 workers to every pensioner. In 2002 the ratio was three to one. But this is a temporary phase: the generation from the chaotic 1990s will soon be joined on the labour market by the larger cohort born in the 2000s, a period of strong economic and demographic growth.

How long will pensioners live?

The second demographic argument is that Russian retirement age has not changed since 1932, while life expectancy has improved markedly. According to Rosstat figures quoted by Medvedev, average life expectancy was just 35 years in the early 1930s, compared to 72.7 today; but the very high infant mortality rate in the 1930s significantly reduces the average for that period and taking it as a comparison makes it possible to present one of the lowest life expectancies in Europe as an achievement. In 1932 only a minority of old people got a pension, a right that was extended to all city-dwellers in 1956 and workers on collective farms and peasants in 1967. A baby born in the USSR in 1967 could expect to live to 69.3. In 2018 the new age at which men become eligible for a pension is a year and a half more than their current life expectancy of 66.5 years (for women life expectancy is 77).

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